ITEM: A new survey commissioned by Alibaba Cloud expects most Asia businesses to increase their cloud investments this year, with the vast majority of them planning a full cloud migration by 2024 – which is undoubtedly good news for Alibaba Cloud.
The report – carried out by global market research firm NielsenIQ – says 84% of businesses in Asia that are already using cloud services plan to increase investments across various cloud strategies over the coming year.
Much of that increase will be driven from markets such as Thailand (where 95% of respondents will increase their cloud spend), Indonesia (94%), the Philippines (91%), Hong Kong (83%), and Singapore (83%), while a larger percentage of the surveyed businesses in Japan and South Korea indicate that they will maintain their current levels of investment.
The gaming sector is the industry sector likely to see the sharpest increase in cloud investment, followed by Media & Telecommunications, Internet & Technology and Financial Services.
Data analytics and AI a big priority
In terms of priorities, 53% of respondents across Asia said their cloud investment will focus on data analytics and AI. Other popular priority areas include cloud computing (52%) and automation (46%).
Selina Yuan, Vice President of Alibaba Group and President of International Business for Alibaba Cloud Intelligence, says the focus on these areas makes sense when considering the importance of cloud infrastructure not only in supporting business growth, but also emerging cutting-edge technologies like generative AI.
(Side note: parent company Alibaba is reportedly working on its own generative AI, as are other Chinese companies like Huawei, Baidu, Tencent and JD.com.)
The report also found that 84% of surveyed businesses expect to fully migrate to the cloud within the next two years, partly driven by new needs that emerged during the pandemic. Many firms said that COVID-has led to significant changes in their use of IT.
For example, 54% reported an increased use of cloud-based software, while 41% said COVID ended up acceleration their cloud migration plans. For some, the acceleration has been speedier than others – more than a third of respondents said they expect to complete their cloud migration within the next six months.
Private cloud rules Asia, hybrid is rising
As for what kinds of cloud Asia businesses are adopting, private cloud (40%) is the most popular strategy in Asia, followed by public cloud (27%). South Korea has the highest public cloud adoption rate at 43%.
That said, 38% of respondents expect to boost public cloud investment by more than one fifth in the coming year, driven mainly by strong security, reliable local support and attractive pricing.
Meanwhile, hybrid cloud adoption is still growing – of the respondents who have changed their cloud strategy, the highest proportion of 39% have switched to hybrid cloud.
The survey results should be encouraging to Alibaba Cloud, which last month reported its slowest quarterly revenue gain in the past 12 months (3% for the Oct-Dec 2022 quarter).
Related article: Cloud to surpass on-prem for Asia’s top companies by 2025
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