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2023 will see increase in cloud investment in Asia: Alibaba
Tue, 14th Mar 2023

84% of existing users of cloud services are expecting to increase their investment in cloud technology in 2023, while more than four in five (84%) are planning a complete cloud migration in two years, as stated in a new survey report titled, The Next-Generation Cloud Strategy in Asia, commissioned by Alibaba Cloud, the digital technology and intelligence backbone of Alibaba Group.

Alibaba Cloud commissioned global market research firm NielsenIQ to survey to understand better the state of adoption of the prevailing cloud strategies - private, public and hybrid - across Asia. The survey was conducted between the end of September and early October 2022, collecting feedback through online questionnaires from 1,000 cloud strategy decision-makers in small to large-sized businesses that are currently using cloud services in eight markets in Asia: Hong Kong, Malaysia, Singapore, the Philippines, Indonesia, Thailand, Japan and South Korea. 

As more companies move their critical businesses online to efficiently handle their workloads in the post-pandemic world, businesses in Asia already using cloud services plan to increase their investment across various cloud strategies over the coming year.

The increase will most likely come from Thailand (95%), Indonesia (94%), the Philippines (91%), Hong Kong (83%), and Singapore (83%). 

Meanwhile, a larger percentage of the surveyed businesses in Japan and South Korea indicate that they will maintain their current levels of investment. 

Among the key industries, the gaming sector is expected to see the sharpest increase in cloud investment, followed by media and telecommunications, internet and technology and financial services. 

In terms of investment priorities, a larger share of businesses in Asia will focus on data analytics and AI (53%), cloud computing (52%), and automation (46%). The fact that more than half of businesses plan to increase investment in cloud computing underscores the importance of cloud infrastructure in supporting business growth.

“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. 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,” says Selina Yuan, vice president of Alibaba Group and president of international business for Alibaba Cloud Intelligence.

While more than two-thirds (69%) of the overall surveyed businesses have used the cloud for at least three years, those in Hong Kong, Japan and Singapore are the earliest adopters, with only one in five (20%) having less than three years of experience using cloud services. Industry-wise, internet and technology, manufacturing and financial services show the highest level of cloud maturity.

The research also reveals that 84% of the surveyed businesses expect to fully migrate to the cloud within the next two years, partly driven by new needs that emerged during the pandemic. Moreover, more than a third (36%) of respondents even anticipate a complete cloud migration within the next six months.

Among the surveyed businesses, the impact of COVID-19 has led to significant changes in their use of IT, with 54% reporting increased use of cloud-based software and 41% reporting acceleration with their cloud migration.

At the time of the survey, private cloud (40%) was the most popular strategy in Asia, followed by public cloud (27%). A strong reputation for security, reliable local support and attractive pricing are the main reasons businesses choose public cloud, in which 38% of the surveyed businesses expect to boost investment by more than one-fifth in the coming year.

In the Asian markets surveyed, South Korea has the highest public cloud adoption rate (43%). The top sectors currently using the public cloud are gaming, the public sector, retail, and internet and technology.

Meanwhile, hybrid cloud adoption is on the rise. The survey recorded a seven percentage-point net increase in the current adoption rate compared to the respondents' initial cloud strategy adoption.

Moreover, of the respondents who have changed their cloud strategy, the highest proportion, 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,” adds Yuan.