Xabi Alonso doesn't have much coaching experience, but he was quite successful when he took charge of Leverkusen, and many believe he will do the same.
Regardless, I still believe in Real Madrid. They have a strong mentality, especially in the Champions League. They always have the upper hand in important matches.
Do you even need much coaching experience to succeed in your managerial career? Take a look at Pep Guardiola, all he had was a good understanding of the game football and infuse your own ideas. Xabi Alonso is yet another who has worked under the best managers in the world, I'm not surprised he had immediate impact. For his long term success and that of the squad, every big manager should have that tactics to accommodate both big and small players. This is my brief addition for him to be successful.
The only thing that scares me about Xabi Alonso is the fact that if Real Madrid doesn't get some useful results right away, he'll be eliminated very quickly, because we know that Real Madrid has to win, always, and if you don't, you'll be eliminated easily.