Cloud Market In China Expected To Reach New Heights In 2021

The COVID-19 pandemic has resulted in a huge boost in the usage of cloud services—a trend that is expected to continue to grow across the globe. During the last few months, an increased use of cloud computing resources has been seen among large corporations and small- to medium-sized businesses, with a recent survey by MariaDB reporting that 40% of respondents indicated that COVID-19 is accelerating their move to the cloud.

"It makes sense,” wrote the researchers at MariaDB. “The cloud lets companies increase capacity without investing in hardware and facilities. Additionally, there is less need to add staff if your cloud provider is maintaining the infrastructure and extending the abilities of your existing team. With the disruptions from COVID-19 and the probability of future disruptions, there has never felt like a more urgent time to move into the cloud."

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In China, public cloud spending is predicted to increase by 58% to $19 billion this year alone. Spending on Chinese cloud services already hit a record high in the second quarter, with companies spending $4.3 billion on cloud services in the first half of the year, an increase of 70% from the same period a year ago, according to research firm Canalys.

As of June, China made up an estimated 12.4% of the global cloud market, up from 9.6% in the year-earlier period. Alibaba Group was responsible for about 40% of total cloud spending in China in the second quarter, more than double its closest rivals, including Huawei Technologies and Tencent Holdings. This uptick is partly the result of restriction from the Chinese government on foreign technology firms, which has kept many of the world’s largest cloud providers from competing in the Chinese market.

Government-led investments in initiatives that emphasize digital applied sciences in public companies have also benefited China’s cloud suppliers. “The cloud market is growing quickly in China in part because individual and business broadband adoption is still growing at a robust pace,” said Rob Atkinson, President of the Information Technology and Innovation Foundation, a Washington-based think tank for technology policy.

Alibaba Cloud is the company’s fastest growing segment and is the world's third largest and Asia Pacific's largest Infrastructure-as-a-Service (IaaS) provider. As China continues to increase its spending in this sector, the company can anticipate continued growth in the industry.