Cloud service provider Alibaba Cloud, the arm of Alibaba, and Salesforce announced a strategic partnership today.
Alibaba Cloud will be the exclusive provider of Salesforce to customers in Mainland China, Hong Kong, Macau, and Taiwan, a move that eclipses Baidu’s efforts to set up its own CRM platform Aifanfan and also might trample dozens of small local CRM players that cooperate with Alibaba.
With Alibaba’s advantage in cloud infrastructure and insights in the Chinese makert, Salesforce can serve its clients with Sales Cloud, Service Cloud, Commerce Cloud, and Salesforce Platform in the country. Previously, the company made limited presence in China. Beijing-based Celnet Technology Co.,Ltd (NEEQ: 837605) focuses on implementation service of Salesforce. Big Four accounting firms also help Salesforce deliveries in the country for a long time.
Alibaba Cloud aims at empowering SaaS (Software-as-a-service) providers, not providing SaaS itself, as the firm claimed before. Alibaba’s DingTalk, a popular workplace software in China, builds its ecosystem with a batch of CRM providers like procurement software Xiaobangbang. After Alibaba’s announcement of cooperation with Salesforce, many view it as a challenge that can be a crippling blow for small and medium SaaS players while others also stay confident about Alibaba Cloud will keep selling local SaaS services on its platform.
Alibaba’s splashy move eclipses Baidu’s efforts to compete in the industry that is expected to be valued at more than CNY 1.85 billion (USD 269 million) in 2019. While Amazon maintains its number one position in the APAC region in the first quarter of 2019, Alibaba ranked second and Baidu lied outside the top six, Synergy Research Group reckons.
“Alibaba mainly contributes its infrastructure utility and helps to expand sales channels in the partnership, but, may not involve in the implementation of Salesforce CRM product suite. ” Industry insiders said.
“Salesforce needs to rely on Alibaba to carve into the market and implement its products. That’s not easy things as Chinese enterprises are prone to reserve crucial clients data in a local provider’s server.”