Will 5G become a new springboard for domestic cloud computing giants to surpass international giants?

As an important member of the new infrastructure foundation, cloud computing has attracted much attention and has become one of the key tracks for major giants to seize the second half of the Internet from To C to To B.

The highly anticipated cloud computing has performed even better during the epidemic. A large number of users have flocked to online conference and online office software, such as DingTalk and WeChat for Enterprise, and some even crashed due to overload. In the latest financial report, Alibaba Cloud's revenue exceeded 40 billion yuan, bringing its valuation to 77 billion US dollars.

The promising future of the cloud computing market has attracted countless players to enter the market. However, just like artificial intelligence, cloud computing has also seen the fall of players one after another. The news that Meituan Cloud and Suning Cloud have successively announced the suspension of operations is also intelligence that cannot be ignored in the fierce battlefield of cloud computing.

5G becomes a new driving force for cloud computing

The unlimited potential of cloud computing is becoming the next growth point that Internet giants are eager for.

According to Gartner data, the global cloud computing market size reached US$64 billion in 2018 and is expected to increase to US$246.1 billion by the end of 2020, with a compound annual growth rate of 18% between 2019 and 2023.

The scale of the domestic cloud computing market is also expanding. Data from the "Cloud Computing Development White Paper (2019)" released by the China Academy of Information and Communications Technology shows that the scale of my country's cloud computing market reached 96.28 billion yuan in 2018, with a growth rate of 39.2%. It is expected to increase to 117.2 billion yuan in 2022.

The scale of the cloud computing market is in an expansion stage both at home and abroad. Moreover, with the emergence of 5G technology, which complements cloud computing, going to the cloud has become faster and more convenient.

The emergence of 5G technology has greatly helped cloud computing to continue to advance. The three characteristics of 5G technology, ultra-large bandwidth, ultra-large-scale connection, and ultra-low latency, have made a leap forward in network speed, and the Internet of Everything has entered a new stage. The huge amount of data behind this requires the support of cloud computing's super computing and storage capabilities. In order for enterprises to use this capability, cloud computing has become an indispensable member.

With the support of 5G technology, the reliability and efficiency of cloud computing will be improved to a certain extent. When hardware technology is limited, installing software on the cloud will even be more convenient than installing it locally.

Under the influence of the black swan of the epidemic, cloud computing has become a rigid demand. Whether in daily life or office, cloud computing is indispensable for the public to maintain a normal life.

According to Tianyancha data, on February 3, the first day of resumption of work, nearly 200 million people used remote office software, and 4,500 companies used cloud office. With so many users pouring in, DingTalk directly expanded the capacity of 20,000 cloud servers within two days, and Kingsoft Office even enabled Kingsoft Cloud's cloud hosts as support.

Under such circumstances, the battle in the cloud computing field has become more intense, with many players stepping into the cloud to seek new possibilities.

Alibaba Cloud and Tencent Cloud subsequently rose

Some players who were lured into the market by the huge size of cloud computing have thrived, while others have left in disgrace.

Some people say that Alibaba Cloud is the lifelong pride of Jack Ma and Wang Jian.

In 2009, when cloud computing was still a concept, Alibaba insisted on investing in cloud computing despite opposition from many. Today, Alibaba Cloud has become a heavyweight player in cloud computing.

In the China public cloud service market report for the third quarter of 2019 released by British research organization Canalys, Alibaba Cloud ranked first with a market share of 45%, Tencent Cloud had a market share of 18.6%, AWS had a market share of 8.6%, and Baidu Cloud had a share of 8.2%.

In 2013, Alibaba Cloud launched the "Feitian system" that controls 5,000 servers, and later jointly established a research laboratory with the Chinese Academy of Sciences to study quantum computers. In 2017, Alibaba Cloud entered the AI ​​industry and launched the ET Brain for urban management and industrial optimization.

In Alibaba's 2020 fiscal year results, Alibaba Cloud's revenue exceeded 40 billion. Such strong performance has caused Alibaba Cloud's valuation to soar to 77 billion US dollars.

However, Alibaba Cloud, which is currently leading, cannot rest on its laurels. Alibaba Cloud's success has prompted many players to step up their steps into the cloud, and other cloud players are also performing well. Alibaba Cloud is still a label that cannot be removed from it. If Alibaba Cloud wants to continue to maintain its advantage, it needs to make more efforts.

Tencent Cloud, founded in 2013, has achieved astonishing growth and successfully landed in multiple scenarios by relying on Tencent's huge natural traffic pool in social and gaming fields.

Official information shows that Tencent Cloud's revenue grew by more than 100% to 9.1 billion yuan in fiscal year 2018. In 2019, Tencent Cloud's annual revenue exceeded 17 billion yuan, with a growth rate of 87%, accounting for 17% of its financial technology and enterprise service business revenue.

While the competition in the domestic cloud computing battlefield is fierce, the global cloud computing battlefield is even more intense. And compared with the United States, the world's largest cloud market, the domestic cloud computing market still has a lot to be explored.

Revenue gap

Although domestic cloud players are competing fiercely, it is undeniable that there is still a big gap compared with Amazon and Microsoft.

According to Canalys data, China's cloud infrastructure spending grew 63.7% to 10.7 billion yuan, making it the world's second largest cloud market with a market share of 10.8%. However, IDC data also shows that there is still a large gap between the domestic public cloud computing market and the larger US public cloud market. In 2019, US cloud computing spending reached $124 billion, ten times that of the Chinese market.

Market research firm Gartner released cloud computing market data for 2019 in April, showing that Amazon ranked first with a global cloud computing market share of 45.0%, Microsoft ranked second with a market share of 17.9%, and Alibaba Cloud ranked third with a market share of 9.1%.

In terms of revenue, Amazon and Microsoft's performance in cloud computing is even stronger.

Amazon's latest financial report shows that its cloud computing platform AWS's revenue reached $10.2 billion, a year-on-year increase of 33%; operating profit was $3.08 billion, an increase of 38.3%. At the same time, Amazon also stated that AWS's annualized revenue may exceed $40 billion, and its partners include 3M and Zoom.

Microsoft said that its intelligent cloud business segment had revenue of US$12.28 billion, an increase of 27.2%. Due to the overseas epidemic, sales of Microsoft's cloud business Azure increased by 59%.

Compared with these strong competitors, domestic cloud players, for whom losses are still the main theme, still have a longer way to go.