IaaS success puts Chinese companies on cloud nine

Chinese cloud computing service providers posted high growth last year, according to an industry report from Gartner, a market research provider.

Alibaba Group Holding ranked as the world’s third-largest infrastructure-as-a-service, or IaaS, provider.

IaaS is a major form of cloud computing service that provides virtualized computing resources over the internet.

According to the report, Alibaba Cloud, a subsidiary of China’s e-commerce giant, saw its global market share increase to 9.5 percent last year from 9.1 percent in 2019.

Alibaba Cloud now trails only Amazon Web Services and Microsoft’s Azure, which accounted for 40.8 percent and 19.7 percent of the IaaS market worldwide, respectively, in 2020.

Following the fourth ranking Google Cloud, Chinese technology giant Huawei Technologies Co climbed to fifth position with a 4.2 percent market share. In 2019, Huawei Cloud ranked sixth.

IDC, another market research provider, said in a report the overall market size of China’s public cloud services may have reached $19.38 billion last year, up nearly 50 percent year-on-year, the highest growth rate worldwide.

“When the COVID-19 pandemic hit, there were a few initial hiccups but cloud ultimately delivered exactly what it was supposed to. It responded to increased demand and catered to customers’ preference for elastic, pay-as-you-go consumption models,” said Sid Nag, research vice-president at Gartner, another market research provider.

Gartner said in its report that the IaaS market is estimated to grow 40.7 percent in 2020 to $64.29 billion. It also forecast the worldwide public cloud services market will grow 6.3 percent in 2020 to $257.9 billion, up from $242.7 billion in 2019.

The Gartner report said the Chinese market is expected to grow by more than 60 percent in cloud services last year, making it one of the largest and fastest growing markets in the world.

Amid the pandemic, a group of the country’s cloud companies, including Alibaba Cloud, Huawei Cloud and Tencent Cloud are stepping up their offerings in the cloud services market, to help enable China’s digital transformation.

China’s digital economy includes cloud computing, and is a key focus in the country’s 14th Five-Year Plan (2021-25). It will be a period when China is expected to unleash the value of data and push forward the digital economy with the help of frontier technologies.

Hu Houkun, rotating chairman of Huawei, said the company’s cloud services grew by a significant 168 percent in 2020 year-on-year and were one of the fastest growth drivers in the company’s 2020 fiscal year that ended in March.