Text | Zhou Tian Finance
Original production by Zhou Tian Finance
An advertisement titled "The Cloud I Use is Alibaba Cloud" appeared in the WeChat Moments, and the WeChat Moments Alibaba Cloud advertisement shows the "circle of friends" of Alibaba Cloud - Chen Xiangdong, the founder of Gaotu Group, Jiang Nanchun, the founder of Focus Media, and Wang Xiaochuan, the founder of Baichuan Intelligence, appeared one after another, and they respectively described the three factors for choosing Alibaba Cloud: cost, large model and going overseas.
01 Behind the cost decline
Moments advertising can be understood as a strong signal to enter the broader small, medium and micro sinking market, and the prediction is that large models will rapidly lower the threshold for application development, and atomized and fragmented applications will emerge. This will result in the creation of a large number of small and medium-sized independent application developers. Some technical teams of 5-10 people can also develop popular applications that solve the specific needs of users in a short time.
The decisive premise behind it is the price and cost barriers, and Alibaba Cloud has taken the lead in launching a cost war. More than a month ago, the news of "Alibaba Cloud's price reduction across the board is up to 55%" was on the hot search;Then Luo Yonghao personally brought goods to Alibaba Cloud in the live broadcast room,The discount is huge,One of the basic cloud service packages is priced less than 1% off as low as 99 yuan。
This "promotion" is different from the traditional "price war", judging from its several cloud service products with large drops, the targets are targeting private enterprises, small and medium-sized enterprises and even super individual users. Only the public cloud can produce scale effects and force prices to gradually decline.
Although, at the moment, the public cloud is still a loss-making route proposition, and a considerable part of the immediate benefits will be lost. Compared with "public clouds" with higher "trust barriers", large procurement customers such as the financial industry and central state-owned enterprises are more likely to accept "private clouds" that can control infrastructure. Moreover, many enterprises already have customary software before going to the cloud, and some private cloud tools can build a cloud based on the existing software and hardware resources of the enterprise, thereby reducing the cost of learning and acceptance, so the public cloud is not advantageous in grabbing the minds of users.
The temptation to surrender to reality is enormous. In the face of a mature and huge government and enterprise market, a considerable number of Chinese cloud vendors lack the right to speak in the formulation of rules and the determination to maintain restraint, and it is easy to fall into low-level vicious competition for business relationships. Internet cloud vendors need huge strategic determination to jump out of this mud war and focus on public cloud technology investment.
But at the heart of the generational gap is the public cloud. A number of digital enterprise executives have long said to the media that public cloud must be the right direction for industrial technology. Even if you face short-term pain, you should stick to the long-term investment in public cloud as a technical direction. If Chinese cloud vendors are greedy for short-term profits and devote a lot of energy and manpower to the government-enterprise integration business, they will become "contractors" in the guise of technology companies and degenerate into engineering construction enterprises. It has never been as innovative as Microsoft Cloud, Amazon AWS, and Google Cloud.
Fortunately, Alibaba Cloud's series of actions in 2024, including Moments advertising, let us see its long-term determination to invest in the public cloud. The trend is also on the side of Alibaba Cloud, and the reality of traditional software and integration business in China's cloud market has the opportunity to be reversed. AI and big models will be a game-changer for the cloud computing industry. Just like the power grid, the wider the access range, the more it can hedge against short-term peaks and fluctuations, and the stronger the stability and economy. When new productive forces such as Gaotu and Baichuan appeared, private cloud could no longer meet the new needs, and the public cloud finally ushered in an explosive period, and the production relationship of the cloud urgently needed to be rewritten.
In some businesses that only need the support of high-powered servers at certain times, the public cloud can quickly ramp up or down resources based on business needs. This kind of elastic scaling capability cannot be possessed by private clouds, so it can better meet the basic needs of "cost-effectiveness". A typical case is that in the process of development, Gaotu Education Technology found that with the growth of users, things that had just been online for one or two months had to be reconstructed, and the abandoned links were not destroyed in time, forming a series of historical problems. Engineers from the technical department of Gaotu found that "after finally migrating the data to the Alibaba public cloud, this decision has skyrocketed the cost by 57%".
In addition to solving the problem of live broadcast business load through the public cloud, Gaotu also uses the public cloud to streamline the application layer and solve the current situation of technology proliferation with the coexistence of multiple engines. At present, Gaotu Education processes more than 30 billion pieces of data per day, with a historical peak of about 1 million pieces per second, and a data delay of less than 1 minute. At the same time, the ratio of its technical service fees to revenue decreased by 72% in Q1 2024 compared with the same period in 2021. That's the new quality of productivity unlocked through the public cloud feature.
Therefore, the high scalability provided by the public cloud will lead to major changes in business models, industry ecology, and social benefits, and is also conducive to the formation of a cloud ecological environment for the rapid growth of innovative enterprises.
02 Subscribe to ultra-large computing power
Another sign of the emergence of new productivity is the wave of generative AI set off by ChatGPT, and we are suddenly discovering that cloud computing is the twin of AI.
According to data from the China Academy of Information and Communications Technology in 2022, cloud computing accounts for more than 60% of the computing power structure in the United States, while only 28% in China. However, the computing resources deployed by privatization are locked in their respective deep house compounds, and the utilization rate generally does not exceed 5%.
For example, OpenAI's GPT-4 is deployed on Microsoft Azure, which provides more than 20,000 NVIDIA A100 computing power with the public cloud, and Anthropic's Claude3 is deployed on Amazon AWS, and AWS provides more than 16,000 NVIDIA H200 computing power with the public cloud. The training of large models is based on the computing power cluster of 10,000 cards, and the small and scattered computing power locked in the courtyard of the deep house cannot meet the training requirements.
The public cloud was born for the era of large models. Large models require huge IT spending to procure GPU (graphics card) chips. Managing GPU computing power clusters also requires a higher technical threshold, which is not just an algorithm problem, but also includes many complex and systematic projects such as the underlying huge computing power, network, big data, and machine learning, which only the world's leading public cloud vendors have such technical strength.
In this AI arms race, Baichuan Intelligence, a leader in China's generative AI, is fortunate to have access to Alibaba Cloud's computing power cluster as soon as possible, so that Baichuan can release a large model almost every month, and this efficiency has reached the industry-leading level.
On the public cloud platform, not only the demand for computing power is met, but on the other hand, all enterprises under one cloud can share the latest scientific and technological achievements. Baichuan Technology has used the Alibaba Cloud Magic Community to attract a large number of developers to jointly optimize and iterate on the large model, and at the same time discuss more landing scenarios. Historically, software industry innovation is often born on the public cloud, rather than the private cloud. Public cloud is easy to cultivate a unified and open ecosystem, rather than a fragmented and closed island.
The public cloud provides a rapidly growing cloud ecosystem for large models. At present, half of China's large models run on Alibaba Cloud, and the innovative ideas of more than 2.7 million AI developers have been realized on Alibaba Cloud, and countless model users have benefited from it. With the complementarity of AI and public cloud, an innovation ecosystem based on public cloud is beginning to take shape.
03 Fall all over the world
Cloud services themselves have no boundaries, especially when Chinese innovative enterprises go global, and the going overseas of the cloud has become a deterministic trend that accompanies it. In the global business of overseas enterprises, high concurrent processing capacity and low latency response are extremely prominent needs, especially for large overseas enterprises: programmatic advertising, social applications, games and other applications.
Focus Media has become a big beneficiary of cloud going overseas. Focus has millions of elevator posters in Southeast Asia, South Korea, Japan and other countries and regions that need to be delivered accurately, but the differences in the business environment of various countries and the fierce local market competition restrict the development of Focus Media in overseas markets. If you follow the traditional server model to expand your business overseas, you not only have to overcome the language barrier, but also need to recruit a large number of personnel to support the corresponding operation and maintenance work. So Focus Media needed a lower-cost way to improve its ability to reach consumers, and on the other hand, it needed a smarter communication channel to increase the depth of service to key customers.
Therefore, cloud computing products with wide distribution, high performance, high throughput, and low latency have become focus solutions. Wu Song, R&D Director of Focus Media, once shared their experience of "going to the cloud" at the Alibaba Cloud Cloud Native Combat Summit, "By using Alibaba Cloud's IOT service, we can maintain the screen connection rate at about 95%, which greatly improves the team's work efficiency. 」
On the other hand, after using Alibaba Cloud's serverless lifecycle management platform, the overall DevOps efficiency has been increased by 80% and the computing cost has been reduced by 50%. In the past, Focus would deploy a lot of servers and GPU servers to realize the image algorithm business, but now it is no longer needed, and the elasticity effect has been improved by more than ten times. It is also through the use of Alibaba Cloud's global deployment of cloud platforms that a digital system that can respond quickly, so that Chinese companies like Focus have the ability to cope with fierce competition in overseas markets, which is also a microcosm of Chinese enterprises "Tengyun" going overseas in recent years.
Alibaba Cloud has opened 89 availability zones in 30 regions around the world, serving more than 4 million customers in more than 200 countries and regions around the world, serving more than half of the A-share listed companies and 80% of China's technology innovation enterprises.
Cloud computing allows enterprises to quickly deploy and adjust computing resources according to their own business needs, without the need to invest huge amounts of money in the construction of data centers in the early stage. For overseas enterprises, cloud computing provides an asset-light operation model, which greatly reduces the threshold for entering the international market. With the deepening of the Belt and Road Initiative, Alibaba Cloud's overseas market has also grown rapidly, driving more than 220,000 Chinese enterprises to go overseas on a large scale, serving more than 5 million customers in more than 200 countries and regions around the world. With the assistance of cloud computing technology, many enterprises have even realized a global "cloud marketplace" without overseas residences, thereby greatly reducing costs and time overhead, and some enterprises using Alibaba Cloud services have achieved a growth rate of more than 100% for three consecutive years.
In terms of the natural physical characteristics of cloud computing, public clouds are larger and more efficient, and cloud-based architectures have a stronger ability to expand into the global market, while private clouds have almost zero ability to radiate outward. Today, when countries are gradually listing cloud computing as a "specific important commodity", the global layout of public cloud has become a compulsory course.
With the advent of large-scale model reform, the global AI arms race is intensifying. The low penetration rate of public cloud has increasingly become a bottleneck limiting the competitiveness of the industry. Cloud is the core infrastructure, and it is as important as 5G, chips, and AI. Whether the public cloud is strong or not affects the healthy development of the computing industry, the innovation rhythm of the software industry, and the artificial intelligence arms race.
On the whole, although the gap between the cloud computing industry between China and the United States still exists, the core competitiveness and international influence of Chinese cloud computing enterprises are also continuing to improve. As the old saying goes, a ten-year gap doesn't necessarily take ten years to catch up.
Cloud computing is an aggregate process, not a decentralized process. Adhering to the principle of public cloud first is the only way for Chinese cloud vendors to catch up with international cloud vendors, and it is also the only way for Chinese AI players to catch up with the top AI players in Silicon Valley.
Alibaba Cloud is continuously reducing costs and lowering the threshold through long-term investment in public cloud technology, so as to leverage the willingness of low- and medium-to-mid-stream enterprises to go to the cloud, support the AI innovation ecosystem with large computing power, and lead China's cloud computing back to the road of public cloud.
In the words of Liu Weiguang, President of Alibaba Cloud's Public Cloud Business Unit, "As a leading cloud computing company in China, we hope to drive the industry to accelerate together, expand the market together, and promote the value of cloud computing to enterprises. In order to achieve this goal, Alibaba Cloud continues to deepen its technology pool, go overseas for enterprises, develop large models, and at the same time, continue to release market dividends, and then attract new users to join the data center, enhance the scale effect, expand the boundaries of public cloud, and repeat the cycle, it will form a positive closed loop of cost-scale-resource efficiency, and finally promote China's cloud computing market into the public cloud explosion period.