Competition between US and Chinese cloud providers is intensifying, according to Canalys, with Alibaba Cloud gaining ground in the global market.
While US companies made up six of the top 10 cloud providers, Alibaba’s global share grew more than 80 percent over the third quarter of the year to account for 4 percent of the market, the research firm said.
In the process, Alibaba Cloud became China’s highest ranked provider and the fourth-largest globally.
“US- and China-based cloud infrastructure service providers currently dominate their domestic markets, which is unlikely to change anytime soon in the current political climate,” said Canalys research analyst Daniel Liu.
“But competition between the two groups of providers is growing in other regions, including parts of Europe, the Middle East, Africa, and ASEAN, as they expand their datacentre regional footprints.”
The top three cloud vendors for the quarter were AWS, with a 32 percent market share; Microsoft, accounting for 17 percent; and Google, at 8 percent.
US-based IBM, Salesforce, and Oracle, China’s Tencent and China Telecom, and Japan’s NTT collectively made up 12 percent of the global cloud infrastructure market, which grew 46 percent to $21 billion.
AWS remained the largest cloud provider, growing 45 percent during the quarter to account for 32 percent of total cloud spend – more than Microsoft Azure and Google Cloud combined.
But the gap is closing as customers opt for multi-cloud environments.
US-China Cloud War
As a potential explanation for the growth of Alibaba Cloud, Canalys pointed to the trade war between the two countries, initiated by the Trump administration.
In particular, a report by the US Trade Representative in March that said US cloud providers are being forced to sell datacentre assets to local Chinese partners to continue operating in China.
“The expansion of US and China-based cloud infrastructure service providers is part of a wider technology arms race between the two countries, as part of efforts to increase their economic and political influence,” Liu added.
“In addition to building the largest and most scalable cloud platforms, both countries are competing to be the first to roll out 5G networks and build exascale supercomputers.
“The winner is likely to have the best artificial intelligence, cybersecurity, and military technologies.”