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Alibaba Group to Merge Subsidiaries' Technical Staff

Ebrun.com, 5/23/12

Hangzhou-based e-commerce company Alibaba Group reportedly may merge a number of its subsidiaries' technology teams and replace its Oracle database with a distributed data management system in order to meet scalability needs of its large-scale applications. According to an industry source, after being integrated, the new technology team may be spun-off as an independent company.

According to the source, the teams that may be integrated include Alibaba.com's (1688.HK) operations maintenance, database administration (DBA), and platform technology departments, as well as the "Big Taobao" operations maintenance, DBA, and core systems departments, Alibaba Cloud Computing ("AliCloud")'s operations maintenance and DBA teams, and Alibaba Group's security team.

Plans for the move began to be discussed in early 2009, said the source.

A former Taobao technology employee said the change only involves merging technical departments, but said he had heard nothing of spinning off the newly formed entity. Another source close to Alipay senior management also denied the spin-off news as an unfounded rumor, speculating that the team might be coordinated at the group level but not necessarily become an independent subsidiary.

When asked about the rumors, Alibaba group VP Tao Ran and PR director Gu Jianbing both declined to comment.

Alibaba previously acquired Oracle database software, IBM edge servers, and EMC2 storage equipment, but as Alibaba.com, Taobao, and Alipay's user bases and corresponding user data continue to grow, the centralized database system is struggling to meet the demands of the company's rapid business expansion. In addition, enormous software, hardware, and operations and maintenance fees are increasing the company's operating costs.

Keywords: corporate restructuring e-commerce Internet Alipay Alibaba.com 1688.HK Tao Ran Gu Jianbing AliCloud Big Taobao Alibaba Group

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