Connect with us

Hi, what are you looking for?

Tech & Innovation

Turbulent Times Ahead For China’s Private Cloud Giants

The market for cloud infrastructure services will triple in size by 2025, making, AliCloud, one of Alibaba’s most promising ventures.

Turbulent Times Ahead For China’s Private Cloud Giants

Beijing’s phobia dooms the private cloud sector in China. Alibaba, Tencent, and others are trying to copy Amazon’s success in China. But the government’s attitude toward data is alarming.

In the early days, Alibaba and Tencent dominated the market with a combined market share of almost 50%. Alibaba’s cloud division generated $3 billion in revenue in the December quarter or 8% of overall revenue.

According to Canalys, the market for cloud infrastructure services will triple in size by 2025, making, AliCloud, one of Alibaba’s most promising ventures. Analysts at Citi believe AliCloud is worth $60 billion, more than a quarter of the company’s principal commerce division’s projected value.

But a storm looms. Refinitiv’s forecast for AliCloud revenue growth is 29%, down from 50% in 2021. Kingsoft Cloud (0700. HK), one of the few standalone Chinese providers listed on public exchanges, has lost nearly 80% of its market value. Sichuan and Tianjin, for example, required state-owned enterprises to move to a government-owned private cloud.

Officials have also investigated corporations like Didi Global and set new restrictions on data security and user privacy (DIDI.N). The troubled ride-hailing business reportedly gave up data ownership to a state-owned company to appease regulators.

Moreover, industrial, financial, and government customers increasingly drive cloud computing demand, benefiting those directly involved. According to Canalys, Huawei boosted its cloud share to 18% last year, while Alibaba’s dropped to 37%. China Telecom (0728. HK), the country’s largest fixed-line operator, is also competing for action. Those expecting China’s Amazon Web Services may be disappointed.

Click to comment

Leave a Reply

Your email address will not be published.