Behind the price reduction "Yangmou", Alibaba Cloud and Operator Cloud "go their separate ways"
Author/ IT Times reporter Fan Xinru
Editors: Wang Xin, Sun Yan
On the evening of May 18, Alibaba Group announced in its fiscal 2023 Q4 and full-year financial results that its reform plan launched at the end of March is advancing rapidly, and Cloud Intelligence Group will move from Alibaba Group to a complete spin-off and independent listing.
More than 20 days ago, Alibaba Cloud announced the largest price reduction in history at the 2023 Alibaba Cloud Partner Conference, with the price of core products reduced by 15% to 50% across the board, and the storage product being reduced by up to 50%.
Tencent Cloud subsequently cut prices, and on the eve of World Telecom Day on May 17, Mobile Cloud also announced limited-time special offers.
In the past month or so, the domestic cloud market has been surging. Price reduction, listing... The cloud computing market, which is pinned on the hope of the "second growth curve", is ushering in a new storm.
Head cloud merchant "fight"
Secondary cloud merchants suffered
In mid-April, a cloud merchant sales Xiyang (pseudonym) had just won a cloud order from a private enterprise. And the timing of his order was exactly a week before Alibaba Cloud cut prices. Although Aliyun's price reduction mainly involves the price of the official website, Xiyang still has some palpitations. "If the news of Aliyun's price reduction comes out earlier, this list will be difficult to say." He said.
In the past two years, Xiyang has clearly felt that the competition in the public cloud market has intensified, and price factors have become more and more important regardless of subjective reasons such as customer relations. The two companies he recently contacted that are willing to "change clouds" are both due to high prices.
"The water of domestic cloud merchant prices is too deep." A comprehensive cloud agent with 5 years of experience said that as long as the volume reaches a certain standard, the price can be applied. Even Alibaba Cloud, for some specific products, he can give a lower discount than the official website, as low as 3.8%.
Alibaba Cloud official website price calculator
On May 16, 20 days after Alibaba Cloud's price cut, Tencent Cloud announced a price reduction for a number of core cloud products, with some product lines falling by up to 40%, and the price reduction policy will officially take effect on June 1. Does Tencent Cloud's follow-up to Alibaba Cloud's price reduction mean that the entire cloud computing industry is falling into price involvement?
In the view of the above-mentioned cloud agents, price reduction competition may only appear among the head cloud providers, and the prices of secondary cloud providers such as Kingsoft Cloud and Lycra Cloud have bottomed out and are unlikely to blindly follow. However, the successive price reductions of the head cloud merchants have further narrowed the price difference between the secondary cloud merchants and the head cloud merchants, which is bound to affect the survival space of the secondary cloud merchants.
Previous experience shows that whenever the head cloud merchants start a price war, the secondary cloud vendors are the most likely to become the "pond fish" affected by the war, and many small cloud vendors have disappeared on the battlefield before. For a long time, price advantage has been the main means of competition for these secondary and tertiary cloud providers. When the price advantage is lost, the secondary cloud provider will face the crisis of being shuffled.
Basic service "customer acquisition"
Big model "take all"
Whether it is Alibaba Cloud, Tencent Cloud, or Mobile Cloud, most of the product lines of the three cloud providers involved in price reduction come from basic applications such as storage and cloud servers.
"The basic applications between cloud providers are actually similar in capabilities." An internal employee of the cloud merchant said that this is also the main reason why the cloud merchant fell into local price competition.
Another industry insider told the "IT Times" reporter that in the public cloud market competition, in order to avoid price competition, it has become a common practice to integrate other channel resources of brands to add code to their own cloud products and cloud services.
After years of development, the cost of upfront hardware construction investment is being diluted over time, and the marginal cost of servers, storage and other products has been very low. When these basic products lose enough bargaining space, it may be a better path for cloud merchants such as Alibaba and Tencent to find other selling points.
While Alibaba Cloud announced its price reduction, Alibaba Group's Chairman and CEO and Alibaba Cloud Intelligent Group Chairman and CEO Daniel Zhang released the new technology architecture of Alibaba Cloud Computing, namely "IaaS + PaaS + MaaS". The IaaS layer focuses on computing power; The PaaS layer is more related to software, big data, machine learning platform services, and of course, there are also services such as underlying hardware; MaaS, Model as a Service. This new architecture replaces the traditional SaaS layer with a MaaS layer, which is eye-catching.
In the view of senior media person Wang Ruchen, this change implies a huge innovation and upgrade, that is, MaaS and large models will transform the top application layer of cloud computing - that is, the SaaS layer. Future application generation models will impact or even continue to disrupt existing software applications and services. In short, the big model is the "killer app" of Alibaba Cloud.
Although the actual effect of Alibaba Cloud's large model has not yet been tested by the market, the large model has become an effective drainage method at this stage.
At present, Alibaba Cloud and Baidu Cloud will rely on their respective groups' first-mover advantages in the field of large models and find ways to transform them into differentiated competitiveness. More than 150,000 companies of Baidu Group have applied for the internal test of Wenxin, and more than 300 ecological partners have participated in the internal test. In terms of Alibaba Cloud, Daniel Zhang revealed that more than 200,000 enterprise users have applied to access the "Tongyi Qianwen" test, covering almost all emerging and traditional industries.
When large models, especially MaaS, become the new core of Alibaba Cloud's intelligent ecosystem and reduce the cost of basic services, it will also become a "high-dimensional traffic contact point" that attracts enterprises to enter large-model services.
Operator cloud should be the "market leader"
Limited-time price reductions may become normal
When the news of Alibaba Cloud's price reduction reached the ears of telecom operators who also entered the cloud computing field, it became a different story. A number of operator cloud insiders told reporters that after Alibaba Cloud cut prices, wait-and-see was the general attitude within the company, and what really provoked the nerves of operator clouds was the price reduction of mobile cloud on the evening of May 16.
That night, Mobile Cloud announced a price reduction on the official WeChat public account, with a maximum reduction of 60%, becoming the first operator cloud to announce a price reduction. Although, the mobile cloud labeled this price cut as a "limited-time offer". A state-owned cloud insider told reporters that after the mobile cloud announced the price reduction, whether its own products will be reduced in price to follow up has become a topic of concern within the company.
From the timeline, the price reduction of mobile cloud closely follows Ali and Tencent, but on May 16, the annual May 17 World Telecommunication and Information Society Day has been an important day for the three major domestic operators to release new products and launch new services, which is equivalent to announcing price reductions on the eve of operators' most important festivals. In this regard, this price reduction is not so much a mobile cloud following the trend, but a preemptive opportunity for the mobile cloud.
A cloud agent told the "IT Times" reporter that due to the late entry of mobile cloud, its market popularity is not high. He believes that the price reduction of mobile cloud is not to compete with enterprises such as Alibaba Cloud, but to use the price reduction to create noise, attract government and enterprise customers, and expand its market awareness.
From the perspective of market competition, Alibaba Cloud and Tencent Cloud are not direct competitors of mobile cloud. Compared with the public cloud market, the government cloud is the main battlefield of mobile cloud. Data show that China Mobile currently undertakes more than half of the country's provincial-level government clouds. Tianyi Cloud and Unicom Cloud, which also have a state-owned cloud background and operator identity, are the opponents it wants to challenge.
Although many industry insiders believe that the price reduction of mobile cloud is just a "stone to ask the way". However, it is also true that the mobile cloud takes on a lot of pressure on marketing metrics. On April 25, at the 2023 Mobile Cloud Conference, Wu Shijun, general manager of the Mobile Cloud Competence Center, said that in the next three years, Mobile Cloud will strive to exceed annual revenue of 150 billion yuan.
Obviously, the target of the operator cloud is the market leader.
According to financial report data, Alibaba Cloud Intelligence, which currently leads the domestic market share, has a total revenue of only 77.203 billion yuan in fiscal 2023. According to China Mobile's annual report, in 2022, the growth rate of mobile cloud business will exceed 100%, and the annual revenue has reached 50.3 billion yuan, which is close to China Telecom's Tianyi Cloud's 53.7 billion yuan. To achieve the annual revenue target of 150 billion yuan, mobile cloud must maintain the current extremely high business growth rate.
Only the government cloud market can support such a large market space. A relevant person in the operator cloud market told reporters that compared with the project target of hundreds of millions of yuan in government cloud, the public cloud project of four to five million yuan is already a large order.
In the market competition, price has always been one of the main strategies of mobile. A cloud provider who participated in the bidding at the same time as the mobile cloud revealed that among several mainstream cloud providers, the mobile cloud has the lowest price, only half of the bidding price of some cloud providers.
At present, Tianyi Cloud and Unicom Cloud have not yet made a strategic response to the price reduction of mobile cloud. However, industry insiders believe that under the fierce competition, the limited-time special price of mobile cloud may be upgraded to normalization in disguise. The war in the cloud computing market is burning in all corners of the digital market of government and enterprises.
Typesetting / Ji Jiaying
Image/ Alibaba Cloud, Tencent Cloud, Mobile Cloud, Oriental IC
Source: IT Times public account vittimes
E N D