Spending on cloud infrastructure services in China reached a record $4.3 billion in the second quarter, up 70 percent year-on-year, according to a report from market research firm Canalys.
China retained its position as the world's second-largest market in the second quarter, accounting for 12.4 percent of global spending, up from 9.6 percent in the second quarter of 2019, the report said.
The use of cloud services is growing, thanks to digital transformation projects and accelerated consumer use of online services.
China's hot stock market raises demand for cloud services from brokers
In the second quarter of 2020, the four largest vendors together accounted for 78.7 percent of total spending.
After another quarter of strong growth, Aliyun (Alibaba Cloud) maintained its dominant share of 40.1 percent. Huawei Cloud and Tencent Cloud were the closest challengers in terms of strength, holding 15.5 percent and 15.1 percent share, respectively. Baidu Intelligent Cloud is the fourth largest cloud service provider in China, accounting for 8.0% of total spending.
A major push into cloud computing is a key part of China's new infrastructure plan.
Building new, more advanced data centers and developing an artificial intelligence (AI) plan are two priorities that will require the efforts of China's cloud service provider giants: Aliyun, Huawei Cloud, Tencent Cloud, and Baidu Intelligent Cloud.
The Chinese government had initiated stimulus measures before the Covid-19 pandemic but accelerated its digital transformation in May 2020.
Aliyun has announced the construction of three new data centers in Nantong, Hangzhou, and Ulanqab, which will add more than 1 million servers in total. This is part of the company's ambitious growth strategy, which includes building 10 new data centers of similar size in the future.
Alibaba Cloud completes three new super data centers, will add over a million servers
Huawei Cloud continues to expand its footprint in the Chinese market, adding several new availability zones. Huawei Cloud continues to grow strongly with the support of its DevOps and industry-centric platforms, as well as government contracts.
Internet companies and municipal services are experiencing higher demand for Tencent Cloud public cloud services, offsetting the declining trend of project deployments that have been continually delayed due to the New Crown outbreak.
Tencent also claimed strong growth in its online gaming division due to increased demand during the blockade.
Baidu's Intelligent Cloud continues to fuel digital transformation as Baidu AI is in high demand among developers using its open AI platform and customers using its AI PaaS.
The Chinese cloud infrastructure services market is set to gain momentum. Multiple factors are coming together to drive further growth in an otherwise developing market: government programs, commitment from cloud service providers, and the growing demand for digital transformation and online services in a post-New Crown epidemic economy, Canalys analyst Blake Murray said.
Baidu tops share of China's AI cloud services market in 2019, IDC says
More on Tech Industry
