IDC Forecast: China to Become the World’s Largest Private Cloud IT Infrastructure Market by 2023

On April 8, IDC released its latest quarterly tracker on cloud computing IT infrastructure. The report shows that in Q4 2018, revenue from IT infrastructure products (servers, enterprise storage, and data center Ethernet switches) in China’s cloud environments (including public and private cloud) grew 54.4% year‑on‑year, reaching USD 3.36 billion.

For full‑year 2018, total investment in China’s public and private cloud IT infrastructure (including vendor revenue plus channel mark‑ups) reached USD 12.01 billion, up 74.7% year‑on‑year, exceeding market expectations. IDC expects China’s total cloud IT infrastructure investment to reach USD 15.17 billion in 2019, a further 25.5% increase.

In Q4 2018, spending on public cloud IT infrastructure in China grew 68.6% year‑on‑year. This represents a slowdown compared with the first three quarters of 2018, and for the first time since early 2018, the growth rate fell below triple digits. Thanks to intense competition in the public cloud market, many providers have made heavy investments in IT infrastructure in recent years. Compared with 2015, public cloud operators in China had quadrupled their IT infrastructure spending by 2018, reaching USD 7.45 billion.

Unlike the global market, China’s private cloud infrastructure market has also maintained rapid growth. In 2018, related spending increased 49.2%, reaching USD 3.80 billion. Since IDC began tracking IT infrastructure deployments across different environments in 2013, the growth rate of China’s cloud IT infrastructure spending has consistently outpaced the global average. For both public and private cloud, China’s growth rate is roughly twice the global growth rate.

IDC forecasts that China’s cloud IT infrastructure spending will continue to grow rapidly, rising from about 12% of the global market in 2018 to around 25% within five years. By then, China’s private cloud IT infrastructure spending is expected to surpass that of the United States, making China the world’s largest private cloud IT infrastructure market.