Could the United States lose cloud computing to China?

The pandemic has seen many businesses, especially digital-based ones, profit as millions of people around the world have switched to working from home. China’s Huawei, a leader in information and communications technology infrastructure as well as smart devices, doubled its global market share for infrastructure as a service in 2020, according to Politics.

Cloud computing has become a staple of the digital age as it hosts everything from databases and storage to emails and artificial intelligence, which include data applications that require enormous power. of compute that the cloud can provide.

This is an area that could follow the 5G path if the United States is not careful; While Microsoft, Amazon and Google were all the first in the space, China is gaining market share by adopting policies that promote its own suppliers.

China is preventing foreign suppliers from competing in China, allowing Chinese companies to dominate industries with a rapidly growing economic power. China is currently home to the second largest cloud services market. In addition, China has adopted policies that promote the development and growth of cloud services, providing $ 1.4 trillion for digital infrastructure in the five-year plan.

This is a strategy that has worked before to propel Huawei into dominance as a global supplier of telecommunications equipment and take advantage of the global 5G market.

Huawei is currently in partnership with Mexico and Brazil, providing federal data centers for each country, as well as investing in Argentina and Chile. It is about “forming a giant triangle of improved coverage and better connectivity in Latin America,” said Huawei regional president Xiao Fei.

While the United States has a stronger position in the cloud computing industry as a pioneer, it continues to take a step back on the global stage as more emerging countries seek digital trade deals, what Huawei continues to capitalize on.

Cloud computing in the digital age

Cloud computing continues to generate profits and offers exponential growth opportunities as the world increasingly moves to digital. The WisdomTree Cloud Computing Fund (WCLD) gives investors outright exposure to companies that provide cloud-based software, such as popular company Crowdstrike Holdings.

WCLD tracks the BVP Nasdaq Emerging Cloud Index, an equally-weighted index made up of companies that derive the majority of their revenue from cloud-delivered software. It could mean remote delivery or a subscription, transaction, or volume based cloud-based business model.

WCLD provides multi-cap exposure to emerging, fast-growing cloud software and services companies. The assets include Mimecast Ltd (MIME) at 1.98%, Crowdstrike Holdings Inc at 1.94%, and Okta Inc at 1.89%.

WCLD has an expense ratio of 0.45%.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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