Canalys Shows China’s Cloud Infrastructure Market Has Hit $6.6 Billion, Baidu AI Cloud Sees Fastest Growth

cloud computing
(Source: VCG)

Global technology market analyst firm Canalys released the second quarter 2021 report for China’s cloud computing market on Monday, showing that the country’s cloud infrastructure market increased by 54% in the period to reach $6.6 billion.

The four cloud titans in China – namely Alibaba Cloud, Huawei Cloud, Tencent Cloud and Baidu AI Cloud – have successfully maintained their dominant position in the market with an overall growth rate of 56%, accounting for 80% of the total cloud spending. 

Among them, the second quarter growth rate of Baidu AI Cloud is not only higher than the growth rate of the whole market, but also higher than the overall growth rate of the four companies.

(Source: Canalys)

The report determined that these four leading cloud service providers still maintain strong growth in 2021, saying that “local demand remains high as digital transformation, artificial intelligence and smart industries all remain on corporate and government agendas.”

At present, the scale of the cloud computing industry is growing rapidly, and competition in the domestic market is becoming more and more fierce.

According to Baidu’s second quarter financial report, the revenue of Baidu AI Cloud in the period increased by 71% year-on-year. Its market share in the fields of industrial Internet, intelligent transportation and others all achieved further growth.

Specifically, in the field of industrial Internet, Baidu AI Cloud bagged the bid for a project worth 179 million yuan ($27.78 million) in Tongxiang, Zhejiang Province. The company will jointly build an industrial Internet platform for new materials and fashion industries with the local government to cultivate the world’s most advanced manufacturing industrial clusters.

In the field of infrastructure as a service (IaaS), Baidu AI Cloud provides private cloud solutions and other cloud applications to serve Geely, the largest private automobile group in China.

By June 2021, coverage of Apollo ACE smart transportation has grown to 20 cities in June 2021, up four folds from a year ago, based on contract amounts over 10 million yuan.

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Meanwhile, the other three cloud computing giants are also developing steadily.

A senior technician from a cloud vendor revealed to Chinese media outlet Caijing that Alibaba Cloud’s current growth rate of public cloud revenue is slowing down. Other businesses such as hybrid cloud and integrated business are becoming new growth drivers for the company.

The growth of Huawei Cloud has greatly benefited from the sales ability from Huawei’s Enterprise Business Group and its cooperation with government customers. However, an individual from Huawei Cloud told Caijing that the company is now focused on winning more digital enterprises rather than government customers this year.

Tencent Cloud is currently strengthening its construction of SaaS, and enticing customers to use Tencent Cloud through products such as WeChat, WeChat mini programs, Enterprise WeChat and Tencent Meeting.

Alex Smith, Vice President of Canalys, said in the report that “Chinese tech companies could always rely on their local market.” Leading cloud service providers in China, including Baidu AI Cloud, are expected to gain more growth in this market.