Spending on Cloud infrastructure services in China increased 55 percent to $6 billion during the first quarter of 2021, the latest Canalys research indicated.
Total expenditure on Cloud infrastructure services increased $2.1 billion compared with Q1 2020 and over $200 million on the previous quarter.
China was the second largest market after the US, accounting for 14 percent of global investment, up from 12 percent in Q1 2020.
The top four cloud service providers are Alibaba Cloud, Huawei Cloud, Tencent Cloud and Baidu AI Cloud, which together accounted for over 80 percent of total expenditure.
“Digital services, including everything from digital payments and content to customer and social engagement and remote learning, are key drivers behind the demand for cloud infrastructure services in China,” said Canalys Analyst Blake Murray.
Alibaba Cloud led the market with a 40 percent share, though its growth slowed to 38 percent in the quarter. This is the result of a large customer terminating its contract to adhere to data sovereignty requirements outside of China.
Huawei Cloud made the most gains during the quarter, growing 116 percent to take a 20 percent market share. It grew strongly thanks to Internet customers and government projects, as well as key wins in the automotive sector. Huawei Cloud is currently building its largest data center facility in Gui’an to provide services in Southwest China.
Tencent was third with a 14 percent share. Tencent has expanded its presence in industry verticals such as healthcare, retail, education and transportation. It also increased its focus on enterprise opportunities by establishing a SaaS ecosystem program and launching the Enterprise App Connector to simplify management of multiple SaaS products.
Baidu AI Cloud was the fourth largest cloud service provider, accounting for 7 percent of total spend in Q1 2021. Baidu had success with large financial service customers, and also grew in the government, enterprise, Internet, transportation and healthcare sectors.