What did surprise me is having both government and transportation – two common late adopters of technology – included in this tier-2. This is especially true in China, where the advancement of fintech and neobanks is fast and pose serious competition. Having the financial sector in this category is not surprising, given that banks and financial institutions tend to be early adopters compared to large enterprises in other sectors. Successfully adopting these types of technologies is a good indicator of becoming more “cloud native”. This tier-2 can be roughly understood as sectors that are not on the bleeding-edge per se, but are mature enough in their cloud migration to be comfortably adopting technologies and architectures, like containerization, microservices, and middlewares in their core systems. Tier-2: Financial services, government, and transportation sector. In CAICT’s assessment, their cloud journey is quite mature, having already integrated advanced technologies in AI, big data, and even blockchain to the use of best-in-class cloud technologies. Unsurprisingly, these two sectors are the most tech-native and tech-forward of all the sectors. ![]() The CAICT provides its evaluation of which industries are ahead and which industries are lagging behind, separated into three tiers. While China’s overall migration to the cloud is progressing quickly, the progress is not evenly distributed. That’s likely because these two segments are simply too small and immature in the grand scheme of things, as we already illustrated. ![]() However, the whitepaper does not provide a proportional breakdown for the PaaS layer, and did not even mention the SaaS layer. It takes more than just converting existing infrastructure to a different, for-rent business model to compete in PaaS. Naming these vendors as leaders is not surprising, because building attractive PaaS solutions requires attracting more capable tech talent, which pure tech giants like Alibaba and Huawei are better positioned to do than SOEs, like China Telecom. The public cloud PaaS market share leaders, in CAICT’s eyes, are the following: It was only a few years ago when AliCloud was more than 50%, and its aggressive marketing department would gloat about being bigger than the next ten competitors combined. What’s also noteworthy is the increasingly even distribution of market shares. (In fact, it is a bit surprising that AT&T and Verizon are not bigger players in the US cloud market.) Becoming a cloud IaaS vendor is a matter of converting their existing resources to a “for rent” model. They are typically the default Internet Service Providers (ISPs) and mobile data providers of a country, with the foundational infrastructure and networking capacities already in place. ![]() Telcos entering the cloud market is quite common in many markets. Cloud Maturity: China Versus the WorldĪlthough AliCloud remains the leading provider by a healthy margin, state-owned telcos like China Telecom and China Mobile are becoming formidable players in the fast-growing IaaS layer. Let’s unpack this whitepaper for more details and nuances. So how is China’s cloud industry doing, according to China? In a nutshell: still in its early days and mostly stuck in the IaaS stage. institutional investors and money managers. You can think of this whitepaper as the most official assessment of how China thinks its own cloud industry is doing, not what an outside industry analyst firm, like Canalys or Gartner, thinks in order to serve their clients, e.g. This is the 8th such whitepaper the CAICT has produced the first one was published in 2012. The CAICT is a think tank affiliated with the Ministry of Industry and Information Technology (MIIT) – a key regulator of China’s tech sector and a Ministry of frequent discussion in my previous writings (see tags: open source and e-CNY for more on MIIT). ![]() Last month, the China Academy of Information and Communications Technology (CAICT) published an in-depth, 47-page-long whitepaper, analyzing the current state of the country’s cloud industry. According to Canalys, China’s total cloud spending in 2021 increased by 45%, bringing high expectations for more in 2022. But one sector that has continued to grow, seemingly unabated, is its cloud computing industry. The Chinese economy may well be heading into a recession.
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