Chinese cloud market sees huge rise, but still long way behind US giants

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By Barclay Ballard
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Cloud computing in China has shown impressive growth this year, but is still smaller than Microsoft Azure

The cloud computing market
(Image credit: Pexels)

The cloud computing market in China is going from strength to strength but still has plenty of growing to do according to the latest research. Market analyst firm Canalys reports that the sector grew by 65% in the third quarter of this year, taking in $5 billion in revenue.

Despite the impressive growth, China’s cloud industry takes in less revenue collectively than Microsoft Azure alone, which banked $6.9 billion during the quarter. Currently, China’s cloud expenditure represents 13.7% of the global total, less than would be expected for a market of its size.

Nevertheless, 2020 has been a good year for the Chinese cloud market, with digital acceleration partly driven by the coronavirus pandemic. In response to the crisis, many domestic businesses have had to adopt cloud-based digital tools to keep employees connected and productive.

Chasing top spot

Canalys estimates that cloud spend in China has grown by $2 billion year-on-year in 2020. Some of the biggest domestic players, the likes of Alibaba Cloud, Huawei Cloud, Tencent Cloud, and Baidu AI Cloud have shown performed strongly, expanding the customer bases in a range of industries.

“Demand for cloud-based services reached new heights in China, as organizations reprioritized IT spending and accelerated digital transformation projects,” said Canalys Chief Analyst Matthew Ball. “Remote learning and working, as well as gaming, streaming, e-commerce and other online services continued to drive consumption of cloud infrastructure resources. This, combined with the digitalization of processes and operations within enterprises and government organizations, will maintain demand. Organizations have overcome challenges caused by the COVID-19 pandemic by using digital services developed by cloud service providers.”

Although the cloud market in China may still trail the US, the economic expansion taking place in the country, and the focus on digital transformation in the country, will surely result in continued industry growth.

Via The Register

Barclay Ballard
Barclay Ballard

Barclay has been writing about technology for a decade, starting out as a freelancer with ITProPortal covering everything from London’s start-up scene to comparisons of the best cloud storage services.  After that, he spent some time as the managing editor of an online outlet focusing on cloud computing, furthering his interest in virtualization, Big Data, and the Internet of Things.