Analysis Report | Cloud Data Center Market Development Analysis Report

As more and more companies migrate their jobs and various applications to the cloud, using new technologies to drive industrial transformation and promote the further expansion of global cloud infrastructure service expenditures.

According to some statistics from the Ministry of Industry and Information Technology, as of the end of 2020, the total number of racks in data centers in China is about 3 million, and the total number of data centers exceeds 70,000, which can account for about a quarter of the total number of data centers in the world. In 2019, the scale of the domestic data center market was 156 billion yuan, a year-on-year increase of 27%. It is expected that the scale will reach about 200 billion yuan in 2020.

Internationally, in 2019, there were approximately 447 ultra-large data centers in the world; by the end of the first half of 2020, the number of global ultra-large data centers will reach 541, more than double the number of the same period in 2015. There are 100 new ultra-large-scale data centers in operation, and 176 data centers are currently in the planning or construction stage.

Statistics on the number of global data centers

Cloud computing has become the biggest driving force for the development of the IDC industry, pushing the scale of data centers to become larger and larger, and mergers and acquisitions among operators are becoming more frequent. According to data from the market research organization Arrow, in 2020, the global public cloud market is expected to exceed US$200 billion.

Performance of Chinese cloud vendors

In 2020, various industries around the world will be affected by the epidemic, but the global cloud service market continues to maintain rapid growth, and Chinese cloud service vendors are no exception. Judging from the performance of cloud service vendors currently disclosed, cloud vendors in China will have strong revenue performance in 2020. Alibaba Cloud, Tencent Cloud, and Kingsoft Cloud will each record a record high revenue in 2020, with a growth rate of more than 60%.

Compared with the global market, the domestic cloud service market is in its infancy. According to Synergy Research, Alibaba Cloud ranks fourth in the world in terms of revenue, and Tencent ranks seventh in the world.

In the wave of new domestic infrastructure, Alibaba and Tencent have invested heavily in seizing new market. The expansion of large-scale data centers is a core factor in enhancing the competitiveness of cloud services. Among them, Alibaba Cloud recently completed three data centers in Nantong, Hangzhou, and Ulan Qab. Tencent has intensively invested in the construction of large-scale data centers after adding 500 billion in new infrastructure. It has built a large-scale supercomputing center of 45 billion in Shanghai, and a large-scale data center in Qingyuan that can accommodate millions of servers. Baidu expanded its cloud server capacity to 5 million.

China is in a critical period of industrial transformation and upgrading, and data + computing power + algorithms are the driving factors of industrial intelligence. The three major Internet giants have increased their scale in large data centers, not only robbing the cloud service market, but also conducive to promoting the application of artificial intelligence technology, making AI technology ubiquitous.

Performance of overseas cloud vendors

Capital expenditure expectations for overseas cloud vendors remain optimistic. The overall capital expenditure growth rate of the five major cloud giants in North America has improved significantly, among which the growth rate of Amazon and Google has increased significantly. At the same time, accelerated development of 5G applications is expected to drive the cloud industry chain back to the track of rapid growth.

The capital expenditures of the five overseas cloud giants in 2020 (US$ million)

After the overall capital expenditure growth of the data center market in 2019 declined and slowed down, the year-on-year growth rate of the cloud giant’s capital expenditure for three consecutive quarters from Q2-Q4 in 2020 showed an accelerated growth trend.

In addition, it is worth noting that in order to get a share of the edge computing market, the five major US technology giants Facebook, Amazon, Microsoft, Google and Apple are investing in edge computing, including cloud computing infrastructure, equipment and applications. In addition, according to VentureBeat, the five major technology giants (collectively referred to as “FAAMG”) Facebook, Amazon, Microsoft, Google and Apple will acquire about 13 AI startups in 2020, covering machine learning, computer vision, autonomous driving, edge AI, etc. field. In 2019, “FAAMG” also acquired more than 14 AI-related companies in industries including commerce, autonomous driving, education, and customer service.

Based on such a huge cloud data center market, Gigalight, a 16-year-old company in Shenzhen, can provide services for this.

GIGALIGHT was established in 2006. It is an outstanding brand enterprise in the field of global optical communications, as well as a technology leader and design innovator in the global data center field. In August 2020, Gigalight won the honorary trophy of “2020 Most Influential 200G optical transceiver”. In December of the same year, Gigalight completed a financing of nearly 100 million yuan for the fields of “optical transceiver” and “coherent optical technology”, and was committed to creating more stable, higher performance, and more cost-effective products. We have the strength and reason to believe that we can provide reliable products and services for cloud data centers.

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Looking forward to 2021

From the perspective of the entire network demand, the demand from the underlying access network will further promote the further upgrade of the bearer network and the backbone network. The deployment of 5G depends on the support of the access network and the data center. The alternate upgrade of each layer is bound to be optical communications. The industry brings a new round of business cycle.