Emerging markets lead growth in cloud spend in Asia

Emerging markets such as Thailand, Indonesia and the Philippines are expected to lead the rest of Asia in growing their cloud spending in 2023 amid growing maturity of cloud adoption in the region, a study has found.

According to Alibaba Cloud’s The next-generation cloud strategy in Asia report, 84% of existing users of cloud services are expected to increase their investment in cloud technology in 2023, while more than four in five (84%) are planning a full cloud migration in two years.

The increase in cloud spending is most prevalent in Thailand (95%), Indonesia (94%), Philippines (91%), Hong Kong (83%), and Singapore (83%), while most of those in Japan and South Korea indicated that they would maintain their current levels of investment in cloud technology.

Across industries, the gaming sector is expected to see the sharpest growth in cloud investment, followed by media and telecoms, internet and technology, as well as financial services. As for the types of cloud services, more organisations are expected to focus on data analytics and artificial intelligence (AI), compute services and automation.

“The latest research reveals important insights for businesses and cloud services providers in Asia. Cloud adoption has become a prerequisite for businesses to succeed and our customers are adopting a diverse cloud strategy to drive business growth in the digital era,” said Selina Yuan, Alibaba Cloud’s president of international business.

“With cloud infrastructure being the ultimate foundation for many cutting-edge innovations such as generative AI, we are as committed as ever to providing proven cloud-based solutions for businesses in different industries and supporting their seamless migration to the cloud services,” she added.

Early cloud adopters Singapore, Hong Kong and Japan have the highest number of organisations that have used cloud services for at least three years. Across the region, internet and technology, manufacturing and financial services were found to have the highest level of cloud maturity, according to the study, which was conducted by global market research firm NielsenIQ.

As a sign of growing cloud maturity, 84% of organisations expect to fully migrate to the cloud within the next two years, partly driven by new needs emerging during the pandemic that accelerated cloud migration. More than a third of respondents even anticipated a complete cloud migration within the next six months.

Private cloud emerged as the region’s most dominant cloud deployment model (40%), followed by public cloud (27%). The most prolific users of public cloud services in the region were those in gaming, public sector, retail, and internet and technology.

Hybrid cloud adoption is also on the rise, with the survey recording a seven percentage point net increase in current adoption rate compared to the respondents’ initial cloud strategy adoption. Of those that have changed their cloud strategy, 39% have switched to hybrid cloud. In addition to security, businesses tend to choose hybrid cloud for customised cloud services.

“The variety of cloud strategies adopted in Asia indicates that more businesses are looking for robust, resilient, secure and flexible infrastructures to digitalise their business. As a leading provider of cloud services, we will continue to introduce innovative and secure public cloud services to satisfy this demand,” Yuan added. 

Alibaba Cloud has been expanding its presence in Asia, with cloud computing having been earmarked as one of Alibaba Group’s core strategies for the future. In 2022, it opened new datacentres in Thailand, South Korea and Japan, adding to its existing Asian footprint spanning Singapore, Malaysia, Indonesia, Philippines, India and its home market in China.