Cloud infrastructure spend grew 65 percent in Q3 2020, passing $5bn for the first time, analyst firm Canalys claims.
Total expenditure was over $750 million higher than the previous quarter and nearly $2 billion more than in Q3 2019.
The leading cloud provider remained Alibaba Cloud, at 41 percent market share, followed by Huawei Cloud and Tencent Cloud with a joint 16 percent share. Baidu AI Cloud comes in at fourth, with seven percent share.
The Chinese cloud service providers reacted quickly to the Covid-19 pandemic and lockdown at the start of the year, Canalys said, but some deals were delayed or canceled, contracts were restructured, particularly in hard-hit sectors such as hospitality and transportation.
Each provider has begun to adjust their offerings to the needs of specific industries – Alibaba Cloud has seen strong growth in finance and retail; Huawei Cloud experienced “rapid growth” in the finance, industrial manufacturing, Internet and government sectors; Tencent Cloud’s PaaS solution saw rising growth; Baidu AI Cloud grew in the transportation, healthcare and financial sectors.
“Customer requirements are increasing, while the pace of innovation is accelerating in China. This makes the ongoing development of capacity and connectivity, as well as data services, including management and artificial intelligence, critical within a vertical-led model,” said Canalys research analyst Blake Murray.
“Building successful relationships with customers while economic stability is returning will pay off in larger and more focused digital transformation projects in the future. This will also lead to a combination of hybrid-cloud and cloud-native deployments, where value must be demonstrated to drive additional opportunities. As cloud infrastructure spend continues to grow rapidly in the coming year, provider competition will be decided by the health of customer and partner relationships.”
Source: datacenterdynamics.com
