Alibaba Cloud saw strong fiscal first quarter demand in industries ranging from financial services, retail and power and utilities as it branches out from cloud compute and storage to industry and AI services.
The cloud unit of China's largest e-commerce company delivered first quarter revenue of $1.75 billion, good for an annual revenue run rate of $7 billion. Alibaba Cloud saw sales jump 59% in the quarter due to strong demand from public cloud and hybrid cloud offerings such as AnalyticDB.
On a conference call with analysts, Alibaba CEO Yong Zhang said Alibaba Cloud is early in China's digital transformation and move to the cloud. He said:
We don't want to just provide a cloud in terms of infra services. If we just do it as an infra service, as our services, then price competition is inevitable, and then all the cloud service is more like a commodity business.
Today, Alibaba's cloud is cloud plus intelligence services. And it's about cloud plus the power of the data usage. We are working hard to develop industry-specific solutions with pass and pass services together with our SaaS partners, and we will continue to do that to enhance our market leadership.
Zhang added that the China cloud market is 1/8 the size of the US market today but is seeing faster growth due to the economy's digitization.
Overall, Alibaba reported first quarter revenue of $21.76 billion, up 34%, with 742 million active consumers. Net income for the quarter ending June 30 was $6.74 billion.
CFO Maggie Wu noted that Alibaba's core commerce business has returned to pre-COVID-19 levels across the board.