Canalys published a report about cloud infrastructure services spend in China. Cloud infrastructure services spend in China grew 65% in Q3 2020 to exceed US$5 billion for the first time. Total expenditure was over US$750 million higher than in the last quarter and nearly US$2 billion more than in Q3 2019 according to the latest Canalys data.
Alibaba Cloud remained the leader in Q3
China is the world’s second-largest market, accounting for 14% of global investment. The top four vendors collectively accounted for 80% of the total spending in Q3 2020. Alibaba Cloud remained the leader in the China Cloud services market in Q3 with a 41 percent market share. Huawei Cloud and Tencent Cloud both saw growth, each taking a 16% share. Baidu AI Cloud was the fourth-largest cloud service provider, accounting for 7% of total spending in the country.
Canalys Chief Analyst Matthew Ball said,
“Demand for cloud-based services reached new heights in China, as organizations reprioritized IT spending and accelerated digital transformation projects. Remote learning and working, as well as gaming, streaming, eCommerce 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.”
The Chinese cloud service providers have reacted quickly to the pandemic and subsequent lockdown at the start of the year. However, contracts were restructured, especially in hard-hit sectors such as hospitality and transportation. Cloud service providers are now focusing on the needs of specific industries.
While Alibaba Cloud reported strong growth in finance and retail, Huawei Cloud has seen rapid growth in the finance, industrial manufacturing, Internet and government sectors. Tencent Cloud saw rising demand for its PaaS solution. Baidu AI Cloud was boosted by growth in the transportation, healthcare and financial sectors.
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