Chinese spending on innovation, technology growing fast
September 19, 2017 Category Innovation, Weekly
Corporate spending on innovation and technology has been growing twice as fast in China than in the U.S. over the past two years, fueled by accelerating migration to cloud services. In a latest research report by U.S. investment bank Morgan Stanley, information technology (IT) spending by Chinese companies is projected to grow 11.2% this year, more that double their American counterparts’ 5.3% rise. The study, led by Equity Analyst Grace Chen, surveyed 126 chief information officers (CIO) in China and an undisclosed number of CIOs in the U.S.
Chinese companies spent 10.2% more on technology last year, against 4.4% in the U.S. The findings also show Chinese cloud and customer relationship management (CRM) software spending growing at its fastest pace in three years, and the winners of such acceleration are the “leading public cloud vendors, and select semiconductor suppliers”.
Among Chinese cloud providers, AliCloud and Tencent are the industry leaders, while IBM, in partnership with Wanda, is the No 1 foreign supplier, ahead of Amazon Web Services (AWS) and Azure. Private-sector corporate investment will accelerate this year, recovering from the low levels of 2016. Lower real interest rates will stimulate investment in productivity-enhancing technologies, such as robots and cloud-based services, according to Gordon Orr, Senior Adviser at McKinsey China. “Our survey shows more than 30% of CIOs have adopted Alicloud, and that China will maintain a similar leading share over the next three years, echoing our positive view,” Morgan Stanley Analysts said.
“What surprised us most, was CIO’s optimism about Tencent and Huawei in public cloud: Tencent ranks second with a 15% share predicted to rise to 23% within three year,” they added. Morgan Stanley also noted Huawei, which trails AliCloud and Tencent in public cloud, tops its competitors in private cloud, a result of Huawei’s competitive advantage in having a hardware business. In China, companies interviewed said about 34% of their workload is handled using the cloud. The analysts said that figure will be bumped up to 53% by the end of 2020, and more specifically, the percentage of workload on the public cloud is expected to rise from 20% to 29%. The size of the public cloud as a service market in China is expected to be valued at USD2.4 billion this year, up from USD1.8 billion in 2015, and then to grow to USD3.8 billion by 2020, the South China Morning Post reports.
- KURT VANDEPUTTE (UMICORE) APPOINTED CHAIRMAN OF THE BOARD OF THE FLANDERS-CHINA CHAMBER OF COMMERCE (FCCC)
- Webinar: “Knowing Your Chinese Partner” – May 26, 2021, 10 am – 12 am
- EMA starts rolling review of CoronaVac, WHO approves Sinopharm vaccine for emergency use
- The Global Times warns not to politicize the Comprehensive Agreement on Investment (CAI)
- Hainan to become biggest duty-free market in the world