China cloud infrastructure services grew 67% in Q419 says Canalys – as Covid-19 response praised

James is editor in chief of TechForge Media, with a passion for how technologies influence business and several Mobile World Congress events under his belt. James has interviewed a variety of leading figures in his career, from former Mafia boss Michael Franzese, to Steve Wozniak, and Jean Michel Jarre. James can be found tweeting at @James_T_Bourne.

China’s cloud computing market continues to intrigue because of its potential – and according to a new study from analyst firm Canalys, cloud infrastructure services in China grew 67% in Q419, making the country’s spend at more than one tenth of the overall market.

Total spend reached $3.3 billion (£2.8bn) in the quarter, with Alibaba Cloud accounting for almost half (46.4%) of outlay making it the clear market leader. Tencent Cloud increased its share to 18%, while Baidu AI Cloud is the third ranked vendor with 8.8% market share.

Not surprisingly, business in the most recent three months has been dominated by the Covid-19 outbreak. The Canalys note found that China’s cloud companies were quick to act and get resources available to businesses who needed it – something that Western providers are beginning to do themselves as the epidemic became a pandemic.

Alibaba Cloud offered credits to organisations enabling them to buy its Elastic Compute Service, as well as cybersecurity services, alongside making its AI-powered platform available for free to research institutions working on treating and preventing coronavirus. Tencent Cloud did the same, as well as launching a remote working offering, while Baidu AI Cloud made its online doctor consultation platform free for any queries.

Examples of US-headquartered companies following suit include Slack and Box, who earlier this week said researchers working on Covid-19 research, response or mitigation can access their paid plans for free. Dropbox said it would offer free Dropbox Business and HelloSign Enterprise subscriptions for a three-month period to non-profits and NGOs ‘focused on fighting Covid-19.’

“The benefits of cloud computing were demonstrated by the leading cloud service providers in response to the escalating coronavirus crisis,” said Yih Khai Wong, Canalys senior analyst. “They rapidly deployed continuity measures for organisations and established resource-intensive workloads to analyse vast datasets.

“Cloud companies opened their platforms, allowing new and existing customers to use more resources for free to help maintain operations,” Wong added. “This set the precedent for technology companies around the world that offer cloud-based services in their response to helping organisations affected by coronavirus.”

This can be seen as an optimistic analysis of China’s cloud ecosystem. According to Synergy Research, in September, hyperscaler capex was down 2% based on year-by-year figures, with the Chinese market, dropping 37% year on year in Q2, primarily responsible. China’s overall outlook remains poor, with the most recent analysis from the Asia Cloud Computing Association (ACCA) playing the country in second-last position for infrastructure, although noting that, alongside India, the size of the operation counted against them.

According to further Synergy figures from May, Amazon Web Services (AWS) remains the cloud market leader across all geographies, but the Asia Pacific (APAC) landscape differs from the other AWS-Azure-Google 1-2-3. Alibaba is the second player across APAC, with Tencent at #4 and Sinnet #6.

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