Canalys estimates that spending on cloud infrastructure services in Chinese mainland increased 18% year-over-year to $9.2 billion in the third quarter of 2023, accounting for 12% of global cloud spending. Cloud vendors are still relentlessly focused on AI innovation and investment, and are constantly launching new AI products and solutions.
In the third quarter of 2023, Alibaba Cloud, Huawei Cloud and Tencent Cloud, the three largest cloud** providers in Chinese mainland, grew by 22% together, accounting for 73% of customer spend. China's cloud providers are increasingly focusing on nurturing and prioritizing partner ecosystems. In the third quarter of 2023, the Chinese market generated 25% of total revenue through channels, compared to 23% in the previous quarter.
According to the "Omdia Competitiveness Universe: 2022 Global Hybrid Cloud and Multicloud Management Solutions Report" released by research institute Omdia, the hybrid cloud and multi-cloud market will grow at a compound growth rate of more than 26% from 2021 to 2026, and will achieve a market size of more than $38 billion in 2026.
China's cloud market may be in a steady growth phase, but top cloud vendors continue to invest heavily in AI technology, underscoring their collective commitment to embracing this growth trend. Recognizing that advances in AI technology are closely linked to the support of partners, most vendors recognize the importance of nurturing an ecosystem of partners. The inherent complexity of AI technologies presents challenges in adoption and deployment, but it also presents opportunities for the broader AI ecosystem. This quarter, Alibaba Cloud and HUAWEI CLOUD launched an AI model development platform that can integrate third-party open-source AI models, allowing developers to access and train various models on their respective cloud platforms.
Without the help of a range of partners, achieving widespread deployment of AI technology is an almost impossible task for leading companies. This relies heavily on an AI ecosystem that includes developers, ISVs, and experts, which is critical to delivering value to customers at scale. Canalys analyst Yi Zhang said. "The collaboration between Salesforce and Databricks and cloud hyperscalers such as AWS and Google demonstrates that collaboration between cloud vendors and service providers, as well as between different cloud vendors, is a strategic necessity. Combining technology, offerings, and expertise is critical to capturing market growth opportunities and driving value. ”
Alibaba Cloudis the market leader in the third quarter of 2023 with a market share of 39%. Alibaba announced in its most recent earnings report that it was abandoning plans to divest its cloud business unit. At the same time, Alibaba Cloud is taking steps to optimize profitability by reducing low-margin project operations. Despite the slowdown in revenue growth, Alibaba Cloud is still committed to launching new AI products. In October 2023, the company launched the "Bailian" platform, a one-stop AI basic model development platform. The platform simplifies complex tasks for users, including model selection, fine-tuning, training, and development, by providing access to different AI foundation models. In terms of capital investment, Alibaba Cloud announced in September that its first data center in central China was officially opened in Wuhan.
In the third quarter of 2023, HUAWEI CLOUDContinued to be the second largest cloud service provider with a market share of 19%, up 16% year-over-year. HUAWEI CLOUD launched the AI Gallery platform in September 2023, integrating various open-source AI foundation models. The platform is open to enterprises and developers around the world, facilitating the customization of AI model applications. As a strategic part of its global business expansion, HUAWEI CLOUD hosted the HUAWEI CONNECT conference in Paris in November 2023. The conference aims to strengthen its partner ecosystem in Europe, and HUAWEI CLOUD revealed that the number of partners has increased by 400% year-on-year. HUAWEI CLOUD 2023 European Partner. Looking ahead, HUAWEI CLOUD hopes to support the growth of 1,000 European startups in the next five years.
Tencent CloudIt grew 14% in the most recent quarter, accounting for 15% of the market share. Tencent Cloud's performance exceeded expectations after deciding to divest low-quality, low-value projects. As competitors step up efforts to build a partner ecosystem, Tencent Cloud also announced an update on partner development in September. It was revealed that this year it is planned to expand the range of cloud services available for sale by channel partners from 80 to more than 110, with the goal of eventually granting partners the right to sell all products. Tencent Cloud has also invested in its channel ecosystem, strengthened support for partners, and increased the number of channel managers and architects by 30% to help facilitate collaboration with partners.
Canalys defines cloud infrastructure services as services that provide infrastructure-as-a-service and platform-as-a-service on dedicated, hosted, private or shared public infrastructure. This excludes direct software-as-a-service spending, but includes revenue generated from the use of infrastructure services, hosting, and operating those services.
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