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China players, trends in cloud computing services

By VentureOutsource.com Staff

For 2014-2018 Gartner forecasts the cloud computing market will expand at five-year CAGRs of 24 percent globally and 31 percent for China. After several years of steady growth deployment of cloud servers and storage is entering a rapid deployment stage write Asian analysts at investment bank BNP Paribas in a report out late last year. The different types of cloud (servers, storage) services are examined below.

Four Types of Cloud Services

Four Types Cloud Services

 

Infrastructure-as-a-Service (IaaS)
Noteworthy Global IaaS vendors include Amazon’s EC2 (Elastic Compute Cloud – server infrastructure) and S3 (Simple Storage Service – storage infrastructure) as part of Amazon Web Services (AWS), Microsoft Azure, Rackspace Cloud Servers, Google (Google Compute Engine), HP, VMware, among others.

Domestic China cloud service IaaS vendors include Ucloud, Grand Cloud, Tencent (Tencent Cloud), Baidu (Baidu Cloud) and CITIC Telecom CPC. The analysts at BNP write that some vendors tend to target a specific verticals. For example, Ucloud tends to target gaming companies, CITIC Telecom CPC targets multinationals.

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Platform-as-a-Service (PaaS)
PaaS, BNP writes in its report, is cloud computing where users access a computing platform to create, test, and/or deploy applications via cloud services using middleware, runtime and underlying infrastructure provided by the vendor.

Some global PaaS vendors include Salesforce.com (Force.com), Google (Google App Engine), Microsoft (Azure), IBM (BlueMix), Appistry, AppScale Engine Yard, among others.

In China, prominent Internet companies are strategically invested in PaaS including Baidu (Baidu Cloud), Tencent (Tencent Cloud), Sina (Sina App Engine) and others.

Software-as-a-Service (SaaS)
Familiar with most readers is SaaS, where users access software remotely as they access data hosted in the cloud via the Internet. SaaS provider deliver an application based on uniform application definition and users purchase the service on a pay-as-you-go basis or as a subscription based on usage metrics vs paying for upfront licensing fees in traditional software business.

Notable global SaaS vendors include Salesforce.com, Concur Tech, NetSuite, Workday, ServiceNow to name a few. Today, traditional software companies are seen moving toward the SaaS model with the launch of SaaS offerings including SAP (Business ByDesign), Oracle (Oracle On Demand), Microsoft (Office 365), among others.

Domestic players for SaaS in China are traditional software companies, namely, Kingdee, Chanjet and Kingsoft, which introduced the cloud version of their traditional on-premise software products although current cloud contribution as a percentage of total revenues remains small according to BNP analysts.

Storage-as-a-Service
Storage-as-a-service offers online digital storage on vendors’ own infrastructure for individuals or enterprises. The BNP report includes notable global vendors such as Nirvanix, Carbonite, Google Drive, Microsoft SkyDrive, Box, Dropbox and EMC/Mozy.

In China, the competition in storage-as-a-service, especially in the consumer market (with large free storage), is very intense with many players including prominent Internet companies and small private firms. Noteworthy Chinese storage-as-a-service vendors include Baidu Cloud, Kingsoft Cloud, Qiniu.com, Upcloud, Tencent Cloud, to name a few.

According to iResearch, the SaaS market in China kicked off in 2011 and by the end of 2013 there were a total of 220 million registered users, a 108% y-y increase from 2012, and the number is projected to more than double to 550 million by 2016.

Growth of China Cloud Storage Users

China Cloud Storage Users

In the BNP report analysts feel the war for SaaS in the consumer market is likely to continue given consumers appear less concerned about online security than enterprise customers. This translates to low switching cost between consumer vendors in the SaaS space.

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Analysts at BNP also write that large Internet companies, with deep financial capabilities and economies of scale are likely to squeeze smaller, private companies whereby smaller players may be forced to exit the market. In the enterprise market where storage is provided for a fee, service quality and online security play more important roles as differentiators among service providers.




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