Big data industry innovation service media
——Focus on data·Changing business
China's cloud computing is encountering difficulties. At the IaaS level, Alibaba Cloud, Tencent Cloud, etc. are experiencing sluggish growth; SaaS has not developed. In contrast, in the United States, cloud computing as a whole is booming. AWS, Microsoft Cloud, and Google Cloud are larger in size, but their growth rates are not low. SaaS has become highly developed, and there are many SaaS companies with a market value of tens of billions of dollars.
Note: The latest market value of major U.S. SaaS companies is based on the closing data of U.S. stocks on February 15, 2023.
Chart: Revenue growth rate of major U.S. SaaS industries (2018-2022) Chart: Data Monkey
So, what problems has China's cloud computing market encountered? Why hasn't it developed?
We need to analyze the differences in the development paths of cloud computing between China and the United States: the United States focuses on public cloud and prospers the SaaS ecosystem based on public cloud; while China increasingly emphasizes private cloud and hybrid cloud, and the mainstream status of public cloud is challenged.
Data source: Financial reports of various cloud vendors
The author believes that the root of China's cloud computing market problems lies in its obsession with private cloud.
Private cloud is not true cloud computing
With the development of science and technology, cloud computing has become a hot word in the field of contemporary information technology. But it is not an easy thing to accurately understand the true meaning of cloud computing. To understand the relationship between private cloud and cloud computing, we must first understand what the essence of cloud computing is.
In the author's opinion, cloud computing can be understood from two dimensions. Regarding the question of whether private cloud is cloud computing, different perspectives may give different answers.
Technical dimension: Private cloud is cloud computing
Cloud computing is technically characterized by resource pooling, virtualization, and elastic expansion.
Resource pooling is one of the cornerstones of cloud computing. It means pooling computing, storage and network resources and then dynamically allocating them to different applications or services based on user needs. This approach significantly improves resource usage efficiency because it ensures that resources will not be idle and can also meet sudden large numbers of requests. Private cloud has also carried out a lot of practice in this regard. Private cloud centrally manages and allocates resources based on the internal needs of the organization. Although it may not serve a large number of users like public cloud, its concept of resource pooling is the same.
Virtualization technology allows multiple virtual machines to run in parallel on a physical server, which makes full use of resources and provides users with a flexible environment. Virtualization technology is a key technology that enables flexible and rapid deployment of cloud computing. In private clouds, virtualization is also a core technology. Through virtualization, organizations can easily create and manage multiple virtual environments to meet multiple business needs while optimizing the utilization of hardware resources.
Elastic expansion is one of the most attractive features of cloud computing. As your business grows, users can easily expand or shrink resources without worrying about purchasing or discarding hardware. This resiliency greatly increases the agility of the enterprise. While a private cloud may not be as infinitely scalable as a public cloud in this regard, the design philosophy is the same. Organizations can quickly scale up or down their private cloud resources as needed to adapt to changes in their business.
It can be seen that private cloud does adopt many technologies of cloud computing. From this perspective, private cloud is indeed a form of cloud computing.
Business dimension: Private cloud is not really cloud computing
But when we look at cloud computing from a business perspective, we will find that it is actually a disruptive reconstruction of the traditional computing model, similar to the "industrial revolution" in history. The traditional computing model, that is, the localized deployment method, is more like a "small manual workshop." Each business or organization has its own independent hardware equipment and software environment, which is self-sufficient, but is too small to achieve economies of scale. On the contrary, cloud computing abstracts and pools computing resources and then provides them to many users, just like a large factory. This model significantly improves the utilization of computing resources, reduces costs, and provides more powerful and flexible services.
Private cloud lags behind in this dimension. Although private cloud technically adopts many advanced cloud computing technologies, in terms of business logic, it still remains in the "small workshop" model. Imagine that a small workshop has purchased advanced production machinery, but it is still limited by the limitations of small-scale production and cannot achieve large-scale benefits.
To sum up, from a technical point of view, private cloud does adopt cloud computing technology; but from a business logic point of view, it does not realize the economies of scale and flexibility brought by cloud computing. Cloud computing is not only a technological change, but also an industrial change. Therefore, from a business or industry perspective, private cloud is not cloud computing in the true sense.
Private cloud is not suitable for the development of SaaS
Cloud computing is divided into IaaS, PaaS and SaaS layers. The IaaS layer only provides basic computing, storage, and network resources, while the SaaS layer is directly related to business applications. We do not calculate for the sake of calculation, but use computing power to digitally empower businesses. Therefore, SaaS should be the core of the entire cloud computing.
However, private cloud has natural shortcomings in promoting SaaS. Specifically, it is mainly reflected in the following aspects:
1. More complex deployment and operation and maintenance.
SaaS solutions in public cloud environments are usually deployed once and used multiple times, while private clouds require separate deployment for each enterprise or instance. This means duplication of effort, as well as higher time and costs. Software updates or patches can be more complex in a private cloud environment. If a SaaS provider has hundreds or thousands of customers all on a private cloud, each new release or security update needs to be deployed separately.
Relatively speaking, public cloud is more suitable for the development of SaaS. For example, a CRM software can be provided to millions of customers after being installed on Alibaba Cloud. If there are new functions, it can be updated with one click on Alibaba Cloud. , the CRM systems of millions of customers can also be updated simultaneously with one click, so that customers can easily use the latest technology products. If it is a private cloud, assuming 1,000 companies deploy 1,000 private clouds, then the CRM software will need to be deployed 1,000 times. When there are new features, they need to be updated one by one on 1,000 private clouds, which is very inefficient.
2. SaaS product version control and consistency issues.
In a private cloud environment, different customers may choose to update at different points in time, which may lead to scattered versions and thus compatibility issues. Version inconsistencies can result in a degraded customer experience, as some users may not have access to the latest features or optimizations.
In the long run, the overall cost of a private cloud can exceed that of a public cloud, especially when hardware refreshes, maintenance, labor, and software license fees are factored in. For SaaS vendors, providing support and customization for each private cloud customer can result in higher operational costs.
3. If it cannot better respond to market demand, the speed of technological product innovation will be even lower.
Public cloud providers typically iterate and roll out new features quickly, and SaaS providers can leverage these new features to provide better services to their customers. In a private cloud, implementing this kind of innovation can take more time and effort because each new feature or service needs to be tested and deployed individually in each private instance.
4. Private cloud SaaS product integration capabilities are limited and cannot be well integrated into the SaaS ecosystem.
From an ecosystem perspective, private clouds are limited in their integration capabilities and external connections. Public cloud provides a broad and diverse ecosystem that allows SaaS applications to be easily integrated with other services and platforms, while private cloud may be difficult to achieve such integration due to its relative closedness and uniqueness.
Next, we give a specific example to illustrate this problem.
Company A is a medium-sized manufacturing enterprise that mainly produces high-end home appliances. With the modernization of production lines and the increase in market demand, the company decided to adopt cloud computing technology to realize its digital strategy. Companies opt for private cloud deployments due to concerns about data security and intellectual property.
After starting to use the private cloud, Company A's IT team quickly encountered a series of challenges. First, every time a company introduces a new production line or updates its ERP system, they must manually configure and adjust private cloud resources. This is a far cry from the out-of-the-box model of public cloud, resulting in longer deployment times and higher maintenance costs.
In addition, as the business expands, the company requires more integration with third-party suppliers, such as raw material suppliers, logistics partners, and distribution channels. SaaS solutions in public cloud environments often provide rich APIs and integration tools to easily implement these integrations. But in the private cloud, Company A's IT team found that each integration required a lot of custom development, which was time-consuming and laborious.
At the same time, in order to remain competitive with competitors, the company hopes to introduce more advanced technologies, such as Internet of Things (IoT) devices, machine learning, and big data analytics. But due to the limitations of private clouds, companies find it difficult to quickly iterate and implement these new technologies.
Ultimately, while Manufacturing A Ltd. gained greater control over its data, it found itself sacrificing agility and innovation. Over time, companies began to realize that rather than investing in maintaining and upgrading private clouds, they should consider partnering with public cloud providers to achieve their business goals and meet growing market demands.
Are private clouds really more secure?
Are private clouds really more secure?
The reason why China is so fond of private cloud and hybrid cloud is that the most frequently mentioned reason is that data is stored on its own private cloud, which is safer and more secure, and business compliance is also more guaranteed. Business compliance is essentially a data security issue, so we next focus on discussing which one is more secure, public cloud or private cloud.
It is true that public clouds are currently not secure enough, and data breaches occur frequently. Moreover, from a technical perspective, in a public cloud, multiple enterprise applications may run on one physical server, which poses the risk of potential cross-tenant attacks. A private cloud can avoid this situation.
However, these are all problems that can be better solved through hard work. The public cloud has stronger security capabilities. Next, it is necessary to continue to strengthen security technology capabilities and set up some "insurance measures" in the mechanism, such as increasing third-party supervision of cloud vendors; setting up a compensation mechanism for data security incidents, etc.
In the digital age, where data is viewed as the new currency, how to securely and efficiently store and access this data has become a central issue for many businesses and individuals. Public cloud and private cloud provide us with two different data storage solutions, but which one is superior and can better guarantee data security?
Let's think about this question using an everyday analogy: If you had 1 million cash, would you choose to lock it in a safe at home, or deposit it in a bank? Intuitively, many people may choose a bank because it is seen as more secure and professional. So why do we so often take the opposite view when thinking about data storage?
The bank has state-of-the-art security technology, cameras, security alarms and 24-hour security monitoring, all designed to protect customers' funds. This security guarantee can also be found in public clouds. Large public cloud providers have professional security teams and advanced security technologies to ensure the privacy and security of user data. In contrast, a home safe may be able to withstand everyday risks, but it may not be able to withstand professional thieves. The same goes for a private cloud, although it offers more control to the business, many times it may lack the expertise and resources to resist sophisticated cyberattacks.
In addition to technical security, banks also have a very critical advantage, which is credibility. This trust is formed after years of operation and countless risk tests, and public cloud providers also need time and experience to build this trust. However, as time passes and technology advances, we have seen more and more businesses and individuals begin to trust the public cloud, and at the same time, public cloud providers continue to strengthen their security measures.
Then consider the issue of liability. Banks are often held liable when theft or other security incidents occur. Public cloud providers should also assume the same responsibility to ensure the security of user data and provide users with appropriate compensation when problems arise.
In general, choosing between a public cloud or a private cloud for storing data is like choosing between keeping money in a bank or locking it in a safe at home. It needs to be judged based on specific needs, risk tolerance and trust level. But in any case, the future trend should be that the public cloud continues to strengthen its security and credibility, providing users with a reliable and secure data storage environment like a bank.
In China, the prevalence of private cloud has, to a certain extent, affected the prosperity of the SaaS market and the sound growth of the cloud computing industry. As the forefront of cloud computing applications, SaaS is a key indicator of the health of the cloud computing market. Due to the limitations of private cloud, we have witnessed that the pace of SaaS development in China has been restricted. This restriction has further affected the development momentum of the entire cloud computing industry.
The future of cloud computing in China requires a profound reflection and innovation. We need to return to the original intention of cloud computing - to provide efficient, flexible and scalable computing capabilities to meet various business needs. Public cloud, with its scale advantages and integration capabilities, should once again be at the heart of the industry. Technological progress is necessary, but equally important is market education so that more enterprises understand the advantages and application methods of public cloud.
Concerns about data security are an issue that no country can avoid. However, it should not become a stumbling block to the development of the cloud computing industry. By formulating reasonable policies, adopting advanced security technologies, and conducting continuous supervision and market education, we can ensure data security while also promoting the healthy development of cloud computing.
In short, China's cloud computing industry is at a critical turning point. If we want to gain a leading position in the global market, we must get rid of the shackles of private cloud, fully develop public cloud, and actively face and solve data security issues at the same time. This will be our future direction and a real opportunity for cloud computing in China.
Text: Yicai Yanyu / Data Yuan
