Frost & Sullivan in collaboration with LeadLeo release the '2024 China Enterprise Going Global Cloud Services Market Report'

With the advancement of Chinese enterprises' overseas business operations, the characteristics and strategies of their overseas businesses are gradually changing. This is reflected in aspects such as scale, purpose, target, industrial structure, and implementation model. Overall, there is a trend of scale growth and structural upgrading.

The upgrade in the trend of Chinese enterprises going global for business operations presents an opportunity for cloud service providers to explore and practice more stable, flexible, secure, cost-effective, user-friendly, and diversified cloud service models. Grasping the key data about the characteristics of Chinese enterprises going global helps cloud providers build effective KYC systems and guide service strategies.

• Changes in target markets for Chinese enterprises going globalChinese enterprises are increasingly focusing on global multi-point layout when going global, no longer limited to North American and European markets. They are venturing more into emerging markets with demographic advantages and geographical convenience. Many small and medium-sized enterprises (SMEs) set Southeast Asian countries as their first stop when going global, creating synergies with leading cloud providers in the infrastructure expansion path in Southeast Asia. In addition, emerging markets such as Latin America, North Africa, and South Africa have become hotspots for going global. The huge development space in the smart low-carbon industries of Middle Eastern Gulf countries also attracts more Chinese enterprises going global.

   

• Industrial Structure Changes of Chinese Enterprises Going GlobalBased on the achievements in supply chain construction and technological upgrading, Chinese enterprises are gradually expanding from overseas internet markets (cross-border e-commerce, social entertainment, etc.) to high-end overseas industries such as finance, healthcare, and intelligent manufacturing. They have upgraded from single-business exports to full-industry-chain exports. The increasing participation in core overseas market industries means that Chinese enterprises will face greater security and compliance challenges overseas.

   

• Changes in the overseas business model of Chinese enterprisesAs the strength of outbound enterprises has increased, the models for Chinese companies to implement their business operations overseas have also shown diverse characteristics, including setting up overseas operation centers, overseas mergers and acquisitions, technology investment, supplier cooperation, and other approaches.

Against the backdrop of global digitalization, intelligentization, and low-carbon development, Frost & Sullivan believes that cloud providers are indispensable growth companions for Chinese enterprises going global.

The technical demand for Chinese enterprises using cloud in overseas markets is first reflected in the synergy between reliability and agility. Cloud service providers' technological innovations in high availability architecture, serverless architecture, multi-cloud architecture, and cloud disaster recovery meet the growing needs of Chinese enterprises going global.

• Stability requirements - High availability architecture and disaster recoveryFrost & Sullivan's systematic research on Chinese outbound enterprises has revealed that highly available architectures offer significant competitive advantages in terms of cost, functionality, and performance. Application-level disaster recovery and business-level disaster recovery solutions have become a necessity for outbound enterprises in the internet and financial industries. Enterprise users expect more effective automatic failover and recovery solutions, and the emergency takeover of business applications from disaster recovery sites needs to fully cover local to cloud and cloud to cloud links.

   

• Usability requirements - serverless architectureIn a serverless architecture, automated resource scaling helps achieve more efficient load balancing for users, enhancing cloud services' adaptability to high-concurrency interactive business scenarios; simplification of code deployment processes enables enterprise developers to focus more on business application development; containerized application deployment better reflects the characteristics of cloud services' pay-as-you-go usage and pricing, helping overseas enterprise users improve the cost-effectiveness of cloud usage.

   

• Flexibility requirements - multi-cloud architecture and rapid scalingDue to concerns about cloud vendor dependency and reliability, large enterprises going global prefer cloud migration solutions with multi-cloud architecture and multiple cloud computing providers. The multi-cloud architecture allows enterprises to choose the cloud infrastructure combination, cloud service provider combination, and cloud product combination that best suits their application characteristics and cloud budget.

For Chinese enterprises going global, migrating overseas businesses to the cloud is not only a technical consideration but also involves leveraging market resources, partner resources, and other strategic resources available in new markets. At this level, enterprise users' needs for cloud service providers include localized team support, service experience, global partners, and sustainable development capabilities.

• Cloud Service Ecosystem and Localization SupportChinese enterprises going global need cloud service providers to have a rich network of consulting partners, implementation partners, operation and maintenance partners, software partners, and industry solution partners to support rapid market entry overseas. In addition, enterprise users also value cloud service providers' market platforms, marketing promotion platforms, customer networks, as well as technical training and specific industry certification qualifications.

   

• sustainable developmentIn the face of the global advancement of carbon neutrality and development goals, as well as zero-carbon development targets, Chinese companies focusing on brand overseas expansion also pay attention to whether their cloud service providers contribute to their own sustainable development goals and whether they have adopted green computing plans. The technological progress of cloud service providers in the field of sustainable computing can create long-term value for enterprise users, partners, and communities.

There are three categories of cloud service providers that offer cloud services for Chinese enterprises going global. The first category includes established cloud service providers with strong versatility, such as AWS, Azure, and GCP. The second category consists of leading domestic cloud service providers in China, including Alibaba Cloud, Tencent Cloud, and Huawei Cloud. The third category includes cloud service providers with strong vertical service capabilities, such as IBM and Oracle. Each of these three categories of cloud service providers has its own advantages and continuously enhances their comprehensive service capabilities in line with the needs of enterprise users.

• Cloud Service Product PortfolioEnterprises have varying core needs for cloud services. Based on product classifications such as network, computing, storage, and databases, cloud service providers offer enterprises users a combination of segmented categories and innovative technology combinations at different dimensions, constructing a cloud service product portfolio that adapts to the business characteristics of users.

   

• Cloud service product capabilities upgradedCloud services integrate new technologies such as big data, cloud-native, blockchain, and AI. On the one hand, they improve the efficiency of cloud infrastructure, and on the other hand, they provide application platforms for new technologies, driving two-way growth in product value.

Global Information Compliance Environment Changes:

• The balance between 'regulation' and 'development'In 2024, the focus of progress in global information security compliance will not only emphasize 'regulation', but also take into account economic development, the creation and sharing of digital asset value.

   

• The legislative environment has been comprehensively improved.More countries and regions (such as African and Latin American countries) are actively promoting legislation and enforcement related to data security protection, seeking to achieve a data security protection environment at the same level as developed countries in order to attract foreign enterprises to set up operations and do business there.

   

• Accelerated legislation on artificial intelligenceWith the rapid development of AI technology, countries have strengthened supervision over AI applications. Management directions include data input (model training data transmission), computing (model security), data output (potentially infringing information), and other aspects.

The cooperation relationship between cloud service providers and ecosystem partners has undergone several stages of change, from initial partners reselling cloud services to the current strategic collaboration and value co-creation at both ends. The maturity of cloud service provider ecosystem construction means being able to provide enterprises with technologies, products, and services that better meet their business needs. For outbound enterprises, the global ecosystem construction by cloud service providers also implies an enhancement in localized services.

● Partner expansion and selection

Cloud providers adopt strategies such as the 'Ecological Partner Program' and 'Ecological Partner Guidance Framework' to expand global ecological cooperation relationships. The partners include but are not limited to ISVs, SI's, data centers, operators, database service providers, third-party security service providers, payment, logistics, marketing, consulting, and other institutions. In terms of partner selection, cloud providers comprehensively consider the product technology, service quality, and profitability of the partners, and expand into industry sectors to accumulate vertical industry know-how.

●Deliver front-line role positioning

In the face of enterprise users, cloud service providers can integrate with partners by integrating their product technologies for unified sales; or they can adopt an integrated approach, providing only basic network, computing, storage, and database services while handing over other services to partners. Under the former model of cooperation, the cloud service provider is at the forefront of delivery; under the integrated model, the partner is responsible for consulting, software, integration, and pre-payment services. Relatively speaking, when cloud service providers adopt an integrated approach, opening up customer resources is more conducive to stimulating partners' innovation and market development intentions, as well as fostering a win-win cloud ecosystem through cooperation.

● Cloud service providers empower partners

Against the backdrop of rapid development in the 'Business Cloud' market, cloud vendors and partners are innovating together to develop industry-specific solutions. They are also increasing support for partners in marketing, enhancing partners' visibility and customer acquisition capabilities. In addition, cloud vendors can leverage their strong channel resources to build ecological communities, strengthen communication and collaboration among partners, and improve partners' enthusiasm for revenue generation, innovation, and collaborative development through flexible business models and incentive mechanisms.

In the face of the diverse customization needs of overseas enterprise users, cloud service providers need to integrate large model technology, unlock logical space on the cloud, and reduce the supply cost of large-scale computing power. In addition, cloud services will be equipped with more default AI capabilities to help enterprise users enjoy the benefits of model democratization. This enables more Chinese enterprises going global to quickly adapt and develop overseas markets through out-of-the-box intelligent customer service, intelligent design innovation, intelligent business processes, and intelligent decision-making planning services.

• Under the general trend of model parity, cloud service providers are no longer merely suppliers of infrastructure resources. They need to integrate AI into cloud service design, offering a variety of AI tools and dynamic computing resource scheduling capabilities.

   

• Cloud Smart has upgraded and transformed from "AI+PaaS" to "AI as a Service". Model tuning, data cleaning, data annotation, and model training on the cloud will become standardized capabilities of cloud-native AI services.

Frost & Sullivan, in collaboration with LeadLeo, conducted a multi-factor hierarchical assessment of the competitiveness of Chinese enterprises in the cloud service market for outbound operations based on two evaluation dimensions: growth index and innovation index. This assessment was carried out through seven major indicators: business continuity assurance, information security and compliance for outbound operations, sustainable development, technological innovation and technical support, large model applications, optimization of cost mechanisms, and construction of cloud service ecosystems.Ranked by the 'Innovation Index' and 'Growth Index', Amazon Web Services, Alibaba Cloud, Azure, and GCP are among the leaders in the Chinese cloud service market for outbound enterprises.

Amazon Web ServicesAmazon Web Services (AWS) continues to provide globally accessible infrastructure for Chinese enterprises going global, building continuously enhanced low latency and high availability. By integrating compliance elements into cloud service architecture and privacy protection into design, AWS improves the level of cloud-native compliance services globally. With extensive feature coverage, flexible product portfolio, a mature ecosystem, and rich community resources, AWS provides highly reliable support for users migrating to the cloud on a large scale and for the long term, as well as a one-stop base for small and medium-sized enterprise users to quickly deploy and manage their businesses in different regions.

Alibaba CloudAlibaba Cloud effectively enhances the reliability of global infrastructure. Leveraging its long-term overseas market operation experience and service overseas Chinese enterprises, it has further gained recognition from Chinese enterprises going global. Alibaba Cloud collaborates with rich partner resources to provide a comprehensive set of cloud solutions for Chinese enterprises in more vertical industries. With a flexible pricing and payment mechanism, independently developed information security technology, and customized development capabilities, Alibaba Cloud quickly adapts to and meets the dynamic needs of Chinese enterprises going global, significantly improving the cost-effectiveness of cloud usage for enterprises.

AzureAzure continues to provide efficient support to Chinese enterprises going global in terms of localization, security, compliance, and more. Through strategies such as global security risk prediction, dynamic cloud cost management, integration with commercial software ecosystems, and hybrid cloud management, Azure helps enterprise users achieve consistent cloud usage experiences across different regions around the world. In addition, Azure's integration with OCI provides richer cross-cloud services for enterprise users in areas such as database management and resource management solutions.

GCPGCP leverages its strengths in AI, data analysis, machine learning, and other fields to provide diversified platform services for cloud enterprise users. It supports data-intensive enterprises and those requiring rapid application development and deployment, enabling them to apply cloud-native services at lower costs. In addition, by offering multi-cloud management tools and cloud migration services, GCP further enhances the usability and flexibility of cloud services, attracting more small and medium-sized enterprises (SMEs) going global to choose cloud-based business operations and development.