The price cuts constitute Alibaba’s latest effort to persuade developers to build data-intensive AI models and applications using its cloud services.
Rivals including Tencent Holdings and Huawei Technologies, which also cut cloud prices last year following Alibaba’s lead, have offered a number of promotions to convince tech companies to develop AI within their ecosystems
Alibaba Cloud was one of China’s earliest entrants to cloud computing. It currently serves about one-third of the local market.
Canalys analyst Zhang Yi said Alibaba’s discount campaign will likely push its competitors to lower prices as well.
“Alibaba still follows the strategy of attracting customers with low prices, targeting especially the medium and small customers who are more price-sensitive,” she said.
Another industry analyst who declined to be named because he is not permitted to speak to media said that Alibaba’s price cutting exercise this time is more aggressive than usual, showing the company’s focus on courting customers.
“The discount even applies to the undelivered orders for existing customers. This is seen as breaking the norm of the market,” he said.
According to Alibaba, existing customers get to enjoy the new cheap rates if they choose to renew their contracts with Alibaba for another year.
The analyst added that it was also unusual that Alibaba slashed prices for some of its new products whereas it was only willing to discount old products in the past, marking another break from the norms.
Reuters
