The use of cloud technology has become inevitable for businesses in this data-driven world. The technology has already become indispensable in the developed regions. It is also rapidly penetrating the emerging markets among which the Asia-Pacific (“APAC”) is under the spotlight.
Notably, the Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS) and Software-as-a-Service (SaaS) are gaining strong momentum in the APAC.
Moreover, the pandemic-led closure of offices and schools to restrict mass gatherings has given a significant rise to work-from-home and learn-from-home trends.
The trends, in turn, are fuelling the demand for remote project collaborations, video conferencingandhuge data storage, which has been bolstering the demand for cloud-computing products and services worldwide.
Several companies in the APAC have already migrated their workloads to the cloud and many are in the process of migration. The firms are highly focused on the development of digital transformation solutions through the cloud to cater to the increasing customer demand amidthe pandemic.
Given the upbeat scenario, cloud bigwigs, including such as Amazon AMZN, Microsoft MSFT, Alphabet’s GOOGL Google and Alibaba BABA, are making every effort to strengthen their cloud services, data center network, availability zones and regions in a bid to gain a strong footprint in the APAC.
Growth Prospects Abound in APAC
APAC has turned out to be one of the fastest-growing emerging cloud markets.
Per the latest report by IDC, public cloud spending by businesses in the APAC stood at $36.4 billion in 2020, up more than 38%. Out of the total spending, IaaS contributed the most (48%), followed by SaaS (40%) and PaaS (11%). In geographical terms, China accounted for the most by spending $19.4 billion, Australia held the second position by spending $5.2 billion, followed by India, which spent $3.5 billion in 2020.
The report states that public cloud spending will likely hit $48.4 billion in 2021on the back of growing momentum across IaaS, PaaS and SaaS.
Per a report from GlobalData, the cloud computing market in the APAC is expected to hit $191.8 billion by 2024, witnessing a CAGR of 7.7% between 2019 and 2024.
Another GlobalData report states that revenues in the IaaS space are expected to reach $39.3 billion by 2024,seeinga CAGR of 11.2% between 2019 and 2024.
Stocks Under Spotlight
Amazon, which holds the largest market share in the global cloud market, is continuously increasing investment in the APAC to capitalize on the region’s prospects. This is evident from the latest announcement made by itscloud computing arm, Amazon Web Services (“AWS”), regarding the opening of an infrastructure region in Tel Aviv, Israel, by the first half of 2023. Further, the selection of AWS by the government of Israel as the primary cloud provider as part of the Nimbus contract remains noteworthy.
Apart from this, AWS recently launched the second full cloud region in Osaka, Japan, comprising of three availability zones. Further, the company is gearing to open its second infrastructure region in Australia in the second half of 2022, which will be located in Melbourne.
In addition to this, AWS is gaining steam to launch additional regions in India, theUnited Arab Emirates and Indonesia in terms of APAC.
We believe that AWS’s growing efforts toward delivering resiliency for critical cloud workloads, lower latency and improved compliance capabilities to businesses in the APAC on the back of the above-mentioned endeavors will continue to aid Amazon, which currently carries a Zacks Rank #3 (Hold), in expanding its footprint in the cloud market of the underlined region.
Amazon.com, Inc. Price and Consensus
Amazon.com, Inc. price-consensus-chart | Amazon.com, Inc. Quote
Alphabet’s Google Cloud unit is firing on all cylinders to make a mark in the APAC’s cloud space. Notably, Google is gathering steam to launch a cloud region in Saudi Arabia, which will be comprised of three availability zones.
Apart from this, the launch of cloud regions in Jakarta, Indonesia and Seoul (South Korea) remains noteworthy. Additionally, the company is gearing up to launch a cloud region in Doha, Qatar. Further, its two second regions located in Delhi, India, and Melbourne, Australia, each comprising three availability zones, are in line to be launched this year.
The company’s aim toward delivering high-performance, low-latency, emission-free cloud-based services is expected to continue driving its customer momentum in the booming APAC cloud space.
Some of its notable customers in the underlined region are ANZ Bank, Optus, Sharechat, Tech Mahindra, L&T Finance, Wipro, Samsung Electronics, Lendlease, Foxconn, Kia Motors, Go-JEK, Tokopedia and XL Axiata.
Currently, Google’s parent Alphabet carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Alphabet Inc. Price and Consensus
Alphabet Inc. price-consensus-chart | Alphabet Inc. Quote
Alibaba is one of the leading cloud service providers in the APAC. The company is hugely investing to expand its presence in the cloud market of the underlined region. This is evident from its latest investment of $1 billion to empower start-ups, developers and new talents in the APAC as part of its new project —AsiaForward.
This Zacks Rank #3 company is also planning to build its first international innovation center in Malaysia. Apart from this, it is gathering steam to launch its first data center in the Philippines by the end of 2021.
Further, the launch of Alibaba Cloud’s third data center in Indonesia remains a major positive step toward penetrating the APAC region.
Alibaba Group Holding Limited Price and Consensus
Alibaba Group Holding Limited price-consensus-chart | Alibaba Group Holding Limited Quote
Microsoft is catching up in the growing cloud market,driven by its robust offerings by Azure. The Zacks Rank #3 company is gearing up to open a cloud availability region in China, namely China North 3, which will mark the fifth of its kind in the country and the first comprising multiple availability zones.
Notably, China North 3 will allow customers to not only use the Azure service but also Office 365, Dynamics 365 and Power BI.
Apart from this, the company is planning to establish its first data center region in Malaysia as part of its Bersama Malaysia initiative. The company will skill 1 million Malaysians by the end of 2023 and will aid in the formation of the MyDigital Alliance Leadership Council in the country.
Microsoft Corporation Price and Consensus
Microsoft Corporation price-consensus-chart | Microsoft Corporation Quote
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
Microsoft Corporation (MSFT) : Free Stock Analysis Report
Alphabet Inc. (GOOGL) : Free Stock Analysis Report
Alibaba Group Holding Limited (BABA) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research