Majority of Asia businesses expected to increase their investment in cloud technology in 2023, Alibaba reveals

Eighty-four per cent of existing organisations utilizing various cloud services users are expecting to increase their investment in cloud technology in 2023, while more than four in five (84%) businesses are planning a full cloud migration in two years, reads a new survey report authorised by Alibaba Group‘s digital technology and intelligence arm, Alibaba Cloud.

The global market research firm NielsenIQ was tasked with conducting the survey, titled “The Next-Generation Cloud Strategy in Asia” with the main purpose of better understanding the state of adoption of the prevailing cloud strategies – private, public and hybrid – across Asia.

What were the findings of the Alibaba survey?

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

The increase will come from Thailand (95%), Indonesia (94%), the Philippines (91%), the Hong Kong Special Administrative Region (S.A.R.) (83%), and Singapore (83%), while a larger portion of the surveyed businesses in Japan and South Korea indicate that they will maintain their current levels of investment. The gaming sector cloud investment is expected to rise the sharpest, then Media & Telecommunications, Internet & Technology and Financial Services.

In terms of investment priorities, a larger share of businesses in Asia will focus on data analytics and Artificial Intelligence (53%), cloud computing (52%), as well as 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.

Full migration to the cloud by 2024

The research also reveals that 84% of the surveyed businesses expect to fully migrate the cloud and adopt the technology within the next two years, partly driven by new needs that emerged during the COVID-19 pandemic. More than a third (36%) of respondents to the Alibaba survey even anticipate a full comprehensive migration to the cloud within the next six months.

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

A strategy towards more diverse cloud adoption

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 for businesses to choose public cloud, where 38% of the surveyed firms are expecting to boost investment by more than one-fifth in the following year.

In the Asian markets surveyed, South Korea has the highest rate of public cloud adoption (43%). The premier sectors currently utilizing the public cloud infrastructure are Gaming, the Public Sector, Retail, and organisations operating in the Internet & Technology space.

Meanwhile, hybrid cloud adoption is on the rise, with a 7 percentage-point net increase in current adoption rate compared to the initial cloud strategy adoption. Moreover, of the firms that changed cloud strategy, the highest portion (39%) have switched to hybrid cloud. Alongside security, businesses often choose hybrid for customized cloud services.

What were Alibaba’s thoughts on the survey report?

“The latest research reveals vital insights for firms and cloud services providers in Asia. Cloud adoption has become a condition for firms to succeed, and our clients are adopting a diverse cloud strategy to drive growth in the digital era,” commented Selina Yuan, Vice President of Alibaba Group and President of International Business for Alibaba Cloud Intelligence.

Selina Yuan, Vice President of Alibaba Group and President of Alibaba Cloud Intelligence International Business Unit
Selina Yuan, Vice President of Alibaba Group and President of Alibaba Cloud Intelligence International Business Unit

She continued, “With cloud infrastructure being the ultimate foundation for many cutting-edge innovations such as generative Artificial Intelligence, we are as strongly committed as ever to providing proven cloud-based software solutions for different businesses in different industries and sectors and supporting their seamless migration to the cloud services.”

“The cloud strategy forms adopted show more businesses looking for robust, resilient, secure and flexible systems for digitalizing. As a top cloud provider, we will continue to introduce innovative and secure public cloud services to satisfy this demand,” Yuan concluded.