Canalys: China’s Expenditure on Cloud Services Reached $6 billion in the First Quarter of 2021

(Source: Nutanix)

According to data made available by Canalys on June 23, the expenditure on cloud infrastructure services in the Chinese market grew by 55% in the first quarter of 2021, reaching $6 billion. As the Chinese government has made cloud computing its top strategic priority, it has promoted the development of cloud infrastructure services, with the Chinese market growing faster than the rest of the world.

China is the second largest market after the United States, accounting for 14% of global investment, higher than 12% in the first quarter of 2020. The country’s four major cloud service providers are Alibaba Cloud, Huawei Cloud, Tencent Cloud and Baidu AI Cloud, which together account for more than 80% of the total expenditure.

Canalys pointed out that Alibaba Cloud led the market with a 40% share, but its growth slowed to 38% in the first quarter. This is due to the termination of the contract by a major customer to comply with data ownership requirements outside China. Alibaba Cloud is also under strict scrutiny from China’s State Administration for Market Regulation, which led to a fine in April for violating anti-monopoly laws.

Huawei Cloud achieved the biggest increase in the quarter, surging 116% and accounting for 20% of the market share. Its rapid growth benefits from Internet customers and government projects, as well as major victories in the automotive industry. Huawei is currently building its largest data center facility in the Guian New Area, Guizhou province, to provide services for Southwest China.

Tencent ranks third with a 14% share. Baidu AI Cloud is the fourth largest cloud service provider, accounting for 7% of the total expenditure in the first quarter of 2021.

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Cloud computing has been growing rapidly for many years, as more and more companies seek to work remotely, improve efficiency through automation and save money on IT infrastructure. According to a 2021 Gartner report, it is estimated that the global end-user expenditure on public cloud services will increase by 23.1% to $332.3 billion in 2021 from $270 billion in 2020.

According to Gartner, Google occupied 5% of the cloud infrastructure market in 2019, while Amazon had 45% and Microsoft had about 18%.

“Companies can use these services without purchasing or installing physical infrastructure. They can get exactly what they need when they need it, and expand or reduce services as demand changes,” said Dr. Scott Overmyer, Associate Dean of Information Technology at Southern New Hampshire University.