BCX and Alibaba Cloud executives in Thailand after signing the exclusive deal.
Telecom subsidiary BCX has signed an exclusive deal with Alibaba Cloud to bring the Chinese company’s services to the South African market.
The parties signed an exclusive distribution agreement in Thailand yesterday to grant BCX exclusive rights and authority to distribute Alibaba Cloud’s products and services in South Africa.
The signing ceremony was attended by Jonas Bogoshi, CEO of BCX; Selina Yuan, Vice President of Alibaba Group and International President of Alibaba Cloud Intelligence; and Daniel Jiang, general manager for the Middle East and Africa at Alibaba Cloud Intelligence.
The exclusive deal comes after ITWeb first reported in July that Alibaba Cloud would be launched in the local market after signing a channel agreement with start-up BGPAfrica.
Mervyn Goliath, MD of BGPAfrica, has since welcomed the BCX-Alibaba pact, saying it will “certainly provide impetus to much-needed digitization in the region”.
Alibaba Cloud services’ entry into South Africa via BCX comes as multinational hyperscalers — such as Amazon Web Services (AWS) and Microsoft Azure — have already established data centers in South Africa as more companies move their workloads to the cloud.
With the recent landing of the Equiano submarine cable, Google recently told ITWeb that it will also throw its hat in the ring as it intends to invest in more cloud infrastructure in SA to take on the incumbents.
According to Statista Cloud Market Report, in the fourth quarter of 2021, AWS was the leading provider of cloud computing services with a global market share of 33%, followed by Azure (21%), Google Cloud (10%), Alibaba Cloud (6% ), IBM Cloud (4%), Salesforce (3%), Tencent Cloud (3%) and Oracle (2%).
Use the next frontier
In a statement, BCX says Alibaba Cloud offers a range of cloud computing products and services across the full range of ICT applications, including database, networking, security, analytics, big data and application services.
According to the telecom entity, this complements BCX’s offering as a vendor-agnostic systems integrator, developing solutions for customers based on their precise use case across a wide range of technology areas and vertical sectors.
Alibaba’s Jiang said: “We are excited to partner with BCX to bring advanced, secure and reliable cloud services and technologies to businesses in South Africa and beyond. We believe our partnership with a local industry leader like BCX will further advance the local cloud computing market and better support local businesses to embrace a digital economy.”
BCX believes the South African market will benefit from greater choice, competitive prices and powerful ICT and cloud technologies made possible by the partnership.
The companies aim to combine their technological capabilities, expertise and strengths to provide services that enable businesses to leverage cloud computing technologies to grow and evolve.
Bogoshi, CEO of BCX, says: “Africa is seen as the next frontier when it comes to adopting new technologies. We are proud to partner with a renowned global player like Alibaba Cloud. The partnership gives BCX the opportunity to expand our reach and services and create additional revenue streams, which is part of our broader strategy to grow our business and expand our partner ecosystem.
“As the exclusive South African distributor of Alibaba Cloud, BCX will be the primary point of contact for all resellers in South Africa and intends to offer Alibaba Cloud services across the continent through distribution and distribution partners,” Bogoshi added.
The companies aim to enhance the technology capabilities of small, medium and large enterprises across the continent through the partnership.
Telkom CEO Serame Taukobong recently said he plans to rebuild BCX, a struggling company in the group that has suffered losses in recent years.
In the current reporting period, BCX’s revenue fell 2.6%, a situation the CEO says will soon reverse.
Commenting on the deal, Jon Tullett, Associate Research Director for IT Services and Cloud at IDC, Sub-Saharan Africa, said: “It’s always good to see new global cloud investments coming into the country and they probably won’t just be welcomed as new entrants , but as a new force driving competitive cloud business across the ecosystem of existing providers and partners.”
Tullett believes Alibaba Cloud will have a challenge to compete with the momentum of existing hyperscalers given their well-established partner networks and customer bases, “but at the same time, it’s important to highlight that CIOs in SA are fully committed to delivering workloads.” are committed to multiple clouds and looking for the best options on alternative platforms; and this practice will work in Alibaba’s favor.”
As for whether the deal will change the fate of the underperforming BCX, Tullett says: “It’s a big deal to sign, but success will take a lot more – the full go-to-market strategy isn’t clear yet, and it there will be numerous opportunities to build a service portfolio around a central cloud offering.
“It certainly has the potential to make a huge difference for BCX, but the deal itself will not be the measure of success. Operationalizing it and converting it into revenue, that’s the metric and will take time to deliver.”
Still, he acknowledges that Alibaba Cloud is a significant cloud player globally, noting that Western markets tend to overlook the size of Alibaba (and other Chinese players like Huawei).
“It’s a premier hyperscale player in the IaaS space [infrastructure-as-a-service], and a growing competitor in applications. Alibaba Cloud doesn’t have the same geographic reach in terms of regions served as its main competitors, but it’s right there in terms of IaaS service portfolio.”
Adds Tullett, “The big questions here are not the capabilities of Alibaba Cloud, but the strategy and execution of BCX to bring it to market.
“It is very unusual for a cloud provider to enter into an exclusive relationship with a delivery partner – other cloud providers have forged extensive partner networks to accelerate adoption. The terms of this relationship play a large role in determining the resources used to build services and their success in SA. As the only measure, the availability of skills for local customers will be an important factor.”