The quarter-on-quarter growth of capital expenditures of Ali and Tencent accelerated, and brokerages believed that this showed a reversal in the cloud computing industry. The boom in the field of cloud computing is based on the companies’ continued investment in the business.

Combined with Ali and Tencent financial reports, Haitong Securities statistics show that in Q2-Q4 of 2019, Ali’s single quarter capital expenditures were 63.82, 9.826 billion, and 6.659 billion yuan respectively, with year-on-year growth rates of -43.04%, -20.72%, and 24.56%; Tencent’s single quarter capital expenditures were 43.62, 66.32, and 16.869 billion yuan, with year-on-year growth rates of -38.43%, 11.01%, and 269.61%, respectively.

In the first quarter of 2020, the capital expenditures of Alibaba and Tencent cloud business reached 9.683 billion yuan and 6.151 billion yuan respectively, up 48.13% and 36.51% year-on-year.

Haitong Securities pointed out that the quarter-on-quarter growth of capital expenditures of Ali and Tencent accelerated, showing the reversal of the cloud computing industry. Alibaba’s financial report shows that in the first quarter of 2020, Alibaba’s cloud computing business revenue increased by 58% year-on-year to 12.217 billion yuan; FY 2020 cloud computing business revenue increased by 62% year-on-year to 40.016 billion yuan. According to data from Tencent, Tencent Cloud revenue in 2019 exceeded 17 billion yuan, and the number of paying customers has exceeded 1 million.

According to Gartner’s 2019 cloud computing market data, in the global market, Amazon, Microsoft, Alibaba Cloud, Google, and Tencent Cloud ranked in the top five; in the Asia-Pacific market, Alibaba Cloud ranked first, with its share rising from 26% in 2018 to 28%, and Tencent Cloud ranked fourth after Amazon and Microsoft.

In the Chinese market, according to Canalys data, Alibaba Cloud ranked first with a market share of 46.4%, while Tencent Cloud and Baidu Artificial Intelligence Cloud ranked second and third with a market share of 18.0% and 8.8%, respectively.

According to the forecast data from the China Information and Communication Research Institute, China’s public cloud market will reach approximately 66.8 billion yuan in 2019, a year-on-year increase of 42%. Under this volume, market competition in the field of cloud computing may be further headed and intensified.