Global cloud computing competition for China plans to kill 5 clouds in the world

In 2010, during the China (Shenzhen) IT Leaders Summit, Li Yanhong famously described cloud computing as "a new bottle of old wine." Meanwhile, Ma Huateng compared it to "hydropower coal," envisioning it as a key enabler for the future Avatar era. However, it was Ma Yun who expressed unwavering confidence in cloud computing, stating that Alibaba would "starve to death" without it. This early vision set the stage for Alibaba Cloud's eventual rise. By 2017, as the cloud computing boom gained momentum, these early predictions were revisited. While Amazon had launched its cloud services back in 2006, Chinese companies like Alibaba began catching up. As shown in the Gartner 2016 Public Cloud Market report, only Alibaba Cloud, targeting Amazon AWS, made it into the global rankings. The market was evolving rapidly, with global public cloud service revenue reaching $260.2 billion in 2017—an 18.5% increase from the previous year. By 2020, this figure was projected to hit $411.4 billion, highlighting the immense potential and growth opportunities in the sector. Dr. Zhang Hongjiang, former CEO of金山云, once predicted that cloud computing would eventually consolidate into just 5-10 major public cloud providers. With 2017 marking a pivotal point in the market, we saw companies like Huawei entering the public cloud space aggressively. Morgan Stanley’s reports also highlighted AWS, Microsoft Azure, and Alibaba Cloud as the “3A” leaders in the international cloud market. Alibaba Cloud aimed to secure a top-three position, while domestic players sought to emerge as the final five in a highly competitive landscape. In 2017, international cloud vendors intensified their presence in the Chinese market. AWS Beijing, operated by Halo New Network, finally obtained a license, and AWS Ningxia announced its launch later that year. At the 2017 Microsoft Technology and Ecology Conference, Satya Nadella revealed plans to triple the scale of Microsoft Azure in China within six months, including the introduction of Azure Stack and SQL Server 2017. With foreign giants entering the fray, competition in the Greater China region became fierce, leaving little time for Chinese cloud companies to establish dominance. As the second-largest economy and a major developing country, Greater China remains a critical battleground for cloud providers. Gartner reported that the global public cloud market grew by 31% in 2016, reaching $22.1 billion. In China alone, the public cloud market reached 147.6 billion yuan in 2016, growing at a rapid pace of 35–55%, far outpacing the global rate. To capture this opportunity, Chinese cloud companies must focus on three key areas: enhancing PaaS strategies, securing government cloud contracts, and exploring industrial cloud growth. Improving PaaS strategy is crucial. Local cloud providers have a better understanding of domestic enterprises, making them well-positioned to support business transformation. Experts like Wang Honglin argue that PaaS has become more important than IaaS, serving as the core of digital business frameworks. Alibaba Cloud’s EDAS, Tencent’s Lingque, and Qingyun’s AppCenter2.0 are all examples of how cloud platforms are enhancing their business capabilities. Securing government cloud contracts is another priority. In 2017, Tencent Cloud won the Xiamen Government Affairs Cloud project with a bid of just 0.01 yuan, signaling the start of a fierce competition. According to data from the China Government Procurement Network, there were 131 government cloud projects in 2016 and 2017, with Inspur leading in wins. IDC estimates that the Chinese government cloud market will grow at nearly 20% over the next five years, reaching over 16 billion yuan by 2020. This makes the government cloud an essential target for cloud providers. Industrial clouds are also emerging as a fast-growing segment. Alibaba Cloud and Tencent Cloud have both launched industrial cloud platforms, partnering with local governments to drive digital transformation. Under the "Made in China 2025" plan, industrial cloud is expected to revolutionize the manufacturing industry, making it a key area for cloud companies to explore. Expanding into international markets through the "Belt and Road" initiative is another strategic move. Alibaba Cloud has been actively deploying data centers abroad, while Tencent Cloud has expanded to 17 regions globally. Qingyun and UCloud are also strengthening their overseas presence, serving both foreign companies and local enterprises. As part of the "One Belt, One Road" policy, Chinese cloud companies see international expansion as a vital path to global success. Finally, integrating AI and big data capabilities is becoming a defining feature of Chinese cloud computing. Companies like Google, Baidu, Meituan, and Tencent are leveraging AI to enhance their cloud offerings. Google Cloud focuses on AI-first strategies, Baidu combines ABC (AI, Big Data, Cloud), Meituan provides AI tools for developers, and Alibaba Cloud integrates AI into various industries. These efforts highlight the growing importance of AI in the cloud ecosystem. With strong domestic support, global ambitions, and technological innovation, Chinese cloud companies are well-positioned to compete on the world stage. The question remains: can they challenge the likes of IBM, Oracle, AWS, and Azure? The answer may lie in their ability to innovate, adapt, and seize the opportunities of the cloud era.

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