Analysis of the current status of cloud computing industry development, challenges faced by operators in their layout

Domestic operators are making great efforts to layout the cloud computing market

Domestic operators have been making great efforts to develop the cloud computing market, striving to build their own territory in the cloud field. However, with the continuous investment of Internet and traditional IT companies in the field of cloud computing, the competition in the domestic cloud computing market is becoming more and more fierce. Facing the upcoming 5G era and the nearly trillion cloud computing market, how to position cloud computing has become the current focus of domestic telecom operators.

The current status of domestic telecom operators in China's cloud computing market

With the rapid growth of cloud computing business and the development of the data center market, my country's cloud computing industry has experienced vigorous growth in the past few years, and the ecosystem has prospered rapidly. According to the statistical data of the "Cloud Computing Industry Development Prospects and Investment Strategy Planning Analysis Report" released by the Prospective Industry Research Institute, the scale of China's cloud computing market was close to 70 billion yuan in 2017, with an annual growth rate of 28%. It is expected that by 2020, the scale of China's cloud computing market will exceed 130 billion yuan. As early participants in the field of cloud computing, the three major domestic operators are currently facing more intense market competition and service challenges.

Statistics and forecasts of China's cloud computing market size from 2013 to 2020

Telecom operators’ share of the domestic public cloud market continues to decline

Judging from the IaaS revenue, which currently accounts for the largest share of the domestic cloud computing market, AWS and Tencent Cloud grew faster in China's public cloud IaaS growth rate in 2017, reaching 152.33% and 136.76%. Due to the large base, although the growth rate of Alibaba Cloud is lower than 100%, its market share is still considerable. However, the public cloud IaaS market share of telecom operators has dropped from 20.7% in 2015 to less than 15% at present. With the gradual saturation of the IaaS market, the continuous optimization of the industrial structure, and the increasing demand for PaaS and SaaS markets, considering the disadvantages of operators in the upper-level cloud service field, they will face more severe challenges in the future.

Telecom operators still have a competitive advantage in the domestic private cloud market

Domestic telecom operators have made great achievements in private cloud projects by leveraging their natural advantages in cloud network infrastructure and government industry resources, and benefiting from the active market of government cloud, medical cloud, financial cloud and other industry cloud in the past two years. In the 2018 private cloud enterprise rankings TOP50, the three major domestic operators China Telecom, China Unicom and China Mobile are all in the top 10. At the same time, it should be noted that traditional software and hardware equipment providers represented by Huawei, H3C, Inspur and others are still in the leading position, and public cloud service providers represented by Alibaba and Tencent have also begun to enter the private cloud field. Competition in the domestic private cloud market will intensify in the future.

5G drives the upgrade of cloud computing industry, and telecom operators face new challenges

In June 2018, with the approval of the 5GNR independent networking function standard by the 3GPP plenary meeting, the first subset of the 5G standard R15 was officially born, a series of new 5G second-phase projects were approved, and 3GPP Release16 was also accelerated. At the same time, domestic operators also revealed the 5G timetable: it is planned to realize the official commercial use of 5G networks by 2020, and the 5G era is coming. 3GPP defines three major application scenarios for 5G, namely eMBB (enhanced mobile broadband), mMTC (massive machine-type communications) and uRLLC (ultra-reliable low-latency communications). It is foreseeable that the emergence of new networks and innovative services will inevitably promote the further upgrading of the current cloud computing industry.

Telecom operators need to take a multi-pronged approach to cloud computing in the 5G era

Facing the 5G era, telecom operators' cloudification path needs to be comprehensively upgraded in four aspects: network architecture, infrastructure, business services, and operating models. While meeting the network requirements of future converged application scenarios, they must increase innovation investment in capability platforms and cloud services based on open network capabilities, and accelerate the launch of cloud services for vertical industries to adapt to the upcoming digital economy era.

The 5G era is approaching, and cloud computing will usher in a new round of explosion. For telecom operators, opportunities and challenges coexist. If they want to occupy a place in the domestic cloud computing field, while insisting on innovation-driven development, they must also accurately grasp market demand, seek diversified cooperation, and create a healthy ecological system, so as to achieve sustained growth in business revenue.