A Glimpse Into China's Burgeoning Edge Cloud Market

According to CNNIC, a national IT think tank, China had more than 989 million Internet users by the end of 2020, accounting for approximately 70% of the country's total population, whereas the figure only stood at 909 million a year ago. The COVID-19 crisis has clearly contributed to an accelerated penetration rate of Internet users in China. The user behavior changes have not only burdened the workload of the network but, at the same time, further inspired the development of the cloud industry.

Network. Image credit: Clint Adair/Unsplash

 From cloud to 'edge cloud'

Compared with the global market, China's cloud landscape is primarily led by the Infrastructure-as-a-Service (IaaS) segment. Dominated by the public cloud service and IDC service providers, the rising IaaS has developed several verticals to meet the evolving needs: cloud security, content distribution network (CDN), docker, cloud storage and so on. Simultaneously, innovative technologies such as AI and those enabling the Internet of Things (IoT) urged the cloud providers to adapt to the scaling technology deployment; edge computing came into the public sight. As estimated by GSMA, connected devices may reach 24.6 billion by 2025 while the IoT market size may exceed USD 1.1 trillion at the same time.

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Standing for a decentralized form of cloud computing, the so-called 'edge' networks can promptly respond to regional service requests. Forecasted

by MarketsandMarkets, the edge computing market size is expected to grow from USD 3.6 billion in 2020 to USD 15.7 billion by 2025 (a 34.1% CAGR). Driven by the expansion of IoT applications and increasing network traffic and low-latency processing demands, edge computing is appreciated for strengths like a fast response, higher efficiency and improved security.

Edge computing is at an early development phase, and pioneers in the field are mostly found to be network service providers, along with CDN vendors. CDN is a geographically distributed group of services that provides fast delivery of content. The services aim to provide a smoother Internet experience for users via storing cached contents at the end servers, instantly responding to nearby users' visiting requests. Thanks to their decentralized nature, CDN companies are inherently fitted to explore edge computing practice. 

CDN transcends to edge computing and edge cloud in China

In the US, leading CDN players such as Cloudflare and Fastly are in the front of the edge cloud business. CDN's Point of Presence (PoP) and the capability to allow users to define their use of the CDN lay a foundation for the edge cloud business. Fastly has determined to dive into the edge cloud business as an extensive IoT future is foreseeable and edge computing demand will rise with the scaling deployment of IoT.

Echoing the US edge cloud market, the domain in China is also led by public cloud providers as well as CDN players. In China, the CDN market is dominated by major public cloud providers, including Alibaba Cloud and Tencent Cloud, Huawei Cloud and traditional CDN companies ChinaNetCenter and BaishanCloud. Due to the trending of the 'Mobile Internet' and ICT technology upgrades, the CDN business has advanced. While AI, IoT and Industrial Internet started to be adopted in China, the change in business demand prompted the emergence of edge computing and cloud companies, as these began to shape their profiles in the field.

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