Alibaba maintains leads in China’s hot cloud computing market as Tencent and Baidu play catch-up
- Tencent Cloud ranked second with a share of 17.4 per cent and Baidu was fourth with 8.7 per cent
China’s cloud infrastructure services market grew rapidly in the second quarter of 2019, with total spending up 58 per cent year-on-year at US$2.3 billion. Alibaba remains the clear leader, with a 43 per cent market share. Tencent Cloud ranked second with a share of 17.4 per cent and Baidu was fourth with 8.7 per cent, although both firms showed strong growth.
“Competition in China has intensified, mainly due to local cloud service providers, including Alibaba Cloud, Tencent Cloud and Baidu Cloud,” said Daniel Liu, a research analyst at Canalys, last week. “Boosting revenue from cloud services is a top strategic priority for these companies amid growing domestic demand.”
Alibaba’s cloud computing business saw revenue grow 66 per cent to 7.8 billion yuan (US$1.1 billion) last quarter, primarily driven by an increase in average revenue per customer.
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Cloud computing enables companies to buy, sell, lease or distribute over the internet a range of software and other digital resources as an on-demand service, just like electricity from a power grid
These resources are then managed inside data centres. Cloud services form part of China’s drive to upgrade its economy and embrace a wide swathe of new technologies such as AI, internet of things (IoT) devices and big data analysis.
Meanwhile, the introduction of next generation 5G mobile networks will open up a whole new world of internet connectivity, speed and capacity. China’s “Internet Plus” strategy introduced in March 2015, seeks to integrate the mobile internet, cloud computing, big data and IoT applications to modernise industries and manufacturing.
China has the biggest internet population in the world with around 829 million users – generating a huge amount of data that needs to be stored securely and analysed for insights in a cost-effective manner – hence the need for greater cloud capacity and services.
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To be sure, China’s US$2.3 billion market size is still relatively small compared with the US$26.3 billion global market that is dominated by Amazon Web Services, Microsoft Azure and Google Cloud. Alibaba ranks fourth in the global market with a 4.6 per cent share in the second quarter of 2019, according to another report by Canalys.
Alibaba owns the South China Morning Post.
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