Amazon unit eyeing bigger piece of burgeoning cloud services industry in China

Amazon Web Services, the cloud service platform of US-based technology giant Amazon, will increase its investment in the burgeoning cloud computing market in China and accelerate its steps to offer more cloud services in a bid to promote the digital transformation and upgrading of Chinese enterprises.

The market size of China's cloud computing industry is huge, but the segment is still in its infancy, said Gu Fan, general manager of product management and go-to-market strategy at AWS China, adding that he has great confidence in the country's cloud services market.

"We have seen that some Chinese internet companies and fast-growing startups engaged in healthcare, education and media have increasing demands for cloud services. AWS is committed to helping Chinese enterprises digitize and innovate their operations, as well as accelerate the transformation of traditional businesses," Gu said.

He added that a growing group of domestic enterprises use the global infrastructure and cloud services of AWS to empower their globalization push and make them more agile with lower costs.

Gu said AWS will speed up the establishment of more cloud services in China so as to cater to demand from Chinese customers and provide tailor-made solutions for the Chinese market. It launched more than 150 cloud computing services and features in the country in the first half.

Moreover, the company will help multinationals tap into the Chinese market.

"It is noteworthy that during the COVID-19 pandemic, online conferencing, telecommuting and drug research and development boosted the business growth of AWS, driving more enterprises to have access to cloud services and go digital," Gu added.

The China Academy of Information and Communications Technology said the public cloud services market in China reached 68.9 billion yuan ($10.5 billion) in 2019, up 57.6 percent from 2018. It is expected that the market will grow rapidly over the next three years and reach 230.7 billion yuan by 2023.

China is one of AWS' largest business geographies. It set up AWS China (Beijing) Region, operated by Beijing Sinnet Technology Co Ltd, in 2016, and AWS China (Ningxia) Region, operated by Ningxia Western Cloud Data Technology Co Ltd, in 2017.

AWS now offers over 175 fully featured services such as computing, storage, databases, networking, analytics, robotics, machine learning and artificial intelligence from 77 availability zones within 24 geographic regions around the world.

"AWS is setting an aggressive pace in the global market for cloud innovation and global expansion. In China it has also been accelerating its investment in the region. This is effectively enabling enterprise builders in China to power adaptive enterprises on a massive scale," said Charlie Dai, a principal analyst at Forrester, a business strategy and economic consultancy.

It also demonstrates that prioritizing localization strategy is critical for both enterprises and vendors targeting the China market to survive uncertainties, Dai said.

Favorable policies on cloud computing also promoted the sector's rapid development in the country. The Ministry of Industry and Information Technology issued a guideline in 2018 proposing that by 2020, cloud computing will be widely used in the production, operation and management of enterprises, and there will be 1 million more enterprises using cloud computing in China.

Global cloud infrastructure services spending in the third quarter of this year continued to benefit from the fallout of the COVID-19 pandemic. The worldwide cloud market grew 33 percent to $36.5 billion, which was $2 billion higher than that of the previous quarter, according to research firm Canalys.

The consultancy said China is the world's second-largest market for cloud infrastructure services. Alibaba Cloud, the cloud computing arm of Alibaba Group, accounted for 46.4 percent of China's cloud computing market last year, followed by Tencent Cloud (18 percent) and Baidu Cloud (8.8 percent).