Last week, SynergyResearch data shows that global enterprises spent a total of $74 billion on cloud computing in the fourth quarter of 2023, an increase of $5.6 billion compared to the previous quarter. The month on month growth rate reached a historic high, and the size of the cloud computing market increased by 19% compared to 2022. The cloud market in all regions of the world continues to grow strongly. From a regional perspective, the Asia Pacific region has the strongest growth, with annual growth rates of over 20% in India, China, Australia, and Japan; The United States remains the largest cloud market to date, surpassing the entire Asia Pacific region, with a market size growth of 16% in the fourth quarter. Synergy estimates that the global cloud computing industry's revenue for the fourth quarter was $73.7 billion, and the full year revenue for 2023 is expected to reach $270 billion. According to Synergy analyst John

Dinsdale predicts that with the assistance of AI, the market size will continue to grow in the future. What are the trends worth paying attention to in the field of cloud computing in 2024? Who will stand out in this competition?

01 | Absolute dominant position among giants Currently, Microsoft, Amazon, and Google hold an absolute dominant position in the cloud computing market. According to Synergy's data, although it has decreased by 2 percentage points compared to the previous month, Amazon still ranks first with a market share of 31%; The partnership between Microsoft and OpenAI helped Microsoft strive for excellence, with a market share increase of 2% to 25% month on month in the fourth quarter; Google's market share remains stable at around 11%. These three companies have a market share of up to 67%. If cloud computing revenue that was not included in the financial report is also included, the total cloud computing revenue of the three companies in this quarter is about $50 billion: Amazon is $23 billion, Microsoft is $18.5 billion, and Google is about $8 billion. In terms of quarterly growth rate, Amazon's AWS cloud service revenue increased by 13%, Microsoft's Azure cloud computing business revenue increased by 30%, and Google's cloud business revenue increased by about 25%. Some argue that after reaching a partnership with OpenAI last year, Microsoft has already taken a leading position in the field of artificial intelligence and may surpass Amazon as a potential winner in the cloud computing market.

02 | The domestic cloud computing market is in a catching up stage. According to the China Academy of Information and Communications Technology, the scale of the domestic cloud computing market was 619.2 billion yuan in 2023, a year-on-year increase of 36%. The overall market size of domestic cloud computing is expected to exceed one trillion yuan by 2025. Among them, telecom operators have seen rapid growth in cloud services. Its growth is mainly driven by the fact that the demand for cloud computing in China is gradually shifting from the Internet to traditional enterprises. The state-owned enterprise and state-owned assets background of the telecom operator cloud is easier to expand in the government enterprise market. At present, the domestic cloud computing market is in a catching up stage, with only 14% of the global market share in 2023. On the one hand, benefiting from the accelerated construction of data centers under the national "East West Computing" strategy and the high demand for intelligent computing power driven by artificial intelligence scenarios such as large models, cloud computing is expected to maintain rapid growth. On the other hand, computing power networks have opened up new models for the development of cloud computing in China. The integration and development of "computing network" and "cloud network" will become an important development opportunity period for companies in the cloud computing industry chain.

03 Jingtai Suggestion | Pay attention to the following trends. Whether from the global market development trend or the financial report data of the top five cloud computing companies in the world, the entire cloud computing industry is entering a mature period. The wave of generative artificial intelligence models represented by ChatGPT has ignited the demand for intelligent computing power, giving rise to a new business model of Model as a Service (MaaS), promoting the evolution of cloud computing service models towards computing power service models, and is expected to open a new cycle of development in the cloud computing industry. Digital sovereignty will receive more attention. Nowadays, the sovereignty cloud is no longer a singular thing. Sovereignty is not just about "data in my country". According to the Omdia model, this is the first level, and we can have a second level, which means the data will be processed in my country. Then you can enter the third level, which is jurisdictional control. Then, the fourth level is resilience, which can start using the cloud as a critical infrastructure, more like a government than a business. This theme will account for 10% to 15% of the cloud market. Not only the European Union, but also various parts of the world are developing, and different countries have introduced a large number of different data privacy regulations. Of course, attention should also be paid to the sovereignty of artificial intelligence. When artificial intelligence begins to be seriously developed, it is likely that some countries will find that legislation stipulates that some more sensitive tasks can only be completed domestically. The use of edges will increase and the edges will not disappear. Through GenAI, we will see more realistic edge reasoning. But as use cases become more common and demonstrate greater value, the advantages of their own use cases continue to grow. The challenge facing cloud computing is how to integrate edges and scale towards them. So, what we are seeing now is not a discussion from the edge to the core. This is a discussion from the core to the periphery.