Alibaba's Ma Yun called cloud computing the future savior of his e-commerce group. "our own company is full of confidence and hope in cloud computing," he said in support of cloud computing. We think these data are useful to us and more useful to society. " He said。 Ma Huateng, Tencent's chief executive, admitted that one day companies might want to be in a third party.[计] serveHe said, "Maybe you'll be in the'Avatar'era in a few hundred or a thousand years, and that's really possible. But it's still too early."
He said it was too early to explore the opportunity.
Nearly 10 years later, Ma Huateng changed his attitude towards cloud computing business. Tencent is determined to surpass Alibaba, who has made a huge lead in cloud computing. One Tencent executive said: "this is the goal of our company." Ma Huateng made it clear that he was willing to invest 10 years to achieve this goal. "
Industry insiders say Tencent is determined to catch up and is attracting more customers by investing huge amounts of money in cloud computing. Tencent's understanding is that these customers will use Tencent's services and attract more customers. However, Alibaba will not let Tencent take market share easily.
Tencent is building its largest data center in Guizhou.
Cloud computing, which uses remote server networks to store, manage and process data, has become a thriving business. For example, by accessing computing power on demand through cloud computing, streaming media companies like Youku can cope with the surge in audiences after the launch of Chang'an Twelve Hours. It can also provide many Web-based services.
According to market analysis firm IDC, global publicCloud servicesAnd infrastructure spending will reach $210 billion this year, compared with less than $170 billion in 2018.
China is the second largest public cloud market in the world after the United States. It is estimated that China will spend $10.5 billion on cloud computing this year. Analysts say the $10 billion battlefield is largely reserved for domestic competitors.
At present, Alibaba is the undisputed leader in cloud computing. But IDC data show that Tencent is making progress. In the area of IaaS (Infrastructure as a Service), Tencent's market share reached 11.5% last year. IaaS is one of the most popular cloud services in China. Although Tencent's current market share is far belowAliyun43% but improved from 7.4% in 2016.
Elinor Leung, head of telecommunications and Internet research in Hong Kong at CLSA, a brokerage firm, said the market share gap between the two companies was expected to narrow further. Although Liang Xiangyi believes that Alibaba may maintain its leading position partly due to its first-mover advantage, she also says that Tencent has strengthened its technological breakthroughs and has advantages in areas such as games and video streaming media.
"I think Tencent can be a competitor in the market," Liang said.
Ali, Tencent in the Chinese cloud services market share, Ariyun is still in the leading position in the market share.
Tencent and Alibaba now have a market capitalization of nearly $500 billion, and their competition is no stranger to each other. From Internet advertising to the food takeout market, the two companies compete in all aspects. Alibaba controls 36 per cent of online advertising sales in China, while Tencent controls 15 per cent, according to Bernstein (Bernstein), an investment bank. At the same time, Tencent beat Alibaba in food takeout, with 61 percent of Chinese users placing orders through Meituan Dianping, supported by Tencent, compared with 37 percent of users who use Alibaba's ele.me.
But the risk of cloud computing is much higher. Industry observers say these services will not only generate billions of dollars in revenue, but will also reshape China's technological landscape, as future urban development, industry progress and technology will depend on cloud computing.
"Cloud computing is the future trend," said Ethan Qi, an analyst at Counterpoint Research in Beijing. With the help of cloud service providers, companies will more digitally operate their businesses. "I believe cloud computing will be a key driver of Tencent and Alibaba's future growth," he said.
At present, both cloud computing businesses are losing money. Although Alibaba's cloud business revenue grew rapidly, it lost more than 1 billion yuan ($145 million) in the first quarter of this year alone. Tencent did not disclose its losses.
Overall, the profits of these technology giants have increased dramatically in recent years. Tencent made a net profit of 78.7 billion yuan last year, up from 23.8 billion yuan in 2014. Alibaba earned 87.6 billion yuan in fiscal year 2018, up from 24.2 billion yuan four years ago.
However, cloud computing is the key for the two companies to expand from consumer-centric business to industrial customer-oriented business. As the growth of consumer business begins to slow down, this is a crucial transformation.
Although the sales of cloud services account for only a single digit of Alibaba's revenue, Zhang Yong, chief executive of Alibaba, said that the growth rate of cloud services business will even exceed that of e-commerce. In an interview with CNBC last year, Zhang Yong said, "I think cloud computing will become... Alibaba's main business in the future.
At the same time, Tencent made cloud computing one of its core businesses in its organizational restructuring in September last year, alongside games and social networks. The entertainment giant promised to become a "digital assistant in all walks of life".
Ethan Qi said that strong cloud business would give these companies more advantages in other areas. "Alibaba and Tencent are major players in big data and artificial intelligence," he said. "Cloud services will give them an opportunity to demonstrate their technology."
A simple way to understand this is to treat the cloud as a public infrastructure like a highway, and cloud-based services are service areas along the way. Customers already on the Tencent Highway are more likely to shop in the stores they open, rather than bypass Alibaba.
Later, Tencent gained a foothold by focusing on the areas it was familiar with. Tencent is the largest publisher of games in China. The company said it had persuaded 75% of game companies to use its cloud services.
As a micro-telecom operator with 1.1 billion active users, Tencent has also taken advantage of its social network advantages. At least 160,000 stores, restaurants and other businesses that use Wechat to interact with customers also use Tencent's cloud services.
But to get Aliyun out of the market, Tencent knows it has to do better.
Shanghai Anchang Network Technology Co., Ltd. is a software developer based on cloud computing. It is also a company that has changed from Aliyun to Tencent Cloud. "Tencent has invested 100 million yuan in our business," said an Anchang network executive who declined to be named.
Although Tencent's cloud technology has not surpassed Aliyun's, the executive said, "My boss is eager to get this investment." So Anchang gave up Aliyun, bringing more than 2,000 companies using its software to Tencent cloud services.
The deal also gives Anchang Internet the impetus to promote Tencent's cloud services: the company will help Tencent promote a deal worth 100 million yuan annually, otherwise it will have to pay a fine. "Tencent has recruited many business partners like us," the executive said. "That's why it can rapidly expand its market share."
Analysts said that although Alibaba is far ahead, a large part of China's cloud service market still needs to compete.
Rachel Liu, Senior Research Manager at IDC, said Alibaba's retail business and Tencent's entertainment business were "comfort zones" for their respective cloud services. But in dealing with manufacturers and other customers, the two competitors stand at the "same starting point". "Their success in these areas will depend on how fast they can build an ecosystem and how attractive their ecosystems are."
In May this year, Tencent held the first Tencent Global Digital Ecology Conference in Kunming, China. A Tencent engineer showed visitors a series of intelligent locks, indoor humidity monitors and other networking devices. All of this is built on Tencent cloud platform, and developers don't have to pay a penny for it.
"We want to provide solutions for all Internet of Things equipment manufacturers," the Engineer explained. According to his logic, anyone can use Tencent's free platform to develop their own software, but companies addicted to this convenience will put forward higher demand for services. In turn, this will give Tencent the opportunity to charge for its services.
In addition, once a large number of equipment manufacturers join the platform, software developers serving the Internet of Things industry will follow suit, and Tencent will be able to get a piece of each software sale.
To achieve this, the engineer said Tencent was rapidly expanding its development team, hiring at least 20 to 30 new employees in the first five months of this year.
Despite Tencent's efforts, another industry analyst said Alibaba was still in a better position to win over Internet of Things equipment manufacturers, at least for now. The anonymous person said that Alibaba has accumulated "strong expertise" in cloud computing over the years and is ready for future battles.
Since the launch of cloud business in 2009, Alibaba has built a team of more than 10,000 employees in this field. By contrast, Tencent has only about 4,000 people working on cloud services.
However, Tang Daosheng, senior executive vice president of Tencent's cloud business, remains confident. Although he also acknowledged that Tencent's cloud computing business had been losing money, he told reporters at a conference in May that Tencent would invest more money. "We see huge demand for cloud computing and infrastructure in the market," Tang said. "We have increased our investment in cloud business and all other aspects related to this area... We will continue to do so."