It is expected that China’s public cloud service will accelerate to catch up in 2019.
Release date:
2019-09-18

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IT industry network learned

 At present, cloud computing is one of the most certain technical trends in the computer industry. The global cloud computing market has gradually formed a relatively stable pattern, but the growth rate is still rapid. According to survey data, the global public cloud service market will grow by 17.3% from 2017 billion in 2018 to 206.2 billion. According to the survey data, the market penetration rate of cloud computing will exceed 10% for the first time in 2019, and will continue to increase by about 2 percentage points per year. By 2021, the number will jump to 15%. This means that cloud computing spending will further erode corporate non-cloud IT spending and increase its influence in the IT market.

  2017-202021 global public cloud market scale and forecast

  IT industry cloud service acceleration

  Source of data: public information

  2015-2021 cloud service expenditure as a percentage of total potential IT expenditure market and forecast

 IT industry cloud service acceleration

  Source of data: public information

  In terms of cloud business revenue, the world's leading cloud computing companies have seen substantial compound growth. Amazon cloud service revenue increased from $3.108 billion in fiscal year 2013 to $25.565 billion in fiscal year 2018, with a compound annual growth rate of 52.5%. Microsoft's cloud business rose from $1.3 billion in fiscal 2013 to $23.2 billion in fiscal year 2018, a compound annual growth rate of 78%. Cloud service revenues rose from $1.138 billion in fiscal year 2013 to $7.922 billion in fiscal year 2018, with a compound annual growth rate of 47.4%. SAP cloud services revenues rose from $961 million in fiscal year 2013 to $5.7 billion in fiscal year 2018, with a compound annual growth rate of 42.8%.

  The IaaS market is the fastest growing segment of the global cloud computing market and is expected to grow by 27.6% to $39.5 billion in 2019 and $31 billion in 2018. From the global IaaS market share, according to survey data, Amazon ranked first with 51.8% market share; followed by Microsoft with 13.3% market share; Alibaba's Ali cloud ranked third, Accounted for 4.6%; Google Cloud Cloud Services accounted for 3.3%; followed by IBM, accounting for 1.9%.

  The SaaS segment is mainly transformed from a model for selling products to a model for providing services, mainly including ERP, IM, CRM, HRM and other business areas. According to survey data, SaaS is still the largest component of the cloud market. Although the growth rate of the global SaaS market has slowed down, the growth rate is still considerable. It is expected that its revenue will increase by 17.8% in 2019 to reach 85.1 billion US dollars. In 2018, the market size was about 80 billion US dollars, an increase of 22% compared with 2017, and the growth rate fell by 5 percentage points.

  Global IaaS market share

  IT industry cloud service acceleration

  Source of data: public information

  Compared with the global cloud computing market, the domestic cloud computing market started relatively late and relatively small in scale, but the overall market scale grew rapidly. The cloud computing revenue growth rate and the cloud business revenue growth rate after the cloud transformation still showed a rapid upward trend. The cloud revenues of various cloud computing companies in China have seen a substantial compound growth. Alibaba Cloud's business revenue increased from 500 million in FY2011 to 24.7 billion in FY18, with a compound growth rate of 74.6%.

  According to the survey data, the overall market size of China's cloud computing in 2018 is expected to reach 90.71 billion yuan, a year-on-year increase of 31.1%. Among them, the public cloud market reached 38.25 billion yuan, a year-on-year increase of 44.4%; the private cloud market reached 52.46 billion yuan, an increase of 22.9%. The growth rate of the public cloud market is twice as large as that of the private cloud market. From the perspective of future forecasts, the growth rate of the public cloud market will gradually slow down, while the growth rate of the private cloud market has remained stable. It is expected that the market size and growth rate of public and private clouds will be closer after 2021.

  At present, in the public cloud market segment, the market share is similar to the international market. IaaS has become the fastest growing segment in the public cloud market. SaaS, which is directly targeted at enterprise users, still has a large market share. PaaS is relatively weak but has broad prospects. According to the survey data, Alibaba Cloud is the largest IaaS manufacturer in China with a market share of 49%. The second is Tencent Cloud, which has a market share of 11.8%. China Telecom ranked third, accounting for 8.7%. In fiscal year 2019 (2018.4-2019.3), Alibaba Cloud achieved revenue of 24.7 billion yuan, an increase of 84% year-on-year. In the overseas market, Alibaba Cloud's market share continues to grow. In 2018, Alibaba Cloud's share in the Asia-Pacific region was 19.6%, up 4.7 percentage points year-on-year, surpassing the share of AWS and Azure's share in the Asia-Pacific region, ranking first in the Asia-Pacific region.

  2018 China Public Cloud IaaS Market Share

 IT industry cloud service acceleration

  Source of data: public information

  In recent years, domestic public cloud enterprises have developed rapidly, mainly in the two major markets of IaaS and SaaS. In the early stage of IaaS development, IaaS needed to invest a lot of money in infrastructure such as servers and network bandwidth. With the rapid growth of the domestic public cloud market, capital expenditures such as Ali and Tencent continue to accelerate in the construction of domestic cloud infrastructure, and the IaaS market is developing rapidly. By the end of 2018, the domestic competition pattern was basically determined, and the growth rate of capital expenditure of various enterprises returned to rationality, and enterprise services were unlikely to explode. According to the survey data, the growth rate of infrastructure capital expenditure in the public cloud sector in China will be reduced to about 20% in 2019.

  China's public cloud IaaS market is still in a period of rapid development, and market expansion will continue to bring demand. On the one hand, with the implementation of 5G commercialization in China, network transmission speed and cloud computing capability will be further improved, making cloud computing a practical solution to solve platform differentiation and improve user perception. Google's new cloud game is based on high-speed network. By storing and running game software in the cloud, users only need monitors and input devices to experience games with higher hardware requirements. On the other hand, with the promotion of the cloud policy of enterprises, a large number of local industry IaaS service providers have entered the market, and the development trend of cloud computing industry has gradually moved toward cloud computing, big data and artificial intelligence. In order to continuously pursue the innovation of cloud computing technology and business, it is imperative to further improve the domestic IDC construction and the procurement of basic servers. Therefore, although the growth rate of IaaS has slowed down slightly in the short term, in the medium and long term, the IaaS market has expanded in size and demand is still strong.

  China's SaaS market has benefited from the continuous increase in the number of startups and the increase in the use rate of enterprise information products. It has now entered a stage of rapid development. According to the survey data, the size of China's SaaS market is expected to exceed 32.3 billion yuan in 2021, and the compound growth rate is expected to exceed 30% in 2017-2021. Compared with the IaaS market, China's SaaS market is highly fragmented, and there is no benchmarking company for unicorns in various segments. SaaS service types can be generally divided into business vertical type and industry vertical type. Business vertical services do not distinguish between the customer's industry and provide common services, including CRM, HRM, ERP, finance, collaboration, and OA. There are also areas such as APM/Customer Service. According to the survey data, in the past two years, CRM and HRM are subdivided areas with higher financing and larger scale, followed by areas such as fiscal and tax management, operation and maintenance, security, and data analysis. The industry's vertical SaaS has the highest level of attention in the retail e-commerce sector, serving the emerging fields of SaaS such as finance, sales, collaborative office, production, procurement segmentation and electronic signature and cloud video conferencing. According to the survey data, in the 2018, the five new industries accounted for 49.6% of the SAAS market share, and the user companies gathered in the five major industries of manufacturing, finance, e-commerce, Internet services and software development.

  China's business vertical SaaS financing in 2018

 IT industry cloud service acceleration

  Source of data: public information

  With the rapid development of the Internet industry and the large number of traditional enterprises on the cloud, cloud computing is gradually becoming a national development strategy. Although the size of China's cloud computing market is relatively small, the growth momentum is strong. At present, the global cloud service market is in a stage of rapid development. IaaS and SaaS services have broad development prospects as the main components of public cloud services. As far as the IaaS market is concerned, it has strong capital barriers and the industrial concentration effect is very obvious. At present, the IaaS market structure has taken initial shape, showing the monopoly of several giant companies, and the industry concentration has further increased. However, with the rapid development of the Internet and the expansion of the market, infrastructure demand is still strong, and continued investment in related facilities is beneficial to related infrastructure providers. As far as the SaaS market is concerned, the market structure is more dispersed.