China Cloud Computing Market | Analysis 2019-2031

CHINA CLOUD COMPUTING INDUSTRY SNAPSHOT

• The China cloud computing market is forecasted to reach US$ 69.68 billion in revenue by 2023, with an expected Compound Annual Growth Rate (CAGR) of 14.65% from 2023 to 2031.
• In China, the leading segment by type is projected to be Software as a Service (SaaS), with a market value of US$ 134.25 billion by 2031.
• By end user, 34.94% of the total market size in the Chinese cloud computing market is expected to be contributed by IT and Telecom end user by 2031.
• Throughout the forecast period, the Education sector is expected to experience the most rapid expansion in terms of revenue generation, with a 15.85% Compound Annual Growth Rate (CAGR).

CHINA CLOUD COMPUTING INDUSTRY SCENARIO, TRENDS, AND DEVELOPMENTS

China has made remarkable progress in its transition to cloud computing, establishing itself as the world's second-largest market in this domain, trailing only behind the United States. Further, it is likely to experience tremendous demand across all the industry verticals with public sector, manufacturing, retail, and healthcare sectors among major adopters of cloud computing services. Also, fast pace deployment of 5G mobile network across China is anticipated to support further penetration of cloud computing services among end user organizations. This is anticipated to fuel growth of the China cloud computing market growth throughout the forecast period. In recent past China has emerged as one of leading market for Internet of things, artificial intelligence, virtual reality, and online and mobile payments. To support these emerging technology trends China is investing huge amount to scale up its IT infrastructure and technological expertise. This, in turn, is expected to create opportunity windows for cloud computing service providers both global and local players operating in the China cloud computing market.
 

However, China’s strict regulatory environment act as one of the biggest entry barriers for international brands especially from United States. As per the Chinese government mandate foreign cloud vendors are required to enter into partnership with domestic cloud service providers. This is posing major challenge for key international players to establish themselves in China cloud computing industry to certain extent. Further, the country has strict regulations regarding data sovereignty, security, and censorship, which is acting as a barrier for foreign players enter the market, thereby hampering growth of the China cloud computing market. Nevertheless, rising concern regarding business growth, increasing IT efficiency, and high service availability and resilience are the key factors stimulating cloud computing adoption in the country. Below are a few major developments observed in the Chinese cloud computing industry.
 

• Recently, US announced to restrict China’s access to cloud computing services utilized to train various artificial intelligence (AI) models as that may threaten national security. As per the new regulation new cloud computing service providers operating in the US are required to verify the identities for foreign companies accessing their IT infrastructure and datacenters. As geopolitical tensions continue to shape the global tech landscape, stakeholders are emphasized on being vigilant and proactive in addressing emerging security threats and regulatory challenges.
   
• In February 2024, SoftwareOne Holding AG, announced plants to acquire Medalsoft, a China-based cloud application solutions provider. This strategic acquisition aligns with SoftwareOne's expansion strategy in the Asia Pacific region, enhancing its portfolio and delivery capabilities. This acquisition will help SoftwareOne to better cater to multinational clients using the Microsoft Cloud.
   
• In November 2023, China approved US chipmaker Broadcom Inc acquisition of VMware (offering cloud services) worth US$ 61 billion with restrictive conditions according to China's Anti-Monopoly Law. This acquisition is said to be the biggest technology deals ever in the country. Such developments are projected to stimulate China cloud computing market expansion in coming years.

CHINA CLOUD COMPUTING MARKET COMPETITIVE LANDSCAPE

Prominent local players offering cloud services in China cloud computing market are Alibaba Cloud, China Mobile International, Meituan Open Services, China Telecom Corp., Ltd., Tencent Cloud, ZTE Corporation, and Baidu Cloud. Major vendors offering public and hybrid cloud services are investing substantial amount on developing solutions to enhance cloud security ecosystem to attract enterprises that are highly concerned for data security. Well established international brands operating in China cloud computing market are IBM Corporation, Amazon Web Services, Inc., Microsoft Corporation, Oracle Corporation, and SAP SE. These players are focused towards entering into strategic partnership and joint ventures with local cloud vendors to win long term government contracts. However, domestic cloud providers such as Alibaba Cloud and Tencent Cloud have been experiencing rapid growth and are continuously posing challenge to international players like AWS and Microsoft Azure in the Chinese cloud computing market. These companies benefit from strong government support and a deep understanding of local business dynamics.

CHINA CLOUD COMPUTING MARKET COVERAGE