Amazon (NASDAQ:AMZN) Web Services (AWS) is the largest public cloud platform in the world. It controlled 48% of the public cloud market in 2018, according to Gartner, and it offers its services in 69 availability zones across 22 global regions. Many analysts focus on AWS’ rivalry with Microsoft, which ranked second with a 16% share last year. Yet fewer analysts discuss the ways it competes with Chinese tech giant Alibaba (NYSE:BABA), which ranked third with an 8% share. However, Alibaba Cloud nearly doubled its revenue in 2018, easily outpacing the growth of Amazon and Microsoft’s cloud platforms. It’s also the largest cloud platform provider in China by a wide margin.That’s why it wasn’t surprising when AWS CEO Andy Jassy recently told Nikkei that Alibaba was catching up in the cloud market. Jassy noted that Alibaba didn’t have “much of a presence in the U.S. or Europe right now,” but that it was a major competitor in China. Amazon currently ranks fourth in China’s cloud market, according to Canalys, with a 9% share. Based on those facts, investors might be wondering if Alibaba is a better cloud stock than Amazon. However, a deeper dive into both businesses reveals that Amazon is easily a better long-term play on cloud computing for three simple reasons: its reputation, scale, and profitability.Both companies generate most of their revenue from their e-commerce marketplaces. However, Alibaba’s core Taobao and Tmall marketplaces only facilitate transactions between individuals and businesses. These marketplaces don’t take on any inventories, and fulfill orders via third-party logistics services. Amazon’s first-party marketplace takes on inventories and fulfills its orders with its own logistics network, which resembles the lower-margin business model of Alibaba’s main rival JD.com, the top direct retailer in China. However, Amazon’s third-party marketplace operates in a similar manner as Taobao and Tmall. As a result, Amazon’s marketplace operates at much lower margins than Alibaba’s marketplace. Last quarter, its North American business had an operating margin of just 3%, and its international business remained unprofitable. Alibaba’s core commerce business had an operating margin of 31.7% last quarter. However, AWS is consistently more profitable than Amazon’s marketplaces. The cloud unit generated just 13% of Amazon’s sales but 72% of its operating profit last quarter. Its operating margin of 25.1% also made it Amazon’s most profitable business unit. Alibaba’s cloud business, which generated 8% of its revenue last quarter, remains deeply unprofitable, just like its smaller digital media and innovation initiatives businesses. This indicates that Alibaba subsidizes the growth of these side businesses with the profits from its e-commerce marketplaces. Amazon adopts the opposite strategy by subsidizing the growth of its e-commerce ecosystem with the profits from its cloud business.