Friday, 26 March 2021 08:23

China cloud infrastructure spending in 4Q20 sets record

China cloud infrastructure spending in 4Q20 sets record Pixabay

Spending on cloud infrastructure services in China in the final quarter of 2020 grew 62% year-on-year to US$5.8 billion (A$7.7 billion), the technology analyst firm Canalys says.

This was an increase of US$2.2 billion over the fourth quarter of 2019 and US$740 million more than the third quarter, setting a record.

China accounted for 14% of global investment in this sector for the quarter, up from 12% in the corresponding quarter of 2019, making it the second largest market after the US.

Canalys said spending for the full-year 2020 increased by 66% to US$19 billion, up from US$11.5 billion a year earlier.

“Remote learning and working, as well as gaming, streaming, ecommerce and other online services were key areas driving consumption of cloud infrastructure services in China throughout 2020,” said Canalys chief analyst Matthew Ball.

“Cloud service providers also played a pivotal role in developing digital services to support organisations in overcoming challenges caused by the COVID-19 pandemic, and these relationships will lead to larger transformation projects.

china cloud q4 2020

"In the coming year, consumption of cloud services will maintain robust growth, driven by continued expansion of online services and digitisation of processes and operations within enterprises and government organisations.”

Alibaba Cloud cornered 40% of the market, with Huawei Cloud (17%), Tencent Cloud (15%) and Baidu Cloud (8%) following in that order.

“Customers are requiring more advanced solutions from cloud service providers to meet data security requirements and other industry-specific needs," commented Canalys research analyst Blake Murray.

"The pace of innovation is accelerating in China as customers become more integrated and dependent on cloud-based services, particularly for AI and data processing.

"This is accelerating the development of data centre capacity, connectivity and data services. This year will bring a growing opportunity for cloud service providers to demonstrate value across specific industries and across specific complexities of hybrid-cloud and cloud-native deployments.

"Demonstrating value will remain critical to building trust between customers and cloud service providers while innovation will drive the competitive edge between providers.”

Canalys defines cloud infrastructure services as those that provide infrastructure as a service and platform as a service, either on dedicated hosted private infrastructure or shared infrastructure. This means software as a service expenditure directly is excluded, but it includes revenue generated from the infrastructure services being used to host and operate them.

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Sam Varghese

Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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