Cloud in China: The outlook

for 2025
What will drive China’s next wave of cloud adoption? Successful enterprises
will focus not on moving to the cloud but on using it to deliver tangible
business value.
by Kai Shen, Anand Swaminathan, Xiaoxiao Tong, and Kevin Wei Wang

© Getty Images

July 2022
 After a relatively slow start, China has made rapid strides in migrating to cloud computing and now has the
world’s second-largest market after the United States. China’s public cloud is expected to more than double
in size in the next few years, from $32 billion in 2021 to $90 billion by 2025.¹

To date, China’s cloud adoption has been led largely by consumer-facing companies, which need elastic,
on-demand access to unlimited computing power to help them respond to huge fluctuations in customer
demand. During China’s Singles’ Day shopping festival, for instance, e-commerce traffic, transactions, and
gross merchandise volumes can reach up to 30 times normal daily levels. Popular live-commerce shows with
real-time purchasing and audience interaction also make enormous demands on computer infrastructure.
The streaming room of top influencers can have up to 100 million views and over $1 billion in presales in a
single day.

Consumer-driven growth will remain an important driver of cloud adoption, but we believe the next wave
of migration could be spearheaded by China’s critical industrial and manufacturing sectors. To better
understand the developing cloud landscape in China, we surveyed 278 decision makers in enterprise IT,
digital, and cloud from a wide range of sectors, and derived insights about where business value is likely to
be created in the next few years (see sidebar, “About the research”).

1
Data from Gartner.

About the research

For the McKinsey China Cloud Survey 2021, we surveyed 278 decision makers in enterprise IT, digital, and cloud from a wide
range of sectors: IT, e-commerce, transport and logistics, education, retail, healthcare, auto, finance, real estate, hotel and
restaurants, manufacturing, and industrial. The executives taking part came from local public and private companies, state-
owned enterprises, and multinational corporations.

The survey was designed to gather data and generate insights in four main areas: cloud-adoption status and plans, motivation to
shift to cloud, cloud purchasing factors, and challenges and capability gaps.

To be selected for the sample, companies needed to have annual revenues in excess of 1 billion renminbi, a workforce of more
than 500 employees, and a digital transformation already under way or at the planning stage. The purpose of the survey was not
to provide a representative view of the market but to generate indicative insights into cloud adoption in China.

2 Cloud in China: The outlook for 2025

Private cloud remains prominent in China’s hybrid and multicloud future
Over the next few years, the pace of China’s cloud migration will be broadly in step with the rest of the
world’s, with a 19-percentage-point increase expected in IT workloads shifting to cloud between 2021
and 2025. But China differs from other countries in its high proportion of private cloud, which is expected
to reach 42 percent by 2025, compared with 36 percent for public cloud.²

As consumption increases, private cloud will retain an edge over public

As consumption
cloud in China. increases, private cloud will retain an edge over
public cloud in China.

IT workload distribution,¹ average % across all respondents (n = 278)

Traditional servers Private cloud Public cloud

27
36

+19 percentage points

32

42

41
22

2021 actual 2025 projection

1
Answers to the questions: What percentage of your company’s overall IT workload is currently on traditional servers, private cloud, and public cloud,
respectively? And what’s the expected percentage in the next three years? Answers were extrapolated to 2025.
Source: McKinsey China Cloud Survey 2021

2
“Public cloud” refers to on-demand, pay-by-use services and infrastructure offered and maintained by a cloud service provider; “private cloud”
refers to self-hosted, dedicated hardware running packaged software to provide consumable services; and “traditional server” refers to self-
hosted, dedicated hardware with no packaged software providing consumable services.

Cloud in China: The outlook for 2025 3

 Only 11 percent of the companies in our survey intend to be mostly on public cloud. The remainder will
continue to combine private cloud with traditional servers or use hybrid cloud, and 49 percent intend to
become cloud native. Demand for private-cloud customization is very high in China, constraining scalability
and profitability. Our analysis suggests that companies typically choose private cloud because they doubt
their ability to configure public cloud securely, operate in a regulated sector such as financial services, or
prefer to keep data in house.

Most Chinese enterprises are not keen on recurring-cost models for enterprise IT and software spending,
preferring instead to make one-off or up-front payments to capitalize IT and software costs (and use up any
remaining annual IT budget). As a result, cloud service providers (CSPs) seeking growth in China will need a
strong value proposition in private as well as public cloud and the ability to support enterprises in managing
a hybrid cloud infrastructure. They will also face the challenge of finding a scalable economics model and
managing short- to medium-term economics that are likely to be less attractive than in developed markets.

When enterprises are selecting CSPs, just 19 percent intend to use a single provider, while 76 percent intend
to partner with multiple CSPs. Only 5 percent believe they can build cloud themselves without external help.

China’s cloud future will be hybrid and multicloud.

China’s cloud future will be hybrid and multicloud.

Long-term vision for cloud infrastructure¹ Preferred type of service partnership²

% of respondents (n = 278) % of respondents (n = 278)

Single provider in private

11 Most on public cloud
19 or public cloud with
full package of solutions

38 Hybrid and cloud native

Multiple providers in private

76 or public cloud, selected
for their strengths
Mainly on server or private cloud,
51 small part on public cloud
(as pilots or for external
commercial business)
Self-built without
5 external cloud partners

1
Answers to the question: What is the long-term vision of your company’s cloud architecture?
2
Answers to the question: Alongside this vision, which type of service partnership will be the majority/preferred approach in driving the cloud vision in your
organization?
Source: McKinsey China Cloud Survey 2021

4 Cloud in China: The outlook for 2025

The two most important sectors economically lag in cloud adoption
While sectors with numerous tech-savvy and digital-native companies, such as e-commerce and education,
have shifted a significant portion of their IT workloads to the cloud, others have not—notably, the labor-
intensive industrial and manufacturing sectors that contribute more than a quarter of China’s GDP. But that
could quickly change given the latest national policy guidance.

In its 14th five-year plan for 2021–25, China seeks to transform the industrial and manufacturing sectors
by boosting digitization and productivity to offset rising labor costs and slowing population growth.³ The
plan calls for the adoption of industrial internet-platform applications to triple from 15 to 45 percent, and
the digitization of management and operations to increase from 55 to 68 percent in product research
and development (R&D), manufacturing execution, internal operations, maintenance services, and
similar processes. As a result, the industrial sector is poised for transformation, with 32 percent of local IT
workloads expected to migrate to (mostly private) cloud by 2025. Travel, transport, and logistics is expected
to see the next-highest shift to cloud, at 26 percent.

Cloud consumption will increase across the board, but with variations
Cloud
by consumption will increase across the board, but with variations
industry.
by industry.

IT workload allocation, by industry¹ IT workload change by 2025²

Average % across respondents in each industry Average change, %

Traditional servers Private cloud Public cloud

Industrial 9 36 55 6 26 32

Travel/logistics 21 37 42 6 20 26

Retail/FMCG³ 27 32 41 14 8 22

Finance 8 46 46 8 13 21

Manufacturing 24 26 50 9 12 21

Healthcare 23 31 46 11 9 20
Hotels/
48 18 34 6 14 20
restaurants
Real estate 19 45 36 12 6 18

Auto 25 29 46 10 5 15

Education 34 36 30 14 " 15
1
TMT⁴ 37 28 35 12 2 14

E-commerce 40 29 31 4 8 12

1
Answers to the question: What percentage of your company’s overall IT workload is currently on traditional servers, private cloud, and public
cloud, respectively?
2
Answers to the question: What’s the expected percentage change in the next three years? Answers extrapolated to 2025.
3
Fast-moving consumer goods.
4
Technology, media, and telecom.
Source: McKinsey China Cloud Survey 2021

3
The People’s Republic of China’s 14th five-year plan, covering the years 2021–2025, was passed by the Chinese parliament, the National
People’s Congress, in March 2021.

Cloud in China: The outlook for 2025 5

 Business growth is the biggest reason for migration
Our survey found that the three most important reasons for migrating to cloud were the need to scale fast
to support business growth (cited by 60 percent of executives as one of their top two reasons), the need to
increase IT efficiency (43 percent), and the need for high availability and resiliency (36 percent).

Notably, only 17 percent of executives said their main reason for migrating was to gain access to software
as a service (SaaS). This is understandable given the size of China’s SaaS market, which was worth just
$5.2 billion in 2020, a tiny fraction of the $120 billion US market. The broad adoption of SaaS applications
and tools would unlock enormous opportunities for innovation and value creation, but it would require a
fundamental shift in Chinese companies’ willingness to pay for software.

The most common reason for migrating to cloud was wanting to scale
The most common reason for China’s migration to cloud was a desire to scale
fast to support business growth.
fast to support business growth.

Major motivation to adopt cloud¹

% of respondents selecting factor among their top two reasons (n = 278)

94% of respondents
identified at least one
of these factors as among
their top two reasons for
adopting cloud

60

43 36
25
18 17

Scale fast Increase IT High availability Reduce Reduce capital Access to

to support efficiency and resilience infrastructure expenditures SaaS applications
business growth complexity

1
Answers to the question: What is your major motivation to adopt cloud?
Source: McKinsey China Cloud Survey 2021

6 Cloud in China: The outlook for 2025

The biggest barrier to migration is the perceived difficulty and cost
When asked to identify their top two concerns about cloud adoption, 94 percent of survey respondents
cited the cost and difficulty of migration, security, and regulatory compliance. By contrast, only 16 percent
were concerned about the lack of a compelling business case.

This suggests enterprises have yet to fully appreciate cloud’s ability to improve efficiency, boost productivity,
and capture business value. Clear messages about how revenues and margins can be enhanced by
adopting cloud could help CSPs and technology providers convince businesses to make the shift.

Three main barriers kept respondents from adopting cloud.

Three main barriers kept respondents from adopting cloud.

Major barriers to cloud adoption¹

% of respondents selecting factor among their top two barriers (n = 278)

94% of respondents
identified at least one
of these factors as among
their top two barriers for
adopting cloud

65

37
28
23
16 14

Cost and difficulty Security Concerns with Insufficient No compelling Lack of

of migration concerns regulatory cloud technical business case leadership support
compliance capabilities

1
Answers to the question: What are the main barriers to cloud adoption today?
Source: McKinsey China Cloud Survey 2021

Cloud in China: The outlook for 2025 7

 Cloud leaders have more than 70 percent of their IT workloads on the cloud

Clear differences in cloud adoption have emerged between companies:

Leaders had more than 70 percent of their IT workloads on the cloud in 2021 and expect to reach 90
percent by 2025. We subdivided them into two segments: Public-cloud leaders (16 percent of the survey
sample) are typically consumer-facing enterprises that look to their CSPs mainly for technical performance
and support with key accounts. Private-cloud leaders (21 percent of the sample) are typically state-owned
enterprises, financial and real estate firms, or traditional manufacturing and industrial companies; they
favor private-cloud and hybrid solutions because of security, regulatory, or data-compliance constraints or
latency requirements,⁴ and are therefore unlikely to move to public cloud.

Followers (34 percent of the sample) had between 50 and 70 percent of their IT workloads hosted on the
cloud in 2021, with a roughly even split between public and private cloud. Most followers are multinational
corporations or relatively price-sensitive businesses. They are starting to accelerate their cloud migrations,
but many are struggling with the shift to a new cloud operating model.

Laggards (29 percent of the sample) had only 31 percent of their IT workloads on the cloud—less than half
the share for leaders—in 2021. On average, two-thirds of their workloads are still hosted on traditional
servers, typically because they began their digital transformation late and lack clear road maps and
business support for cloud. Their share of IT workloads on the cloud is expected to rise sharply, to 60
percent by 2025, but they will still lag well behind leaders’ 90 percent. It’s worth noting that the largest
relative increase in cloud adoption in the next three years is expected to come from laggards (up by 29
percentage points) and followers (20 percentage points).

In terms of public-cloud adoption, there is an enormous gap between laggards, with only 13 percent of their
IT workloads on the public cloud in 2021, and public-cloud leaders, with 58 percent. This gap should persist
to 2025, when the share of IT workloads on the public cloud is projected to be 72 percent for public-cloud
leaders but only 24 percent for laggards.

4
Latency requirements refer to the need to minimize communication times between client requests from local devices and the CSP’s cloud
infrastructure.

8 Cloud in China: The outlook for 2025

Followers and laggards are poised to ramp up cloud adoption.
Followers and laggards are poised to ramp up cloud adoption.

IT workload distribution,¹ % across respondents within each classification (n = 278)

Traditional servers Private cloud Public cloud

Public-cloud leaders Private-cloud leaders Followers Laggards

15 19 13
30 24
41 18
58
72
58 36
32
69
41 68
23

20 38 40
27
19 18
8 13

2021 2025 2021 2025 2021 2025 2021 2025

Expected increase in share, 2021–25, percentage points

Public-cloud share +14 +4 +11 +11

Total cloud share +11 +15 +20 +29

1
Answers to the questions: What percentage of your company’s overall IT workload is currently on traditional servers, private cloud, and public cloud,
respectively? And what’s the expected percentage in the next three years? Answers were extrapolated to 2025.
Note: Numbers may not sum to 100%, because of rounding.
Source: McKinsey China Cloud Survey 2021

Cloud in China: The outlook for 2025 9

 Internal business-facing functions have the greatest gaps in cloud adoption
The aggregate numbers for China’s cloud-based IT workloads—roughly 60 percent in 2021, rising to 78
percent in 2025—mask wide variations in adoption rates between different functions and between leaders
and laggards within functions. Consumer-facing functions, such as marketing and sales and service
operations, have the highest average adoption rates, at 69 percent and 64 percent, respectively, while more
internal functions, such as logistics, manufacturing, and risk, have the lowest. One of the largest gaps within
a function is in strategy and corporate finance, where leaders average 47 percent adoption and laggards
just 11 percent.

Cloud-adoption
Cloud-adoption rates vary considerablywithin
vary considerably within and
and between
between business functions.
business
functions.

Cloud-adoption rate, by business function,¹ % selected by respondents (n = 278)

Average adoption rate Cloud leaders Laggards

77
74
69
64 64 62
63 57 57
60 51
47
44 43
44
32 31
34 25
29 23
19 19
23
16
11
9

Marketing Service Product Human Supply- Strategy and Logistics Risk Manufac-
and sales operations development resources chain coporate turing
management finance
1
Answers to the question: In which of the following business functions does your organization have at least some cloud adoption?
Source: McKinsey China Cloud Survey 2021

We broke these nine functions into 40 “domains,” or groups of business use cases, and found that the
average cloud adoption rate in each domain varied enormously, from less than 5 percent to 60 percent. We
then broke these 40 domains down across 12 industry sectors and found that the average adoption rate by
domain and industry was less than 25 percent. This further demonstrates that Chinese companies still have
enormous opportunities to develop, adopt, and scale use cases that have a direct impact on revenues and
margins.

Examples of promising domains with low adoption rates include:

— Marketing and sales: customer-retention management, pricing and promotions, personalization,

omnichannel fulfillment

— Service operations: contact-center automation, chatbots, asset tracking and maintenance

— Product development: process design R&D

— Supply chain: sales and parts forecasting, store operations, inventory and parts optimization, procurement,
spend analytics

10 Cloud in China: The outlook for 2025

— Manufacturing: digital twins and 3-D modeling simulations, yield and throughput optimization, predictive
maintenance

— Human resources: performance management, optimization of workforce deployment, sales force

execution

Cloud-adoption rates also vary significantly by business domains

within functions.
Cloud-adoption rates also vary significantly by business domains within
functions.

Cloud adoption by use-case domain,¹ top two per function, % selected by respondents (n = 278)

Laggards Cloud leaders² Average adoption rate Benchmark³

0 5 10 15 20 25 30 35 40 45 50 55 60

Customer-service analytics
Marketing and sales
Channel management
60

Service-operations optimization⁴
Service operations
Predictive service and intervention
(eg, network operations) 59

Product-feature optimization
Product and service
development Product-development-cycle
optimization 42

Optimization of talent management

(eg, recruiting, retention)
Human resources

Performance management 47

Sales and demand forecasting

Supply-chain
management
Warehouse optimization
34

Capital allocation
Strategy and
corporate finance
Treasury management
31

Logistics-network optimization
Logistics
Transportation management and
spend analytics 32

Risk modeling and analytics

Risk
Fraud and debt analytics
22

Yield, energy, and throughput

optimization
Manufacturing
Simulations (eg, digital twins,
3-D modeling) 20

1
Answers to the question: For each business function selected, in which of the following business activities has your organization adopted cloud (including SaaS
and licensed or self-built applications hosted on cloud infrastructure)?
2
Cloud leaders: companies among the 278 survey respondents that were identified as public-cloud leaders or private-cloud leaders.
3
The benchmark is the highest use-case-adoption rate in each business function.
4
For example, automated fault detection, field-operations optimization, field-force deployment.
Source: McKinsey China Cloud Survey 2021

Cloud in China: The outlook for 2025 11

 Key industry-specific use cases with direct business impact offer the greatest
potential for cloud pull-through
The opportunities to improve revenue or EBITDA through industry-specific use cases will be the most
powerful factor in persuading lagging sectors and businesses to adopt cloud. Our experience is that
cloud adoption alone is not enough to unlock business value. Instead, enterprises need to reimagine how
business models and processes can be improved through applications and solutions that take advantage
of cloud. These use cases are likely to be developed and implemented through partnerships between CSPs,
technology providers, and the enterprises themselves.

One example is the digital twins⁵ used to simulate, test, and validate new manufacturing processes before
they are put into full-scale production. By using digital twins, a supplier of machinery, robotics, or automated
systems can typically reduce R&D costs by 5 to 10 percent in product manufacturing and 40 to 50 percent
in process design. Yet only about a fifth of the manufacturing and automotive companies in our survey—and
none of the industrial companies—had adopted digital twins or other forms of cloud-based simulation in
product development.

5
Digital twins virtually replicate real-world assets for use in simulations.

12 Cloud in China: The outlook for 2025

An analysis of adoption by domain and industry reveals huge opportunities
An analysis of adoption by domain and industry reveals huge opportunities to
to create value from innovative cloud use cases.
create value from innovative cloud use cases.

Cloud-adoption rate by use-case domain and industry, top two per function
Average cloud-adoption rate, %
Adoption 0–10 11–30 31–50 >50 Not relevant
rate % to the industry

More-consumer-centric industries More-business-centric industries

Use- E- Hotels/ Travel/ Manu-

case Edu- com- restau- Real Retail/ logis- Health- Indus- factur-
Function domain cation merce rants TMT² estate FMCG³ tics Finance care Auto trial ing
A 88 45 58 36 73 47 43 38 41 58 0 45
M&S¹
B 38 45 35 39 53 53 26 44 47 30 33 48

C 75 36 31 47 60 37 57 56 24 52 0 48
Services
D 75 45 23 39 27 39 43 32 29 48 0 35

E 50 55 23 56 20 26 43 47 35 33 0 32
NPD¹
F 50 45 31 47 27 24 22 38 18 33 17 32

G 63 45 35 28 20 29 43 35 47 21 33 48
HR
H 63 36 35 31 27 29 30 50 35 18 33 42
I 25 45 23 31 27 37 17 24 24 0 32
SCM¹
J 13 73 31 25 21 26 18 15 17 35

K 13 9 15 14 13 21 30 44 18 6 0 26
S&CF¹
L 0 9 12 28 27 16 22 38 18 12 17 16

M 36 27 31 39 30 6 30 0 19
Logistics
N 55 15 19 32 35 18 27 17 26

O 13 18 4 19 20 16 4 50 6 12 0 13
Risk
P 13 9 0 17 20 11 4 47 3

Manu- Q 17 13 18 15 0 32
facturing R 14 11 6 12 0 19

A. Customer-service analytics J. Warehouse optimization

B. Channel management K. Capital allocation
C. Service-operations optimization L. Treasury management
D. Predictive service and intervention M. Logistics-network optimization
E. Product-feature optimization N. Transportation management and spend analytics
F. Product-development-cycle optimization O. Risk modeling and analytics
G. Optimization of talent management P. Fraud and debt analytics
H. Performance management Q. Yield, energy, and throughput optimization
I. Sales and demand forecasting R. Simulations

1
M&S: marketing and sales; NPD: new-product development; SCM: supply-chain management; S&CF: strategy and corporate finance.
2
Technology, media, and telecom.
3
Fast-moving consumer goods.
Source: McKinsey China Cloud Survey 2021

Cloud in China: The outlook for 2025 13

 Top Chinese CSPs lead the market, but global CSPs still have substantial value
pools to address
In our survey, 70 percent of respondents expressed a strong preference for Chinese cloud service
providers. That leaves 30 percent of the market that could be realistically addressed by global CSPs,
comprising the 10 percent of companies that strongly prefer global CSPs plus the 20 percent that are open
to CSPs from any region.

When assessing CSPs, the top three buying factors for Chinese enterprises are cybersecurity and data
compliance, performance and technical requirements, and key account and operations support. Other
significant factors include domain-specific solutions and value for money. The leading Chinese CSPs are
perceived to be at least twice as strong as other competitors across almost all key buying factors.

Although global CSPs are not the preferred choice for most Chinese companies, roughly 30 percent of
companies are open to using global providers, which translates into a total addressable cloud market of
$30 billion to $70 billion by 2025. Our survey indicates that public cloud could account for 45 percent of
this total addressable market, similar in size to the entire public-cloud market in Germany—the fifth largest
in the world at $25 billion.

Executives broadly agreed on the top buying factors and ratings for CSPs.
Executives broadly agreed on the top buying factors and ratings for CSPs.

Key buying factors for choosing CSPs¹ CSPs rated as the strongest for each buying factor²
% of respondents selecting buying factor % of respondents selecting vendors from these groups
among their top two (n = 278) among their top three CSPs
Global CSPs³ Emerging Leading
Chinese CSPs Chinese CSPs

0 50 100
Cybersecurity and
41
data compliance
Performance and
34 Over 97% of
technical requirements
respondents
Key account and selected these
33
operations support buying factors
among their
Domain-specific top two
28
solutions

Value for money 23

Complete ecosystem 15

Available in region
11
of service
AI computation 7 AI computation power
power
Proximity to data
5
center

1
Answers to the question: What are the key buying factors for cloud providers?
2
Answers to the question: For each of the buying criteria listed, what are the top three service providers that you think are the strongest in this dimension?
3
For survey purposes, “leading Chinese CSPs” were defined as the three with the largest market share; “emerging Chinese CSPs” as those with a lower share;
and “global CSPs” as the top two multinational CSPs by share of the Chinese market.
Source: McKinsey China Cloud Survey 2021

14 Cloud in China: The outlook for 2025

What enterprises and CSPs can do to accelerate cloud journeys
Businesses wanting to accelerate their shift to cloud and capture some of the more than $1 trillion of value at
stake⁶ need to ensure that they take the right approach and put key enablers in place. Following are some of
the most important steps:

— Target investments at business domains where cloud can enable revenue and margin improvements.
In our experience, carefully selecting applications within a specific domain to move to the cloud and
sequencing these moves thoughtfully delivers far more business benefit than a wholesale “lift and
shift” approach aimed at cutting IT costs. Applications should be aligned to specific business cases and
quantifiable business value so they can be prioritized and tracked.

— Set up a governance model that facilitates collaboration between IT and the business. To manage the
strategy and governance of their cloud migration, successful companies create a business-execution
office comprising business, finance, and technology leaders, who are jointly responsible for delivering
the migration and defining business value, key performance indicators (KPIs), migration paths, economic
models, and prioritization criteria. The business-execution office is often supplemented by a cloud
center of excellence made up of engineers, architects, and product designers. Their role is to design the
foundational reference architecture, translate migration scenarios into deployable archetypes, integrate
modern ways of working into a cloud-native operating model, facilitate rapid adoption across the
business, and champion site-reliability engineering to optimize the cloud’s operational efficiency.

— Build a cloud-native operating model to unify and standardize infrastructure management and
technology delivery. To prevent legacy IT processes, manual interventions, and multiple handoffs
from impairing migration speed and quality, successful companies redesign the entire technology-
delivery process. They reengineer every step—from architecture design and infrastructure-resource
provisioning, through application development, testing, and deployment, to production, monitoring, and
incident handling. They also ensure that the new processes are highly automated and have extensive
self-service functionalities to provide a seamless developer experience.

For their part, global CSPs seeking success in the Chinese market could target sectors where they can bring
global best practices to bear and offer a suite of technology solutions to accelerate business value creation.
They could help clients to define their cloud target state, focus on how to create value, plan a clear migration
route with separate paths for legacy and modern applications, manage a hybrid model during the transition,
and support private- and public-cloud operations thereafter. Along with local CSPs, system integrators,
ecosystem technology providers, and coaching and change-management firms, they will also participate in
cloud ecosystems to build technology solutions that improve outcomes for Chinese businesses.

China’s cloud migration is now entering its second wave. Adoption in the next few years will be driven by the
introduction of an array of industry-specific solutions to improve business performance.

Kai Shen is a partner in McKinsey’s Shenzhen office, Anand Swaminathan is a senior partner in the Bay Area office, Xiaoxiao
Tong is an expert in the Shanghai office, and Kevin Wei Wang is a senior partner in the Hong Kong office.

The authors wish to thank Xinghong Fang, Jayne Giemzo, Chris Thomas, Joanna Wu, Tiff Wu, and Jeff Yang for their
contributions to this article.

Copyright © 2022 McKinsey & Company. All rights reserved.

6
“Cloud’s trillion-dollar prize is up for grabs,” McKinsey, February 26, 2021.

Cloud in China: The outlook for 2025 15