Global-bound Alibaba partners with SAP on pushing HANA further into the cloud

Martin Banks Profile picture for user mbanks September 20, 2018

An extension of its partnership with SAP is just part of a wide range of developments and announcements made by Chinese retail tech giant, Alibaba, as uses its Computing Conference to open itself up a bit to inquisitive western eyes


Against the background of the increasingly tense trade war between the USA and China, Jack Ma, the co-founder and soon-to-be former chairman of Chinese online retail giant, fast-spreading cloud services provider, and developer of a growing array of AI, robotics and automation devices, Alibaba, told the audience at the company’s Computing Conference in Hangzhou, China, to be ready for a long haul. This included being ready to start using the latest manufacturing technologies in order to overcome any impact that might come from the current war footing.

This was amongst a wide ranging collection of announcements made by the company, including one starring SAP CEO, Bill McDermott, who announced an extended partnership between the two companies that might have some interesting ramifications for SAP users around the world.

Not least amongst the points of interest in that announcement was that McDermott turned up in person to make it. After all, it was an announcement of only modest immediate news value – an extension of the joint marketing partnership, considered by Alibaba’s Head of Cloud Services, Simon Hu, as part one of a longer-term partnership plan that would move to providing cloud services in China for SAP.

The cloud services in question would be the delivery of both S/4HANA applications and SAP Cloud services into the Chinese and wider Asia-PAC marketplace as tool to help Chinese SAP users transition to the cloud. The interesting part of the deal, however, emerged from a press conference featuring Simon Hu after the announcement. As this was more SAP’s announcement than Alibaba’s he was cautious in his answers to questions on the deal, though he did make one telling point:

We will launch this onto the global market, together with a number of digitalised solutions and services.

It will be interesting to see what contribution the provision of HANA-based services and applications will make to the revenue of Alibaba Cloud (or 'aliCloud’ as most of the company’s representatives now call it). The company is committed to growing its network of data centers and has already made inroads into Europe with a center in Frankfurt. Though there were no specific announcements of new centers made at the event there was plenty of speculation that one for the UK market will at least be announced by the end of this year.

The speculation included the suggestion it will be based on facilities provided by Equinix.

McDermott was suitably enthused by the deal, however, exploding in an on-stage surge of ebullience:

Wow, wow, wow. We are better together. We are aiming to be Alibaba’s signature partner within the year.

Given the diversity of interests within the Alibaba marketplace this is an ambitious target, though it is possible to see it being a significant move in the development of SAP’s market reach, especially for its lead application, S/4HANA and its own cloud services delivery capabilities.

Now that the in-memory processing project from HP, known as The Machine, has stalled (a project aimed at delivering a new processor specifically architected for HANA and in-memory processing) McDermott’s obvious pleasure at the way this partnership is developing does beg the question as to whether Alibaba has come up with a HANA-specific cloud resource specification, one that could be rolled out to users around the globe with relative ease.

It would certainly explain McDermott’s enthusiasm for this next step of the partnership above and beyond getting greater penetration into the Chinese and Asia-PAC marketplace. Given Alibaba’s growth plans for its cloud services this could prove to be a readily available alternative to SAP rolling out is own cloud services.

Ma says 'toughen up'

Despite having stepped back from the front line of Alibaba leadership, co-founder Jack Ma put in an appearance at the conference to both administer a warning, especially to Chinese industry, and give a call for them to bite some bullets.

It would be hard to directly quote him as he was speaking to the rest of the world via simultaneous translation services, but his warnings were pretty clear. He told the audience that they now had to face up to the impact and potential long term consequences of the growing trade war, with the suggestion that a bit of suffering for many Chinese companies might not be a bad thing. Those, he suggested, that have never suffered have never had the chance to learn, and even the most successful of them now, may therefore easily fail tomorrow.

Innovation in manufacturing was, therefore, his clarion call and, for manufacturing industry, should not just be a shallow cry. He said that Alibaba developments are now targeted at building a platform that can enable innovation amongst manufacturing sectors as they try to meet the changes coming along. These include the need to redefine their supply chains and the way they handle and utilise customer information.

The need now is for industry to combine the new, more automated tools of mass production with the customer ideals for maximum personalisation, said Ma:

It used to be that the ability to produce 2,000 items all the same was considered awesome. Now the goal has to be to produce 2,000 items that are all different. This is where IoT can take you, and it has only just started. We are talking about a move to the Intelligence of Things.

There is also a need to combine such innovations and developments with what is happening in ecommerce. It will, he suggested, be painful for some, especially those in the established, traditional manufacturing sectors:

For them, the results could be like a blind man driving.

It’s about the data, stupid

This is one aspect of an underlying trend across Alibaba. Its core market has been, as with its key rival, Amazon, providing a comprehensive, all-pervasive retail platform. But one perceptible difference between them is that Alibaba is more upfront about its understanding that the beginning and end of its business is about the accumulation, deployment, analysis and monetisation of data. It does not see itself as a `technology’ company per se.

That being said, it is very clear about being at the bleeding edge of understanding when it comes to developing and exploiting the technologies that can advance those data handling goals. So much so that is has brought most of its research and development work, as well as its educational aspirations, together under the banner of the Damo Academy, where it now has some 800 researchers operating in eight centres around the world.

This has some obvious data utilisation and management goals such as the development of AI and machine learning tools, including the development of neural network and processing software technologies. But it also has some compute hardware objectives that it would be fair to classify as `bold’. For example, it already has developed a neural processing chip that is currently in beta test and is expected to be available for deployment some time next year.

It also has a growing interest in quantum computing developments and is currently building its own quantum laboratory within the Damo Academy, and its stated long term aim here is the development of its own quantum processor chip. No doubt this will involve working with partners in such fields, but it does suggest that the Academy may well be developing some serious materials science skills in its own right.

There are also advanced plans for the creation of a semiconductor design and manufacturing business to develop new processors and associated devices.

Its work in AI and machine learning has already expanded out into the world of autonomous vehicles, and a follow up article will take a closer look at what is happening here.

My take

As Alibaba pitches itself as a global contender in both retailing, retail service and cloud services provision, it has also decided to open itself up to closer inspection, something it could be argued its major competitors, Amazon and Google might consider with some positivity. And it is emerging on a broad range of fronts, including cloud service provision that, with this announcement about the SAP partnership demonstrating that hosting major players in the global business applications space is a definite goal. There is also its obvious capabilities in exploiting data to enhance the retail customers experience, and the retailers’ abilities to monetise the process, and a growing range of support in the research and development of both the software and hardware needed to make it all happen.

`Watch this space’ may seem an obvious, cliched observation to make, but it is most certainly appropriate in this case

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