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Alibaba’s New Partnership With Intel Shows Their Ambition to Be Full Service IoT Provider

China-based Alibaba has been undergoing a lot of changes lately. One of the most talked about is the changing of the guard occurring as its lovable founder Jack Ma steps down as chairman to pursue philanthropic endeavors and take time for himself. As he puts it, “I don’t want to die in the office, I’d rather die on the beach.” While this has taken the headlines, an even more important change has been happening, namely a shift in strategy that is much broader than being the center for the online wholesale universe.

They have long been interested in brick and mortar retail, mirroring the expansion that Amazon is taking with its acquisition of Whole Foods, with plans to open thousands of cashierless stores and recent announcement to purchase one of India’s largest retail chains. Alibaba has been opening up its own supermarkets called Hema and has already seen dividends from what it calls “new retail” where online and offline purchases are analyzed in order to provide a better shopping experience. Their data has already shown that this strategy can create more average spending per consumer, a great sign for any retailer.

To do this they have to use an array of IoT sensors, software and edge computing technologies. They must feel like their work in this sector is valuable beyond just making their stores more efficient because they just announced a partnership with Intel to build an open architecture platform to integrate hardware, software and IoT cloud products. Much like Microsoft is trying to do with their Azure computer vision API, Alibaba wants to offer edge and cloud computing as a service. The difference is that Alibaba and Intel will be able to offer a full stack solution that integrates the hardware, software, computing and storage. This will not only make them a more appealing offering it will give them even richer information about how their technology is being used and hopefully an advantage in the race for IoT innovation.

The interesting thing about IoT technologies is that it can be applied in a wide variety of settings. For this reason, Alibaba probably thinks selling their IoT technology is a better strategy than trying to keep it internal as a competitive advantage in their battle for “new retail.” The markets for IoT include manufacturing, smart buildings/cities and transportation. Alibaba and Intel have even gone on the record as saying that they are working on an intelligent transportation solution that uses v2x (vehicle-to-everything) communication.

This initiative shows that Alibaba is using a similar strategy to their rival Amazon but sticking to their business-to-business focus. Rather than trying to come out with a consumer product like Amazon did with their Alexa devices, Alibaba wants to create an enterprise service around the growing IoT sector. As they have already proved, while there is a lot of good headlines in consumer goods there is lasting value in enterprise services.

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