Analysis of the cloud market in China by Canalys suggests that spending will triple to $84.7 billion by 2026, up from $27.4 billion in 2021.
Lasting pandemic-related consumption drivers, such as remote working and learning, e-commerce, and content streaming remained important contributors, and the boom in digital transformation strategy execution by traditional enterprises has increased the demand for services.
Alibaba Cloud maintained its lead and was the number one player in the cloud market for 2021, with Huawei Cloud and Tencent Cloud in second and third place respectively. Baidu AI Cloud occupies the fourth position. Together the top four cloud vendors accounted for 80 per cent of the market in 2021, and all four are launching strategies to capture growth opportunities across industry vertical solutions.
The market is witnessing a diversification trend in its client base, ranging from the Internet industry to traditional industries such as manufacturing, finance, and retail. Increasing business resiliency is a key fuel for digital transformation efforts and will continually drive cloud services spending through operational workload migration and cloud-native application development.
“Enterprise investment in digital transformation is continuing at pace and has created a massive opportunity for cloud service providers,” said Canalys research analyst, Blake Murray. “But these efforts are multi-year, highly complex projects, which require cloud vendors to provide technical capabilities and professional experience across multiple vertical areas to satisfy customised requirements. Developing trust with channel partners is more important than ever to meet these requirements, build trust with customers, and ultimately drive competitive positioning.”
Canalys research analyst, Yi Zhang, said: “Although government policy support for digital transformation has brought about an uptick in cloud adoption in traditional industries, customers still have a limited ability to manage and develop cloud technologies. In addition to technical performance and data security, cloud vendors need to focus more on how to reduce the learning time and management costs of enterprises. Tapping into new business value for traditional enterprises through cloud services is also critical to the future of the industry.”
Canalys defines cloud infrastructure services as services that provide infrastructure-as-a-service and platform-as-a-service, either on dedicated hosted private infrastructure or shared public infrastructure. This excludes software-as-a-service expenditure directly, but includes revenue generated from the infrastructure services being consumed to host and operate them.