On August 27, 2018, e-commerce giant Alibaba announced that it would push its incorporation of open ledger technology further by launching a blockchain service through its cloud computing arm, Alibaba Cloud.
Alibaba’s Blockchain Push
According to a report by The Asia Times, Yi Li senior software engineer stated that the company now understands the value of blockchain in providing “the next most reliable infrastructure” for the internet. Combined with cloud computing, blockchain technology has the potential to push productivity and innovation for this multinational logistics and manufacturing company.
While CEO Jack Ma has been skeptical of cryptocurrencies like Bitcoin in the past, he has been publically interested in the application of blockchain technology for business processes. In May 2018, he became the latest in a group of high profile tech personalities to support the “blockchain not Bitcoin” point of view.
This was in response to questions about the long-term viability of Bitcoin due to its dramatic fluctuations over the last year. Ma went on to state that blockchain could be the solution to problems scaling and privacy issues in Alibaba’s processes.
For a company like Alibaba, blockchain technology could prove to be a boon to their global operations. Alibaba seeks to combine the flexibility and storage capacities of cloud computing with the security of blockchain. This will allow them to store client information confidentiality while ensuring shipping and delivery of its products.
Competitors May Follow
Given that Alibaba finds itself at the center of many business transactions, their cloud capabilities could be used in scenarios which require supply chain finance and data asset transaction management. Blockchain can allow businesses like Alibaba the ability to not only track goods and services, but more subtle network interactions like finances and data.
Use of blockchain technology for a global logistics company like Alibaba means that other companies will be watching their operations closely. For a business model which predicates itself on maintaining a massive amount of information and ensuring delivery of services, this could signal a complete change of paradigm.
Adoption of blockchain technology, the Internet of Things, and smart manufacturing are three core technologies which Jack Ma pointed to as revolutions in the e-commerce. Now that Alibaba is applying these technologies Ma will have the opportunity to see this theory in action.