The Chinese Cloudburst

The dragon that is the Chinese tech industry is ever-growing and its cloud computing sector is heating up.

The nation’s cloud industry is expanding even more rapidly than its Western counterpart. For example, the cloud branch of Chinese computing giant Alibaba grew by 126% in 2016, with revenues hitting $675 million. The company now has hopes of surpassing the value of Amazon and Google’s cloud computing divisions by the end of this decade.

The dragon’s hoard grows

Looking at China’s runaway tech economy, where supplies are expanding rapidly to meet demands, it isn’t hard to see why companies like Alibaba and competitor Tencent are enjoying such growth.

China’s already massive overall economy is among the most rapidly growing on the planet, with GDP growth of 6.8% in 2017 surpassing the UK’s 1.8% and 1.6% in the US.

Unlike other nations enjoying similar rates of expansion, investments in China are generally secure. The country has the financial and physical infrastructure to support the steady growth of large tech businesses whilst keeping such organisations relatively safe from market highs and lows.

More importantly, Chinese businesses are benefiting from a hugely bullish market, which is breaking new ground in a social economy that is developing and capitalising on resources quickly. This is of course good for all Chinese companies, but it is especially good for business-to-business tech service providers.

Most new or growing businesses are looking to expand computing services as fast as, if not faster than, their own rate of expansion. Firms reinvesting and moving closer to the cutting edge of computing aim to leverage service offerings like cloud computing to streamline their business and maximise profitability. This all has the effect of distilling the success and rapid expansion of the Chinese business economy into a heady brew of easy growth for cloud computing service providers.

Clouds of smoke but no Western fire

As the Chinese cloud computing businesses grow, some competitors across the Pacific are becoming anxious about the impending competition of these tech rockets. Their worries are understandable but misplaced, as Chinese cloud computing is fundamentally different to the Western style.

Over here, cloud computing began as a grassroots technology, overtaking the business world from the bottom up, beginning with new start-ups and SMEs. Only later did larger businesses adapt, with initially simple offerings evolving to gain the infrastructure necessary to serve them.

In China, big information and communications behemoths like Alibaba, Tencent and China Telecom originally incorporated cloud computing technology into their own business models, using it to reinforce existing products. Only then did they begin to repurpose it as a service offering to other businesses, beginning with those who already used their services. 

This is a brief overview of the unique and successful Chinese cloud computing market and why it isn’t likely to challenge Western cloud businesses. You could also pose the question, why would Chinese businesses move in on crowded Western marketplaces when they have their own huge and ever-expanding marketplace in the most populous country in the world?

To sum up, Chinese growth is indicative of the country’s hardworking attitude, and cloud computing in the UK is in very safe hands.

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