Canalys, a research firm had announced that the Chinese cloud infrastructure market had risen 66.9% to $3.3 billion in the last quarter of 2019, just before the COVID-19 virus had hit the country. With a 10.8% share, China is the second-largest cloud infrastructure market in the world.
The Chinese market will be at a $13.2 billion run rate because of the quarter. Canalys pegged the US market at $14 billion at the same time period, with a 47% worldwide market share.
Alibaba is a leader in the market in China, with over 46% market share. Much like its rival Amazon, Alibaba also has a cloud arm, and takes over in China, the same way AWS does in the US.
With 18%, Tencent came in second, which is approximately equal to Microsoft Azure’s share in the US, while Baidu AI Cloud was in third place, with 8.8%, around the same as Google’s US market share.
“In terms of growth drivers for Q4, we have seen the ongoing demand for on-demand compute and storage accelerate throughout 2019, as private and public organizations embark on digital transformation projects and start building platforms and applications to develop new services,” Matthew Ball, Canalys analyst said, regarding the fourth quarter numbers which anticipated the crisis outbreak in China.
Gaming, healthcare, finance, transport and industry, were all large cloud customers. As a part of the smart city sector, he also mentioned the rise of facial recognition technology.
Ball believes that next year, there will be a large growth in the market regardless of the impact the virus has. “In addition to the continuation of digital projects once business returns to normality, we anticipate many businesses new to using cloud services during the crisis will continue to use and become paying customers,” he said. A variety of free options have been put up as an offer for businesses, during this time of crisis.
“The overall outcome of current events around the world will be that companies will assess their business continuity measures and make sure they can continue to operate if events are ever repeated,” he added.