Amazon's cloud business has become a huge profit driver for the company. Analysts see the same happening for Alibaba's cloud computing arm.
Cloud computing: 'next frontier'
"Cloud is the next frontier for Alibaba, in my opinion," Daniel Ives, managing director of equity research at Wedbush Securities, told CNBC. Cloud computing accounted for 7% of Alibaba's revenue in the June quarter. And while the business unit was still loss making, those losses narrowed and the margins improved.
"I believe that Alibaba will continue to benefit and grow for many years to come from the revenue and earning growth fly-wheel of services it has already replicated ," John Freeman, equity analyst at CFRA Research, told CNBC by email.Freeman said cloud will be one of Alibaba's biggest "flywheel-driven businesses" — or growth engine.
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