Cloud Computing and IoTSimon Hu, President of Alibaba Cloud

1

Promising Cloud Computing Market in China

Part 1

2

Source: Gartner Forecast: Servers, All Countries, 2015 YR-2022 YR, 2Q18 Update

CY2015 CY2016 CY2017 CY2018E

12,33311,45111,10411,091

3,3442,9982,6822,484

Global Greater China

22.39% 24.15% 26.18%27.12%

CY2015 CY2016 CY2017 CY2018E CY2019E

1/4Chinas Cloud Computing Market Accounts for 25% of the Global Market, and Continues to Grow

Worldwide vs. China Annual Server Shipments Revenue Generated per Server on Alibaba Cloud ( Unit: Thousands )

Gartner Forecast: Servers, All Countries, 2015 YR-2022 YR, 2Q18 Update

Source: Alibaba Cloud

3

Alibaba Cloud-style Growth

4

Part 2

IDC Semiannual Public Cloud Service Tracker, 2015 - 2017

Source: IDC Semiannual Public Cloud Service Tracker, 2015 - 2017

2-9CY2017

Company A Provider 1 Provider 2 Provider 3 Provider 4 Others Alibaba Cloud Provider 1 Provider 2 Provider 3 Provider 4 Others

Alibaba Clouds market share equals the sum of the next 8 largest vendors in the China market (CY2017).

17.6%

2.5%4.6%

7.4%

14.0%

53.9%

19.9%

4.4%3.6%

8.0%

9.1%

55.0%

20.5%

1.8%6.7%

7.7%

9.1%

54.2%CY2015

24.7%

5.4%

6.5%

7.6%10.3%

45.5%30.8%

5.6%6.1%

7.5% 8.7%

41.4%37.7%

5.7%6.8% 7.3%

12.7%

29.8%CY2016 CY2017 CY2015 CY2016 CY2017

5

Company A Company A and Alibaba Cloud Have Become the Market-leading Hyperscale Cloud Providers

IaaS IaaSUS IaaS Provider Revenue Market Share China IaaS Provider Revenue Market Share

FY2017 FY2018

40%

31%

FY2017 FY2018

49%

40%

1 2

Source 1: Publicly available data Source 2: Alibaba Cloud

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50040%40% of China Top 500 Companies and Nearly Half of China Listed Companies are on Alibaba Cloud

500 40% of China's Top 500 Companies are on Alibaba Cloud 49% of China Listed Companies are on Alibaba Cloud

80%Source: Wind database, Alibaba Cloud, as of June 2018

, 20186

7

Alibaba Cloud Has Established Itself as the Innovation Engine for Technology Companies in China

80% of Chinas Technology Companies are on Alibaba Cloud

Source: Alibaba Cloud

Internet

Communication & Media

Finance

E-commerce

Government

Manufacturing

Education & Research

Institutions

Telecommunications

Medical Health

Artificial Intelligence

Retail

Tourism, Culture, Sports &

Entertainment

Transportation, Logistics &

Warehousing

IoT Technology & Services

Real Estate & Constructions

Energy

Agriculture

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Our Customers Come from a Broad Spectrum of Industries

CY2016 CY2017 CY2018

Education & Research Institutions

CY2016 CY2017 CY2018

Manufacturing

CY2016 CY2017 CY2018

CY2016 CY2017 CY2018

CY2016 CY2017 CY2018

CY2016 CY2017 CY2018

E-commerce Internet Service Finance Media

Source: Alibaba Cloud, as of August 2018

20188

9

Over the Past Few Years, Customer Spending on Alibaba Cloud Has Skyrocketed

Computers Computing

Information Data

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ITDTEvolution from Information Technology to Data Technology

Redefining Productivity

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Business Transformation Operation Optimization Employee Empowerment User Experience Improvement

12

Challenges to Enterprise Digital Transformation

Source: Kweichow Moutai financial reports, Mengniu financial report, 2017 Global Diary Top 20

* **&201720

Created a retail omni-channel consumer system

Decision response rate surged by more than 80%

Warehousing efficiency increased by 90%

Established a consumer insight platform for precision marketing and business transformation

Reduced logistics cost by over 10%

The Largest Liquor Producer in China* One of the Top 10 Dairy Product Manufacturers Worldwide The Fastest Growing Dairy Company in China**

13

Cloud Computing Empowers New Retail Development

80% 90%

Created a retail omni-channel consumer system Decision response rate surged by more than 80% Warehousing efficiency increased by 90%

The Largest Liquor Producer in China

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Built a new distributed cloud system to ensure smooth running and stable operation of mission-critical applications

Provided distributed technical architecture consulting services

Ranked 29th among 2017 Global Bank Top 1000* Ranked 131st among 2017 Global Bank Top 500* Best Personal Internet Banking 2017**

Established a shared financial platform and supported over 4,000 concurrent transactions per second

System update cycle shortened from weeks to days

Developed a mobile R&D and management platform

Increased R&D efficiency by 2 times

Reduced app release frequency to 1 day and shortened the app launch time to only 3 seconds

Source: The Banker, China Financial Certification Authority

* **

15

Cloud Computing Drives Financial Industry to Improve Efficiency

Built a new distributed cloud system to ensure smooth running and stable operation of mission-critical applications

Provided distributed technical architecture consulting services

Ranked 29th among 2017 Global Bank Top 1000

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Leverages AI technology to extract game highlights automatically

Data acquisition capability increased by 10 times, and data processing efficiency increased by 20 times

The Largest TV Station in China The Largest News Agency in China

Built a new media center and optimized operation efficiency

Enabled 6-second production of news content. Reached 120 million views of videos

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Cloud Computing Facilitates Media Industry Transformation

AI

1020

Leverages AI technology to extract game highlights automatically Data acquisition capability increased by 10 times, and data processing

efficiency increased by 20 times

The Largest TV Station in China

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Reconfigured live broadcast network through edge computing

Delivered second-level live broadcast quality monitoring

Transcoding technology reduced bandwidth cost by more than 30%

Chinas Leading Interactive Streaming Service Platform Listed Game Company with Global Presence

Enabled unified and easy management of global hybrid cloud

New game oversea launch time reduced from months to hours

Improved resources utilization rate by more than 30%

19

&Cloud Computing Supports Game and Video Industry Growth

30%

Reconfigured live broadcast network through edge computing Delivered second-level live broadcast quality monitoring Transcoding technology reduced bandwidth cost by more than 30%

Chinas Leading Interactive Streaming Service Platform

20

Source: *China Development and Reform Commission **China Pharmaceutical Industry Information Center

* **

Achieved unified deployment, scheduling and management of thousands of nodes on hybrid cloud

Increased efficiency of genetic data processing and project delivery by 2 times

One of the Pilot Organizations Approved by the NHFPC for High-throughput Sequencing Clinical Application*

Ranked 16th among China's Top 100 Pharmaceutical Companies** Chinas Largest Medical and Health Service Group

Built a business middle office

Improved screening accuracy of compounds by 20% with AI technology

Built an image cloud to greatly improve doctors efficiency

Promoted digitization and intelligent transformation of 400 medical examination centers

21

Cloud Computing Accelerates Changes in Healthcare and Life Sciences

2

Achieved unified deployment, scheduling and management of thousands of nodes on hybrid cloud

Increased efficiency of genetic data processing and project delivery by 2 timesOne of the Pilot Organizations

Approved by the NHFPC for High-throughput Sequencing Clinical

Application

22

Source: *OPPO official information, **Euromonitor

*OPPO **

Improved data-driven consumer analysis to achieve precision marketing and operation optimization

Utilized Alibaba Cloud platform to launch overseas business within a month and serves over tens of millions of customers in India

Chinas Best-selling Mobile Phone and Fifth-largest in the World by Sales Volume* The Worlds Leading Home Appliances Brand**

Assisted Haier to achieve strategic transformation and business upgrade

Used Alibaba Cloud intelligent voice technology to release the first far-field smart TV

23

Cloud Computing Enables Manufacturing Industry Upgrade

Improved data-driven consumer analysis to achieve precision marketing and operation optimization

Utilized Alibaba cloud platform to launch overseas business within a month and serves over tens of millions of customers in India

Chinas Best-selling Mobile Phone and Fifth-largest in the World by

Sales Volume

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Helped build an electricity consumption system to support 40 million electricity meters

Increased billing efficiency by 7 times

The Worlds Largest Utility Company Ranked 2nd among Global 500

Chinas 2nd Largest Power Grid System Ranked 3rd among Fortune World 500

Built a core production scheduling system, covering 7 provinces and cities

Greatly improved operation efficiency

Built an E-commerce platform and achieved 227.6 billion GMV

Supported Sinopecs globalization initiative, covering 36 countries and regions

Source: Fortune Global 500 2018

2018 500

25

Cloud Computing Aids Energy Industry Innovation

4,0007

Helped build an electricity consumption system to support 40 million electricity meters

Increased electricity calculation efficiency by 7 times

The Worlds Largest Utility Company Ranked 2nd among Global 500

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10150TB

PB

National Astronomical Observatory of China (NAOC) China Meteorological Administration

Built the Virtual Observatory with 150TB of data pertaining to 1 billion celestial bodies Provides China Sky Eye with computing, storage and software management solutions

Provides on-demand scalable resources to fully upgrade usage patterns Stores PB-scale environmental and meteorological data, and creates value through real-time analysis

27

Cloud Computing Helps Humans to Understand the World

EU

MEAHTK

Japan

ASEAN

ANZ

India

US

28

One Belt, One Road Offers More Global Opportunities

Alibaba Clouds Evolving Technology

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Part 3

CDN SLA

Offers around 20 all-region price reduction in FY 2018, pertaining to over 150 products with the highest discount reduction at around 70%

Lower Cost Stronger and Stabler Higher PerformanceSupports second-level billing and multiple billing options

Data Center Product SLA

Provides 24 x 7 data center, highly available backbone network and 3+N BGP multipath

Enables Intelligent scheduling of millions of serves, microsecond latency and Exabyte storage

Compute

Enhances application performance by 50%; supports SAP & Oracle applications

Network

Upgrades data center network bandwidth to 25GB, single-instance bandwidth to 35GB; decreases latency and supports global MNC network

Storage

Increases single cloud disk IOPS to 1 million and throughput to 4,000 MB

Achieves 1 billion file cache capability and 1T throughput for single node; provides 320G DDoS defense capability and over 10T defense capability across the entire network

Database

Releases PolarDB, which is fully compatible with Oracle, costing 10 times lower than that of other commercial databases

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Continuous Iteration to Improve Foundational Cloud Capability

Continuous Delivery

Code Service

Project Management

Business Middle Office

Data Middle Office

Data Management and Analytics, Middleware, Artificial Intelligence, etc.

Computing, Storage, Network, etc.

Business-oriented data collection

Data-driven business decisions

ET Brain

One-stop Collaborative Development Cloud for Enterprises

Testing Service

Release Assurance

Pipeline Service

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Business and Data Middle Office-driven Digitization, Service Guarantee for Entire Development Life Cycle

Driving Force Behind Digital Transformation

Traditional On-premises

Virtualization product from vendor A

Big data product from vendor B

Other products from vendor C

System Integration

Apsara Stack

An integrated, software-defined, verified, and ready-to-use cloud system

Out-of-box deployment and consistent maintenance

Proven stability through vigorous stress-testing

Hyper-scale deployment + hot upgrade

Comprehensive cloud services such as big data, middleware and security

High deployment costs

Business continuity risks

Scaling and upgrade challenges

Limited cloud components

Security Public Cloud Scalability Compliance

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+

Hybrid Cloud: Harness the Power of Alibaba Cloud

2018

40%

2017

648

2018

50%

DDoS

36Web

40% 6.48M 50% 3.6B

CSA STARDJCP MLPS AICPA CNAS

PCI DSS TRUCS MPAA HIPAA Trusted CloudC5MTCS T3

ISO 27001 ISO 20000 ISO 22301

KMS

Protected over 40% of Websites in China by the end

of 2018 Q1

Fixed over 6.48 Million

Vulnerabilities in 2017

Defended 50% of High Volume DDoS Attacks in China by the end of 2018 Q1

Resists 3.6 Billion Web, Brute-force

and Other Attacks on a Daily Basis

5. Physical Security1. Transmission Encryption 2. Key Management 3. Storage Encryption 4. Hardware Encryption

ECS Encryption OSS Encryption RDS Encryption

Encrypted Hardware Device

Encrypted Algorithm

Data Center Security Data Degaussing

VPN Site-wide HTTPS

Source: Alibaba Cloud

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Security: Ensure Platform and Data Security with Comprehensive Compliance

Compliance Certification

Alibaba Cloud Provides Comprehensive Security Services and Guarantees Data Privacy

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AI - ET Brain Industry AI - City

35

AI ET Brain Industry AI - Manufacturing

AI

AI

Inclusive Finance Intelligent Operation Industry Finance

Digital Transformation of Financial Institutions

Risk Management AI Platform Ecosystem

Personalized Recommendation

Big Data Risk Control

Data-driven Operation

Intelligent Service

Intelligence Monitoring

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AI - ET Brain Industry AI - Finance

Business Cloud Computing Taking Off

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Part 4

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8,000ISV 2,000 Alibaba Cloud Has Over 8,000 Partners and More Than 2,000 ISVs

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8,000ISV 2,000 Alibaba Cloud Has Over 8,000 Partners and More Than 2,000 ISVs

Retail Marketing Finance Logistics Travel Healthcare Office AutomationManufacturing Local Services Gaming Entertainment

More Industries

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Business Dashboard

HemaCloud System

Retail Cloud

Alibaba Open Platform

Procurement Cloud

Marketing Cloud

Data Analytics for Merchants

One Data

Alibaba Financial Cloud Logistics Cloud Travel Cloud

Internet Car

supET

Industrial Cloud Local Service Cloud Gaming Cloud

Hilo Gaming Engine

Entertainment Cloud

Streaming Cloud

Health Cloud

YunxiaoCloud Display

Enterprise Service CloudAlibaba BaaS

SolutionsDigital Media Cloud

Alibaba Financial Cloud POS Solutions

Business as a Service Powered by Alibaba

Alibaba Businesses

(1) (1)

Note:(1) Non-consolidated businesses

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THANK YOU

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