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Mainland China’s cloud infrastructure services market – covering both infrastructure as-a-service and platform as-a-service – is expected to grow to $84.7 billion by 2026, according to market analyst firm Canalys.
That amount reflects a five-year CAGR of 25 per cent from the $27.4 billion market the analyst firm counted in 2021, a year in which the market grew by 45 per cent from 2020’s $18.9 billion.
The growth from 2020 to 2021 was mainly pandemic-induced – the rush to handle work from home, learn from home, ecommerce and online entertainment.
“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,” Canalys reps explained. And with that diversification comes a need for digital transformation that in turn drives the cloud services spending, with workload migration and application development to the fore.
“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 customized requirements,” said Canalys research analyst Blake Murray.
These tasks would be difficult for customers to realize on their own, even with government policy support, explained another Canalys research analyst, Yi Zhang.
China’s top four cloud operators took 80 per cent of Middle Kingdom cloud market, led by Alibaba’s 37 per cent market share, followed by Huawei (18 per cent), Tencent (16 per cent) and Baidu (nine per cent).
Alibaba took a slight knock in market share thanks to Beijing tightening regulations, said Canalys. Alibaba’s profits have been falling with Beijing’s continual crackdowns.
These crackdowns include: a September order requiring Alibaba to stop blocking links to rivals’ e-tail services; a forced restructure to financial services biz Ant Group which had its IPO blocked at the last minute; and the company as a whole has been ordered to rectify naughty data collection behavior.
Meanwhile Huawei, Tencent and Baidu all had tremendous annual growth at 67, 55, and 55 per cent respectively. ®
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