What to make of Alibaba’s tangled web of businesses
It’s all about data
Alibaba is an e-commerce company as we all know, and the tech giant also more than dabbles in the worlds of payment and financial services, cloud infrastructure, marketing services and digital media.
According to Daniel Zhang, Alibaba’s CEO, the company is really a data manufacturer.
“Alibaba is an economy and if you look at the components of this economy you see a clear synergy between each business,” Zhang said. “The common thing is that we use data to drive the business. Alibaba is a data company.”
Larry Dignan at ZDNet offers advice about what we can learn about data transformation from this data company:
“Think of your business and customer base as an economy. Alibaba’s economy analogy works because it’s a commerce player. However, the guiding vision is to make it easier to do vision. The vision, coupled with the monetization model, can connect what appears to be a series of portfolio businesses. “We are crossing the entire customer lifecycle,” said Zhang.
Move up the stack. Alibaba has a strong cloud infrastructure business following the commerce to cloud services path pioneered by Amazon. What makes Alibaba a bit different is how quickly it is moving into software as a service. Alibaba will be providing everything from supply chain to marketing tools to customers. It’s almost as if AWS merged with Salesforce, which then merged with Adobe, Microsoft and SAP. For what it’s worth, Alibaba will continue to invest heavily in its cloud business, which is close to break even.
One customer and multiple channels. Listening to Zhang outline Alibaba’s move into media was interesting since the overall aim is to leverage China’s growing middle class and help its customers conduct business offline and online. Zhang added that following customers across the lifecycle is all about data.
Continually invest, but don’t do anything crazy. What’s notable about Alibaba’s investment plans is that there’s nothing that’s outright wacky. Alibaba isn’t dabbling in autonomous vehicles or building drones or blimps to deliver Internet access and entering health care. Your investments in new businesses should look similar.”