Over the past ten years, my personal experience has been in the field of digitalization of large enterprises. The essence of enterprise digitalization is to reduce uncertainty, optimize processes, reduce costs and increase efficiency, find the best practices of business and organization, and then build on the basis of certainty Do large-scale expansion on the Internet to bring maximum efficiency to the society.
However, the software industry itself is a field with strong "uncertainty". Although digitization sounds grand, it is actually not as good as the construction industry in terms of engineering efficiency. A skyscraper with a cost of one billion may be built in half a year, but a digital project with a scale of tens of millions may take several years to bear fruit. It is the demand that may take a year to discuss. We often encounter various "uncertain" situations in our daily projects. The demand is very high but the project budget is limited. The user who puts up the demand is not necessarily the decision maker who pays the bill. Information errors, deviations from translation of requirements into codes, frequent changes in the requirements at the initial stage of the contract until they are about to go online, adjustments in the customer organization bring difficulties in acceptance and recovery of final payments, and it is difficult to accurately match revenue and costs. These "uncertainties" plague The project includes all teams of Party A and Party B. Only by clarifying the relationship between requirements, contracts, financial indicators, solutions, projects, engineers, products, and codes, and analyzing a single project clearly, can an enterprise support software transactions for more customers and more products.
These are the "pain points" of software. Software is indeed different from hardware; if hardware is compared to a solid, then software is as flexible as liquid. As long as a suitable transaction and transportation carrier is found for "liquid", the most valuable business may still be a company that sells "liquid". Coca-Cola in the United States and Moutai in China. It is precisely because of the flexibility of software that it can carry more scenarios. In the IT field, the market value of software companies is higher than that of hardware. Whether it is a PC manufacturer for individuals or a CPU manufacturer with a core moat, it is estimated that The value is not as good as the software company of the operating system.
But if the software transaction process cannot be made clear and simple, customers will be more inclined to buy hardware. In order to reduce the uncertainty of software transactions, some companies have moved towards SaaS, which is priced by product, and others have moved towards consulting services, which are priced by time. Even in 2022, when the capital is cold, the market value of SaaS product companies represented by Salesforce exceeds 155 billion U.S. dollars, while the market value of Accenture, which mainly focuses on consulting services, exceeds 190 billion U.S. dollars. In addition, there are also software in some fields that are billed by traffic. For example, some management software charges according to the number of employees or a certain percentage of enterprise revenue.
The lower the cost of transactions, the clearer the logic, the easier it is for companies to make decisions, the lower the differences between buyers and sellers, and the larger the market space. Transactions based on traffic, information and credit may be the real form of Web3.0.
From various indicators, the development of China’s SaaS industry is probably at least ten years later than that of the United States. As can be seen from the figure below, Salesforce’s revenue in 2010 reached 1.5 billion US dollars, exceeding 10 billion yuan. maintained a rapid growth every year. In today's China in 2022, there are not many SaaS companies with revenue exceeding RMB 1.5 billion.
However, because China is still developing rapidly, enterprises will face new opportunities and difficulties every day, and everyone is crossing the river by feeling the stones in the new challenges, so there will always be new "customization needs", among which there must be many Looks like "unreasonable" demand. In the next 5-10 years, China's IT infrastructure will undergo great changes, and domestic operating systems, databases, and CPUs will gradually enter various industries. And because of the differences in economic systems, it can be expected that for a long time to come, China's SaaS and software industry will take a different path from that of the United States.
Similar to the automobile industry, due to insufficient historical accumulation and policy patent restrictions, it may be difficult for Chinese manufacturers to surpass European, Japanese and American manufacturers in the field of gasoline vehicles in a short period of time. And because the lack of oil resources is not suitable for the large-scale development of high-performance gasoline vehicles, many high-tech technologies have no application scenarios, and no manufacturers are willing to invest in breakthroughs. In the field of electric vehicles, there is also a big gap between the current domestically produced cars and Tesla in the field of autonomous driving. Although domestic electric vehicles have made rapid progress, they will also face the problems of urban charging piles and infrastructure transformation in the future. It will still be difficult to satisfy every family with convenient charging piles for a period of time in the future. Especially during the National Day holiday that just passed, it was difficult for the infrastructure of charging piles during long-distance travel to meet everyone's needs.
However, Chinese car companies represented by BYD and other companies have innovatively found the best practice in the field of hybrid electric vehicles within a specific time window and scenario constraints. Although the two systems may increase maintenance costs, it may be a better model under the two constraints of lack of oil resources and insufficient infrastructure of urban charging piles. Gasoline-electric hybrids not only gradually expanded their market share in China, but also began to be exported overseas.
If we compare traditional enterprise management software to gasoline cars and SaaS to electric cars, a single model may make it difficult for Chinese software companies to surpass European and American giants in a short time. Compared with SAP and Oralce, there is a big gap between China's privately deployed software, and there is also a big gap between new SaaS software companies and Salesforce. Complexity is the greatest enemy of software engineering, so whether it is privately deployed software or SaaS software, European and American companies have done a good job in software version management and code iteration. Customization will increase the complexity of the software and form various software versions, which brings great difficulties to the large-scale development of Chinese software companies. On the premise that customization will continue to exist on a large scale in the future, how to develop a software industry with Chinese characteristics has become a problem that all enterprises must think about.
In the software field, everyone is also looking for a "hybrid model" under different modes such as SaaS, customized development, consulting services, and traffic billing, and finds the best practices suitable for the "software transaction" scenario, so as to achieve real Curve overtaking. Will the combination of super platforms such as SaaS-based enterprise WeChat, DingTalk, and Feishu, and privately deployed ERP and low-code platforms be a hybrid model with Chinese characteristics?
In order to speed up the development of new energy vehicles, China proposed in the "New Energy Vehicle Industry Development Plan (2021-2035)" that by 2025 new energy vehicle sales accounted for 20% of the target. According to data released by the China Association of Automobile Manufacturers, the production and sales of new energy vehicles accounted for 24% of the total sales of passenger vehicles in the first half of 2022, and the target has been reached ahead of schedule. Among them, the proportion of new energy vehicles in Chinese brand passenger vehicles has reached 39.8% %. In 2021, China's new energy passenger vehicles accounted for 52% of the global new energy vehicles, and in July 2022, this figure has reached 68%.
If someone told everyone in 2015 that in 2025-2030, Chinese auto brands hoped to catch up with or even surpass their counterparts in Germany, Japan and the United States in terms of technology, it would definitely be considered a fantasy. The price of high-end imported models in China was 2-3 times higher than that in the United States, and they were also very popular. It was difficult for Chinese brands to be attractive to high-consumer groups. 10-15 years seems to be a short time, but there will be various variables. For those companies that can seize the opportunity and accumulate continuously every day, there can be earth-shaking changes.
If you go back to around 2015, the gap between China and overseas in the automotive field and in the software industry, which field do you think is the bigger gap? If in 2022, it is predicted that Chinese software companies can surpass their counterparts in Europe and the United States from 2032 to 2025, is it possible to achieve it? The cold winter of capital in 2021 has brought a great impact to many SaaS software companies. Only by never giving up can you have a chance to surpass; 10 years seems short, but it is also very long, long enough to achieve a bigger goal.