On the morning of April 26, at the 2023 Alibaba Cloud Partner Conference, Zhang Yong, chairman and CEO of Alibaba Group and CEO of Alibaba Cloud Intelligent Group, appeared again.
At the end of 2022, after Zhang Yong chose to serve as the CEO of Alibaba Cloud Intelligence in person, he pointed out in a letter to all employees of the Alibaba Group that he hoped that the keyword for Ali in the new year would be "advance". He asked Ali to insist on being a "good" self, being the core of the development of a "good" enterprise, creating good customer value, and undertaking the great mission of leading development, creating jobs, and participating in international competition.
After Zhang Yong took charge in person, how Alibaba Cloud will spend this year with the keyword of "progress" has always been concerned by the outside world. After the Alibaba Cloud Summit announced on April 11 that all Alibaba products will be connected to the Tongyi Thousand Questions model in the future, the Alibaba Cloud Partner Conference was held again in less than half a month.
At this meeting, Alibaba Cloud revealed its three major "weapons" represented by the largest price reduction in history, "being integrated as it is said to do" and co-creating exclusive large models with partners, laying the groundwork for Alibaba Cloud's "offensive". This stage sets the tone.
These three actions formed the flywheel effect of Alibaba Cloud's offensive. Because of the cost advantages of technological dividends and scale, Alibaba Cloud has sufficient room for price cuts. The price cuts and the opening of product capabilities will attract more partners to cooperate with Alibaba Cloud and expand the market. , resulting in greater price space. Under the current wave of intelligence, Alibaba Cloud can provide partners with more advantageous computing power prices and large-scale model capabilities, and promote the industrial implementation of AI large-scale models, which will also drive a larger cloud market.
In his speech, Zhang Yong said that this is not just a sales channel conference, but about Alibaba Cloud's strategic thinking. "Alibaba Cloud is a cloud computing product company, and ecology is our foundation." Zhang Yong said that investment in partners and ecology will be one of the most important strategies of Alibaba Cloud in the next ten years.
Lower prices, lower prices
Alibaba Cloud once again lowered the price of its core cloud products, which shocked many audiences. It has been less than half a month since Alibaba Cloud announced a price cut last time.
The magnitude of the price cut this time has been called "Alibaba Cloud's largest price cut in history" by the outside world - its core product prices have been lowered across the board, and computing, storage, network, database and security products have dropped by as much as 50%. The price adjustment will take effect on May 7. For reference, the prices of elastic computing 7th generation instances and Yitian instances are reduced by up to 20%, the price of storage OSS deep cold archive is reduced by 50%, the price of network load balancing SLB is reduced by 15%, and the price of database RDS Yitian version is reduced by up to 40%. Price reduction determination.
The latest "China Public Cloud Service Market (Second Half of 2022) Tracking" report released by International Data Corporation (IDC) shows that in the second half of 2022, Alibaba Cloud will continue to rank first in the domestic public cloud IaaS market. As the number one cloud computing vendor in China and the top three in the world, Alibaba Cloud's price reduction will further expand the user base and scale of public cloud, and increase the market penetration rate of cloud computing.
In fact, in the past ten years, Alibaba Cloud has continued to lower the "use threshold" of cloud computing. Since 2013, the computing power cost provided by Alibaba Cloud has dropped by 80%, and the storage cost has dropped by nearly 90%.
Unlike conventionally understood simple and crude price wars, cloud computing follows Moore's Law, which is common in the technology industry. With the development of science and technology, the hard disk capacity is getting larger but the price remains the same, and the data package of the mobile phone is getting larger and the Internet speed is faster but the price is lowered. It is the norm in people's life. This also means that for cloud computing that relies on computing resources, storage resources, and network resources, it is entirely possible to maintain or even improve service quality in the process of continuous price reduction, and to reduce prices healthily and continuously.
Scale effect and continuous investment in self-developed technology are the foundation for continuous price reduction.
Taking Amazon AWS as an example, through the self-developed data center scheduling system and self-developed chips, AWS has successfully reduced the cost of computing power through the improvement of computing power performance.
Similarly, in the past few years, Alibaba Cloud has made technological breakthroughs in self-developed cloud infrastructure processor CIPU, self-developed general-purpose server chip Yitian 710, etc. The improvement of cloud computing power and the improvement of the utilization rate of computing resources have made it continue to generate healthy "price reduction" space.
From an ecological point of view, there is actually a greater "ambition" behind the largest price cut in Alibaba Cloud's history. Zhang Yong said that this large-scale price reduction is to return more technological dividends to customers and partners, continue to reduce the cost of using the cloud, and expand the market space of the cloud.
From the perspective of the "big picture" of the cloud computing market, at present, the penetration rate of cloud computing in China's IT market is less than 15%, and the market is far from saturated. The process of reducing prices to distributors and integrators may bring more benefits to Alibaba Cloud High market share, and even a bigger cloud market "cake".
This is because cloud services are typically economies of scale. The cost of cloud computing data center construction and software development is high, and the increase in the number of users will dilute this cost. In the process of continuous price cuts, what Alibaba Cloud expects is to unite more distributors and integrators to expand the user base and scale of the cloud, promote the further transfer of more industries from traditional IT to cloud computing at lower prices, and improve The utilization rate of computing resources drives down the cost of computing power.
In general, what Alibaba Cloud is trying to move towards is a positive cycle in which technological improvements and scale effects are used to release room for profit sharing, and price reductions bring more impetus to technological improvements and scale growth.
Firmly " products are integrated "
Zhang Yong's commitment to "being integrated will do what it says" is a highlight of this conference. On this day, Zhang Yong chose to attend the partner conference and spent a lot of time explaining Alibaba Cloud's future ecological strategy. He said that the core of being integrated is to firmly move towards "integrated products".
Since the introduction of "integrated" in 2019, Alibaba Cloud has begun to think about its own positioning and boundaries, hoping to take a small step back through "integrated" to make room for "partners", and at the same time allow itself to achieve more focused and high-quality growth . The change is that this time, Zhang Yong further explained "being integrated".
Zhang Yong explained that insisting that "products are integrated", specifically, is to insist that the core of Alibaba Cloud's development is to make good cloud computing products, product capabilities are firmly open to the ecology, and industry applications are firmly developed by partners. That is to say, in the future, Alibaba Cloud will focus on some things, and some will be resolutely reserved for "partners".
For small players on the track, the giant's initiative to "draw boundaries" is a long-term benefit to their living space. "We need to give full play to the role of our partners, instead of pounce on ourselves whenever we have an opportunity, so how can others make money?" After the Alibaba Cloud Summit on April 11, Zhang Yong said in an interview that cloud computing also has social and public attributes. As for the question, he pointed out that big companies naturally have a kind of dominance, so they should have empathy, advocate equality, and treat their partners well.
What Alibaba Cloud needs to do is to further strengthen its foundation as a cloud computing product company. Compared with the beautiful data brought by the pursuit of integration and resale, it can be seen that Zhang Yong's enthusiasm for Alibaba Cloud's strengthening of product competitiveness this year is much stronger.
At the conference, Alibaba Cloud announced that Lingyang, which has just been merged into Alibaba Cloud after Alibaba's new round of organizational changes, and DingTalk, which is a coordination and development platform, will also enter the "integrated" sequence.
In addition, cloud-native products including cloud computing and serverless, and large-scale products including Tongyi Qianwen are all in the "integrated" sequence.
With the addition of Lingyang and Dingding, Alibaba Cloud's "integrated" PaaS layer products have become thicker.
According to the "2021 China PaaS Market Research" report released by Haibi Research Institute, the PaaS market size in 2020 will be 28.05 billion yuan, and it is expected to maintain rapid growth in the next five years, with an average annual compound growth rate of 48%. 200 billion yuan. With the emergence of more and more cloud computing customers and many development trends with their own high customization requirements, PaaS products that are made at a higher level and can be configured and extended are obviously better able to meet more needs of the industry.
And although making PaaS thicker requires a lot of R&D investment, and it is difficult to achieve short-term results, Alibaba Cloud is clearly aiming at product differentiation and core competitiveness different from other cloud vendors.
The profit margins that can be brought about by the development of PaaS and even SaaS are extremely impressive. At present, the gross profit margin of domestic cloud vendors is usually around 30%, while the gross profit margin of Amazon AWS and Microsoft Smart Cloud in 2021 will be above 60%. Correspondingly, data shows that IaaS accounts for 70% of China's cloud computing market, while IaaS accounts for 26% of the global cloud computing market. In the process of building a thick PaaS layer and building a MaaS layer, Alibaba Cloud is clearly looking at a future high-quality development with higher profit margins.
At the meeting, Alibaba Cloud and its partners launched eight more joint industry solutions, including One Netcom Office, One Netcom Management, City Security, Cloud Smart Hospital, Smart Park, Semiconductor EDA Cloud, Procurement and Marketing Supply Chain, and Digital Factory.
These solutions, which are highly integrated with the core products of Alibaba Cloud's PaaS layer, are allowing the industry to see more possibilities.
The " big models " of all walks of life are coming?
Large models are a hot topic these days. Half a month ago, Zhang Yong's declaration that "all software is worth doing again with a large model" once reminded the industry of the infinite possibilities of large model applications. At this meeting, Alibaba Cloud released the "Qianwen Partner Plan", inviting a group of top ecological partners in the industry to create a large-scale industry model.
Different from the 2C chat scene that the outside world understands about large models, Alibaba Cloud believes that the core value of Qianwen will be reflected in the industry scene and industrial implementation, making AI more popular.
Zhou Jingren, CTO of Alibaba Cloud, revealed that after the release of Tongyi Qianwen, more than 200,000 corporate users have applied for access to the Qianwen test. The demand for large-scale models dedicated to enterprise cooperation is very hot, covering almost all emerging and traditional industries.
Take Kunlun Data Intelligence, which became the first batch of "Qianwen Partners" as an example, what they expect is to integrate the knowledge and experience of the petrochemical industry into the exclusive large model, and use the powerful analysis and cognitive capabilities of the large model to help the whole industry more efficiently Process production and operation data, and provide decision-making reference in the whole process of petroleum exploration and development, refining and chemical industry, and refined oil sales.
Industry insiders believe that in the field of petroleum exploration and development, the use of large models for automatic processing of two-dimensional and three-dimensional geological data, automatic interpretation of logging data and automatic generation of graphics, automatic prediction of production indicators, intelligent decision-making and optimization of development plans, mining and application of development test data , predictive maintenance of production equipment, etc.; refining and chemical industry for automatic optimization of production planning and production scheduling, production process process optimization, production safety warning and alarm, etc.; sales forecast analysis and automatic vehicle deployment in the field of refined oil and natural gas sales , industry models are promising.
In the process of co-creating large-scale industry models with "Qianwen partners" in the future, Alibaba Cloud introduced that the large-scale industry models of Qianwen will have the characteristics of customization, easy integration, fine-tuning, and strong security. Regarding the data security issue that has attracted much attention, Alibaba Cloud emphasizes that each partner will have a secure and isolated dedicated data storage space on Alibaba Cloud, and the data will not be used to train the general version of the Qianwen large model. Other partners and customers also do not benefit from this data.
In such a future scenario, what is particularly worth looking forward to is the huge impetus that large models may provide for industrial digitization.
epilogue
According to the data released by the Big Data Development Department of the National Information Center, as of the end of 2020, the digital penetration rates of my country's primary, secondary and tertiary industries were 8.9%, 21.0% and 40.7% respectively. In 2020, the digital penetration rate of my country's manufacturing industry was only 19.5%. Significant disparities exist across countries. The lack of capital, technology, and talents in the digital transformation of enterprises has become a problem, and the construction and development of industry large models may help many enterprises and industries find replicable, easy-to-promote, and low-cost digital transformation solutions.
Based on the "three axes" of price reduction, integration, and large-scale models given by the Alibaba Cloud Partner Conference, the future blueprint of Alibaba Cloud is unfolding. Through the more inclusive IaaS layer, higher-quality PaaS layer and more leading MaaS layer products, we will continue to expand the cloud market, deepen industrial digitalization, and expand new opportunities for intelligence with partners—different types of "partners" can find their own development path.