China's cloud service spending to grow 12% in 2023
Views：26004Published：2023/03/21
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Compared with the strong performance of the past few years, the growth rate in 2022 has dropped significantly (annual growth rate of more than 30% in the previous three years). The impact of the pandemic and its restrictions cannot be ignored - businesses are showing less enthusiasm for cloud adoption and more focus on the operational cost benefits cloud computing brings. Customers who have migrated to the cloud are starting to focus on platforms and software services.
As restrictions are lifted, the negative impact on businesses is winding down and demand for cloud computing is poised to return. But a certain level of caution around IT budgets will make it difficult for cloud computing growth to return to its peak. In 2023, Canalys expects spending on cloud infrastructure services in China to grow by 12% for the full year.
In 2022, the top four cloud computing vendors in mainland China, Alibaba Cloud, Huawei Cloud, Tencent Cloud and Baidu Smart Cloud, will increase by 9% in total, accounting for 79% of total cloud service customer spending. Carrier companies led by China Telecom are trying to seize market share by launching their own cloud services, resulting in a very slight decline in the market share of the top four cloud computing vendors. The competitive pressure brought to the top four manufacturers will be further reflected, especially in the government and public sectors, because this part is where the operators' competitive advantages lie. Although the carrier cloud is gaining momentum in its infancy, there are still gaps in the provision of platforms and software capabilities. They need to bridge this segment of the gap before they can become a strong player in the cloud infrastructure services market.
In 2022, PaaS (Platform-as-a-Service) will account for 23% of the entire Chinese cloud service market. "Enterprise customers' requirements for cloud services have become more complex, and many customers require customization, and the focus has shifted from simply providing cloud infrastructure to providing comprehensive cloud platforms and software capabilities," said Canalys research analyst Yi Zhang. "The share of PaaS is expected to increase in 2023 as China's leading cloud vendors announce investment in recruiting vertical-focused partners to provide customers with PaaS solutions."
Alibaba Cloud remains No. 1 in 2022, accounting for 36% of total customer spending on cloud infrastructure services after a 7% year-over-year increase. Alibaba Cloud has had a tough year, with growth rates declining quarter-over-quarter after a strong 2021. However, shrinking revenue from internet-based customers (which is Alibaba Cloud's strongest business unit) is expected to decrease in 2023. Cloud demand from internet-based customers will rebound as the economy stabilizes after pandemic restrictions are lifted. After overcoming the security crisis, Alibaba Cloud is actively seeking customer expansion opportunities in the government and public affairs fields. Alibaba Cloud is making steady progress in its overseas expansion, announcing the opening of a third data center in Japan this quarter. Looking across 2022, it launched six new data centers in Asia Pacific, the Middle East and Europe, spanning three continents.
Huawei Cloud ranked second with a 19% market share and grew 13% annually, ahead of the overall market growth. In 2022, HUAWEI CLOUD has achieved considerable returns from its investment and construction of the channel ecosystem, with revenue from partners increasing by 55%. It announced that it will upgrade its partner program to provide partners with more attractive benefits in terms of partner incentives, but the specific content of the upgraded partner program remains to be seen. In addition, benefiting from its strategy of helping Chinese companies expand overseas, HUAWEI CLOUD's revenue growth in overseas regions this year has been impressive. It plans to open new data centers in Turkey, Saudi Arabia, the Philippines, Egypt and other regions in 2023.
Tencent Cloud ranked third with a market share of 16%. Tencent Cloud continued to be affected by internal business restructuring this year, and revenue growth slowed down. However, following its profit-focused strategy, it has turned its attention to developing platform and software service capabilities, and it will rank second in the PaaS market in 2022, behind Alibaba Cloud. In addition, it launched a new audio and video brand Media Services in 2022, covering 400 one-stop audio and video media services. Tencent Cloud is determined to become a competitive and differentiated advantage based on its media service experience. Tencent Cloud has recently expanded its product portfolio, including the launch of "Metaverse-in-a-Box" to accelerate enterprises' journey into the "Metaverse".
Baidu Smart Cloud will account for 9% of China's cloud computing market in 2022 and grow 11% year-on-year. Baidu Smart Cloud restructured its cloud business in the fourth quarter and proactively shed low-efficiency projects, which will have an impact on its growth rate in the short term. Baidu has been following a strategy of combining artificial intelligence and cloud services. With the launch of ChatGPT making waves, Baidu launched a local version of the ChatGPT model in March 2023. In the future, Baidu Smart Cloud is likely to use this as a unique value proposition to attract enterprises to join Baidu Smart Cloud, similar to Microsoft's integration of OpenAI.
Cloud Infrastructure Services
Canalys defines cloud infrastructure services as providing Infrastructure as a Service (IaaS) and Platform as a Service (PaaS) on dedicated hosted private infrastructure or shared public infrastructure. This does not include direct software-as-a-service spending, but includes revenue generated from providing infrastructure services to host and operate the software.
Reposted from: International Electronic Commerce, automatically translated by Google
