The cloud market in China is becoming the next big playground

24.10.2019 2,693 12

Martin Deshev

China’s dynamic tech scene has recently been in the news a lot. While the main stories are mostly political, there’s still a lot going on with the actual tech, too. Especially in the cloud computing market which records quite the growth.

In fact, China’s cloud market is becoming bigger and bigger with a growth pace which is quite higher than that of the rest of the world. It’s quickly gaining on the US and EU, taking more of their market share.

Gaining ground and traction

Data from Canalys shows that just for the second quarter of 2019 the Chinese cloud market jumped 58% compared to a year earlier. The market reached $2.295bn. In comparison, the global cloud market nets a 37.6% increase over the same period.

Things get even more interesting when delving into specific regions. North America has historically been the leader with the biggest cloud market. It’s $13.096bn for the second quarter of the year. Its global market share, though, has slipped from 52.9% to 49.8%.

The main reason for that is the Chinese market. Its share has grown from 7.6% to 8.7%. Canalys also notes that the use of cloud services and the development of the cloud infrastructure in China continue to increase. More and more Chinese organizations are starting to use the cloud and it’s getting attention from a wider array of companies from startups to big enterprises. Institutions have also increased their interest in using cloud services.

Alibaba’s magic

Perhaps unsurprisingly, the main cloud computing provider in China is Alibaba. It holds 43% of the local market and netted a healthy jump of 47% for its Q2 revenue.

However, there are two more local players on the rise. Tencent Cloud, for example, has grown by 88% while Baidu Cloud records a 92% jump. Amazon Web Services nets a 48% increase and it is third in the overall ranking in China.

As you can see, all major cloud service providers in China experience big growth. This means that the market is kicking into higher gear. The providers have already launched various campaigns and initiatives in order to attract more customers. They are also working on developing new tech like AI, telecommunications and even autonomous vehicles, all of which, of course, rely on the cloud.

All of this points to a very competitive market which will get even more competitive in the near future. And there are still several big names missing. Canalys hasn’t ranked Microsoft Azure, Huawei Cloud and China Telecom as they didn’t pass the threshold. But you know these companies won’t just sit back. In fact, they will actively try to gain even more ground in the market. So, China is going to be a very hot market for the cloud and this will surely affect the global cloud computing market and development. It will definitely be something worth keeping a close eye on.