Global cloud computing service providers are well known in China and India, but they're clearly not alone. According to the latest market study by 451 Research, there are nearly 200 vendors in both nations that are providing cloud services -- such as IaaS, PaaS and SaaS.
451 Research analysts believe that China and India will become major cloud computing markets within the Asia-Pacific region, generating revenue of $1.59 billion and $851 million respectively, with a CAGR of 27 percent and 24 percent through 2020.
Combined, these two countries will account for about 30 percent of the total Asia-Pacific cloud computing market.
Market Development in China and India
The majority of revenue comes from compute use cases within the IaaS segment today, but the evolution of big data analytics and the Internet of Things (IoT) applications will likely accelerate the future adoption of cloud storage in both markets.
Government-led cloud initiatives are helping to drive growth. Governments in both countries are current users of public and private cloud computing technologies. Their combined efforts have generated interest from financial investors, with current merger and acquisition activity now at an all-time high.
"We believe the cloud computing markets in China and India show huge growth potential," said Agatha Poon, Research Director at 451 Research. Industry-wide digital business transformation has unlocked market opportunities and created an ecosystem of cloud suppliers in China and India. Our survey data indicates that local businesses are sizing up service provider capability, based upon a set of attributes."
While telecom incumbents and large IT providers have begun to develop cloud-related revenue streams, smaller vendors and cloud service startups are making an aggressive push to build their market share.
At present, there are no clear market leaders in either country. The total cloud computing 'as a service' market for China and India stood at $773 million in 2015, with the top ten cloud vendors collectively generating revenue of $571 million.
Market Outlook for Cloud Computing Services
Given that the competitive landscape is still developing, with influential global cloud players competing for data center presence, and a new breed of local cloud service providers emerging, 451 Research expects to see a cooperative market development environment materialize.
As an example, there's the partnership between IBM and India-based Reliance Communications, established to offer IBM Cloud infrastructure services to government and enterprise customers in the region.
Regulatory issues associated with data security, governance and network performance still exist, but 451 Research analysts remain upbeat. "Our interviews have led us to believe that continued government support, a positive investment climate, and growing enterprise readiness will give rise to cloud computing powerhouses in India and China," Poon concluded.