Alibaba Cloud is extending its reach into the cryptocurrency world. A few days ago, Alibaba Cloud, Avalanche Blockchain and MUA DAO jointly launched Cloudverse, providing a one-stop solution for enterprises that want to deploy the Metaverse on the chain.
Avalanche is a typical cryptocurrency project, and all value transfers on the chain are settled in cryptocurrency. This cooperation releases Alibaba Cloud's layout in the Web3 field. In December last year, Alibaba Cloud expanded its cloud capabilities to Avalanche, and recently announced that it will provide support for the incubator program of another public chain, BNB Chain.
As domestic regulatory authorities have strict supervision over cryptocurrency-related projects, Alibaba Cloud's above-mentioned actions are quite cautious. Not only are the release channels placed overseas, but even the product introductions on the official website are only displayed in English.
In fact, among the "four major clouds" in China, only Baidu Cloud has not publicly disclosed any intersection with cryptocurrency projects. Alibaba Cloud, Huawei Cloud, and Tencent Cloud have all entered the cryptocurrency circle, eyeing the emerging Web3 pie. Against the backdrop of slowing growth and intensified competition in the cloud market, a new round of confrontation between the giants in the incremental market has begun.
Alibaba Cloud joins hands with Youbi Blockchain to provide cloud services
Entering the Web3-packaged cryptocurrency circle, Alibaba Cloud has maintained a low profile in China.
On May 4, Raymond Xiao, head of Alibaba Cloud Intelligent International Web3 Solutions, appeared at a summit held by the public chain Avalanche. At the summit, Alibaba Cloud announced that it would join hands with Avalanche and the decentralized autonomous organization MUA DAO to launch the Cloudverse solution.
Cloudverse is a "launch platform" whose main function is to help enterprises customize, launch and maintain the metaverse space on the Avalanche public chain. It will provide support for settled enterprises in visual design, meta-economic models, interactive functions, theme activities, metaverse operations, etc. With the help of Cloudverse's services, enterprises can build a relatively mature virtual world on Avalanche in as little as one month.
In this cooperation, Alibaba Cloud plays the role of providing Cloudverse with an efficient and secure cloud infrastructure that is easy to expand, including cloud computing, storage, database, network and intelligent operation platform. Based on the underlying cloud services, Avalanche and MUA DAO provide solutions to help build the Metaverse space. Among them, MUA DAO will assist enterprises in virtual space governance, virtual social activities and brand promotion activities, so that enterprises can get started with the Metaverse faster.
The launch of Cloudverse is an obvious move by Alibaba Cloud in its Web3 layout, and the Web3 industry is a gathering place for people in the cryptocurrency circle.
You should know that Avalanche is a real native blockchain, and all on-chain assets are essentially cryptocurrencies, including but not limited to the on-chain native token AVAX, tokens issued by various projects, and NFT digital assets such as virtual land, clothing props, etc. The Metaverse on Avalanche is also different from closed and centralized applications such as Xirang, and is an authentic open source product.
This is not the first time that Alibaba Cloud has provided cloud services for the “Coin Blockchain”. In December last year, Alibaba Cloud announced that it would expand its cloud infrastructure technology and development tool series to the Avalanche blockchain and open up infrastructure as a service (IaaS) capabilities. This allows Alibaba Cloud’s Asian users to launch validator nodes, build products, etc. on Avalanche.
On May 5, Alibaba Cloud also announced its support for the BNB Chain Zero2Hero incubator, providing underlying cloud services for startup crypto projects to be deployed on the BNB Chain blockchain. BNB Chain is a public chain incubated by the crypto asset exchange Binance, and is also a typical cryptocurrency project.
It is worth noting that the above business news involving "Youbi Blockchain" all came from Alibaba Cloud's official Twitter account. Even the introduction of Cloudverse on its official website is displayed in English. When the language is switched to "Simplified Chinese", a prompt will pop up, "Currently this page is only displayed in English, and Simplified Chinese content is being prepared."
It is not difficult to understand why Alibaba Cloud is so cautious.
Cryptocurrency and virtual currency have always been a sensitive topic in China, and domestic regulatory authorities have issued regulatory regulations many times. In September 2021, the central bank and ten other departments jointly issued the "Notice on Further Preventing and Dealing with the Risks of Virtual Currency Trading Speculation", clarifying that virtual currency does not have the same legal status as legal currency.
Virtual currencies are reaching the limit in China, and if you want to provide infrastructure services for the public chains that generate them, it is obviously safer to use overseas entities.
Cloud vendors are eyeing the Web3 pie
Why does Alibaba Cloud want to squeeze into Web3 where people in the cryptocurrency circle gather?
Raymond Xiao delivered the answer in a blog post. He revealed that Alibaba Cloud hopes to open the entrance to the Web3 world through Cloudverse. "There is no doubt that blockchain technology and the virtual world are becoming more and more popular. In particular, the rising demand in the Asia-Pacific region has prompted the implementation of Cloudverse."
Obviously, Alibaba Cloud is more concerned about Web3, which is called the "Internet of Value", and "coin-backed blockchains" such as Ethereum and Avalanche are generally regarded as the infrastructure of Web3. This means that if Alibaba Cloud wants to compete for the Web3 market, it will inevitably be associated with coin-backed blockchains.
In fact, it is not just Alibaba Cloud. The other two giants in the domestic market, Huawei Cloud and Tencent Cloud, have already extended their tentacles to Web3.
In February this year, Huawei Cloud took the lead in launching the Metaverse & Web3.0 Alliance during its 2023 Asia Pacific Partner Leadership Summit, and announced a number of partners in the Web3 field, including BlockChain Solutions, Deepbrain Chain, Polygon, Morpheus Labs, etc. Similar to Avalanche, most of Huawei Cloud's above-mentioned partners are also "currency-related" projects.
Tencent Cloud has also kept up with its Web3 efforts. Also in February, it held a special summit in Singapore called "Tencent Cloud Web3 Build Day," where it announced a roadmap for the development of a full set of blockchain API services and a product called "Metaverse-in-a-Box," which is similar to Alibaba Cloud's Cloudverse and provides on-chain metaverse development solutions suitable for game, media, and entertainment application development and deployment. At the summit, Tencent Cloud also announced cooperation with four cryptocurrency projects: Ankr, Avalanche, Scroll, and Sui.
Poshu Yeung, senior vice president of Tencent Cloud International, said that Tencent Cloud sees the future of Web3, a new version of the Internet that introduces the concept of "immersive convergence" where the physical and digital economies meet and merge.
As of now, among the “four major clouds” in China, only Baidu Cloud has not yet revealed any news of cooperation with cryptocurrency projects, while the other three cloud giants have all moved towards Web3.
However, cloud vendors’ concerns about regulatory policies are obvious. The three major cloud giants have been quite low-key in handling the news of Web3’s business expansion in the domestic market, and the relevant product and partner launch conferences have all been held overseas. Their competitors are Google Cloud and Amazon Cloud, which do not need to worry about regulation.
In May last year, Google formed a Web3 team to provide back-end services for developers running blockchain applications. In October last year, Google Cloud also announced that it would allow some customers to use cryptocurrencies to pay for cloud services. Amazon Cloud has been providing services to cryptocurrency companies. In 2022, according to Pinwan, citing news disclosed by Amazon Cloud employees, its overseas market share accounted for 70% of its revenue, and of this 70%, the revenue brought by blockchain business is expected to account for more than half.
Cloud vendors are eyeing the Web3 pie because of the rapid growth trend of this emerging market. According to the "2023-2032 Web3 Market Forecast" report released by market research and consulting firm Acumen Research & Consulting, the Web3 market size will reach US$81.9 billion in 2032, with a compound annual growth rate of 44.5%. The Asia-Pacific market will grow faster, with an estimated compound annual growth rate of 47%.
For cloud vendors that are gradually falling into a growth bottleneck, expanding the market and seeking new growth points is particularly critical. As for Alibaba Cloud, the domestic market leader, its revenue growth in the third quarter of 2022 was only 4%, and its market share in China also shrank significantly. The "China Public Cloud Market Report in the Second Half of 2022" released by IDC shows that its market share has dropped from 36.7% in the second half of 2021 to 31.9%.
Fierce competition and sluggish growth are the common situations faced by domestic cloud vendors. Against this backdrop, Alibaba Cloud announced last month its largest price cut in history, with prices of core products falling by 15% to 50% across the board, with storage products seeing the highest price cut of 50%.
The competition among cloud vendors is becoming increasingly fierce. Instead of desperately competing for the existing market, it is undoubtedly a better way to explore the incremental market. Web3 provides a new cake, and a new round of competition has spread overseas.
C3 Tip: The views, thoughts and opinions expressed here are the author's own. This article does not contain investment advice or recommendations. Every investment and transaction involves risk. There are three levels of investment: see, understand, and hold. There are also three levels of entrepreneurship: think, do, and make it. Each level seems to be not much different in words, but in fact, there is a huge difference. Each level can eliminate more than 90% of people.