Why China's Public Cloud Market Is Growing Over 50% and What It Means for the Future

Public Cloud Market Surpasses Expectations

With cloud computing becoming indispensable across industries, China’s public cloud market grew more than 50% in 2017, reaching 264.8 billion yuan, while the overall cloud market reached 691.6 billion yuan. The white paper projects the public cloud to exceed 902.6 billion yuan by 2021.

Rapid Growth of the Global Cloud Market

Globally, the public cloud market (IaaS, PaaS, SaaS) hit US$1110 billion in 2017 with a 29.22% growth rate, and is expected to average about 22% annual growth, reaching US$2461 billion by 2021.

Industry Cloud Competition Enters a “Warring States” Era

Cloud services are expanding from the internet sector into government, finance, industry, transportation, logistics, and healthcare. Major telecom operators, IT firms, and internet giants are all vying for market share in government and financial clouds, creating a highly competitive and still‑forming industry landscape.

Hybrid and Multi‑Cloud Solutions Become the Preferred Strategy

Single public or private clouds can no longer meet diverse business needs. The white paper emphasizes hybrid cloud as a way to combine the performance of public services with the security of private data centers, shifting IT focus from infrastructure to application‑centric deployment. In 2017, 12.1% of Chinese enterprises used hybrid cloud, and the proportion is expected to rise sharply.

Open‑Source Becomes a Consensus and Drives Innovation

Open‑source is now a mainstream approach. Chinese enterprises participate by open‑sourcing internal projects, contributing code, promoting projects through training and events, and adopting open‑source to cut R&D costs. The Cloud Computing Standards and Open‑Source Promotion Committee, founded by the China Communications Standards Association, now includes 98 members such as China Telecom, China Mobile, Alibaba Cloud, Huawei, and Tencent Cloud.

Security Risks Are Frequent; Business Risk‑Control Is Becoming Productized

Despite rapid security advancements, many cloud providers still exhibit weak data backup, key management, and risk‑control capabilities, leading to data leaks and compliance issues. The white paper recommends synchronized planning, construction, and operation of security services, and notes a trend toward “cloud‑productized” security solutions like fraud detection and content monitoring.

Policy Framework Strengthens and New Credit‑Management Mechanisms Emerge

Since 2017, policies such as the “Three‑Year Cloud Computing Action Plan” have clarified priorities in technology, industry development, application promotion, security, and environment optimization. A self‑regulation committee for cloud service operators now counts 57 major providers. Initiatives like the “two‑order mechanism” and credit‑management systems aim to improve market health.

Key Technology Trends Shaping the Future

Important trends highlighted include GPU‑cloud for high‑performance computing, the evolution of micro‑service architectures, the rise of serverless computing, agile and intelligent IT operations, edge computing, and the convergence of cloud and network (cloud‑network integration).