Price reduction does not mean blindly compressing its own profit margins. Cloud vendors have begun to move towards PaaS and SaaS products with higher profit margins, and core products account for an increasing share of the total package.
Author | Doudou
Editor|Piye
Produced | Industrialist
This year, cloud vendors fully embrace Double 11.
As China's largest cloud computing service provider, Alibaba Cloud has started to warm up for the Double Eleven event at the end of October, providing a number of preferential policies, such as discounts, vouchers, etc.; Tencent Cloud launched the "11.11 Cloud Ceremony" with low cloud server to 1 yuan, etc.; Baidu Smart Cloud launched the "11.11 Smart Cloud Festival", with cloud server renewals as low as 40% off; JD Cloud also launched the 11.11 promotion event early, emphasizing that popular cloud hosts can be purchased for as low as 66 yuan for one year ;Huawei Cloud has also launched a number of preferential policies. For example: cloud servers are as low as 1 yuan, cloud databases are available at half price, etc.; UCloud launches Double 11 shopping spree and launches global cloud host carnival discounts, starting from only 39 yuan/year.
In the operator camp, big sales are also very popular. For example, Tianyi Cloud has created a National Cloud Access Festival, offering limited-time sales of the popular S3 universal cloud host with 1 core and 2G at an early adopter price of 33.9 yuan/3 months, and the relational database My SQL with a fixed price of 11.11 yuan/3 months; the S6 universal cloud host , new users enjoy 12% off.
It is worth noting that behind the price reductions of cloud vendors, they are not just exchanging price for volume to attract more users. A deeper interpretation isthe original intention of lowering the threshold of enterprise digitalization under the extremely growing demand for enterprise digitalization.
In addition,price reduction does not mean blindly compressing its own profit margins. Cloud vendors have begun to move towards PaaS and SaaS products with higher profit margins. The ratio is getting higher and higher.
Behind the big promotions of cloud vendors, everything has traces to follow.
1. Double 11, cloud vendors favor small and medium-sized enterprises
One fact is that this year's Double 11 specific promotion strategies, price reduction targets and extent of cloud vendors have all changed.
Alibaba Cloud has launched new discounts. It is worth noting that this year Alibaba Cloud has launched different discounts for different products and services, such as e-series products for small and medium-sized applications and scenarios such as development testing and small application construction. The product.
The more attractive activity is the cloud server e instance type for 99 yuan. The e-instance type is the latest shared cloud server launched this year. It is suitable for applications such as small and medium-sized website construction, development testing, and small program or app building.
The price is less than 100 yuan, and the configuration is a 2-core 2G3M bandwidth 40G system disk. This price/performance ratio is quite rare in Alibaba Cloud.
In addition, the price reductions of some products are also large. For example, Alibaba Cloud's 2022 RDS MySQL is as low as 0.17% off, with renewals starting at 40% off, and new and old users alike can enjoy 40% off. In 2023, RDS MySQL will be available at a discount of up to 10%, and popular products such as PolarDB, Redis, and MongoDB will be available at a discount of up to 35% for both new and old users;
In general,Alibaba Cloud’s promotion strategy for Double Eleven in 2023 will focus more on attracting small and medium-sized enterprises and new customers.
Huawei Cloud also offers great discounts. Some general-purpose and enhanced cloud servers are not only lower than the usual official prices, but the enhanced C7 cloud server is even more powerful. The price is already lower than some general-purpose cloud servers.
In addition, compared with other cloud vendors, there are more activities such as lottery and physical gifts.
In the operator camp, Tianyi Cloud is the most active. The main competitiveness of carrier cloud vendors is price. Normal event prices are basically at the bottom line, but looking at this year's Double Eleven, they have still dropped a bit.
It is worth noting thatthe novice cloud zone is the key discount this time.Each model is very cheap, please note These are not lightweight machines, they are all general-purpose hosts. For example, the 2-core 4G S6 general-purpose cloud host is 205.2/6 months, as low as 12% off.
Among them, the most valuable thing compared to other manufacturers is the active machine, which supports a maximum bandwidth of 20M and can be selected for three years.
Tencent Cloud focuses more on lightweight cloud servers.Compared with other manufacturers, Tencent Cloud has greater efforts in this aspect. This can be seen from the fact that its vouchers support orders with a maximum duration of 36 months (inclusive).
In addition, the discounts and advantages of Tencent Cloud's overseas cloud server zones are also relatively obvious.
Generally speaking, although most cloud vendors have dropped prices again and again on some products, most of them are their core and advantageous products. In addition, Alibaba e instances and Tencent's overseas servers all show that manufacturers attach great importance to small and medium-sized enterprises.
A question worth thinking about is, what are the underlying reasons behind these changes in promotional strategies and price reductions?
2. The underlying logic: being integrated and “breaking involution”
In fact, both Internet cloud and operator cloud have faced growth pressure in recent years.
The first is the Internet cloud. From fiscal year 2019 to fiscal year 2022, the revenue growth rate of Internet cloud vendors such as Alibaba Cloud and Tencent Cloud has slowed down to varying degrees. Behind this is a more important The reason is that in the past, Internet cloud vendors' customers based on the Internet side have grown by leaps and bounds, but as this customer base gradually becomes saturated, this growth advantage is no longer there. This is a microcosm of the entire Internet cloud vendors. For Internet cloud vendors,they need to win new positions.
However, since large enterprises usually have credit innovation requirements, it is difficult for Internet cloud vendors to obtain larger profits from this. By penetrating the edge businesses of large enterprises, can increase revenue, and secondly, it can slowly penetrate from the outside in and become a new position for Internet cloud manufacturers.
Next is the carrier cloud. Although the carrier cloud has grown by leaps and bounds in recent years, it is hard to hide that this growth trend will not last long.
One fact is that the financial industry is currently an industry that has done relatively well in digital transformation. However, with the gradual penetration of digitalization, the customer resources of these large government enterprises have been "exhausted", and large banks have gradually become a stock market. For carrier cloud, as the accounts of financial and government customers are "divided", they need to find the next growth point.
From the above, Alibaba Cloud's promotion strategy focuses on small and medium-sized enterprises and attracting new customers; Tencent Cloud focuses on lightweight cloud servers; Tianyi Cloud's price drops again and again... It is not difficult to see that cloud vendors are using low prices to , reaching the edge businesses of large enterprises and small and medium-sized enterprises.
On the one hand, lower prices can bring more users’ attention and product exposure. More importantly, the lower price is more conducive to the integration of cloud vendors.
Another layer of underlying logic behind the substantial price reductions by cloud vendors during Double 11 comes from"breaking internal rolls".
In China, many cloud vendors tend to expand their business in order to meet the customized needs of enterprises. This makes the competition between cloud vendors, which should have focused on underlying capabilities, shift to the competition on specific software applications. Some manufacturers have shifted from focusing on specific application competition to competing on underlying capabilities.
However,this "big and comprehensive" Chinese characteristic has caused many mid-level innovative cloud vendors to begin to abandon the research and development of their core business and become more of a "seller". "Server" enterprises, which will bring about price wars and involution among enterprises.
Substantial price cuts by cloud vendors will compress the living space of corresponding parts of the business of mid-tier cloud vendors. For example, Alibaba Cloud and Tencent Cloud have cut prices in databases and other fields, while other mid-tier cloud vendors have either cut prices or given up on underlying businesses. This forces enterprises to shift to more specialized and refined fields, such as database, storage, computing, middleware and other PaaS layer businesses.
In addition, more and more enterprises are beginning to realize the importance of moving to the cloud. With the free time and free capacity on the official websites of cloud vendors, small and micro enterprises and individual developers will have a "give it a try" mentality. Use this to attract more users. This makes the services of cloud vendors more popular and popular.
Cheaper cloud servers or lightweight application servers can also help companies lower the threshold for digital transformation.
Double 11 is just an opportunity, and price reduction is just a means. The ultimate goal is to promote the cloud computing industry towards a more healthy development.
3. Behind the Double 11 changes, look at cloud vendors
Currently, among the cloud vendors, not many have announced their Double 11 results. The one that is more clear is Alibaba Cloud.
Alibaba Cloud took the opportunity of Double 11 to launch a major promotion for the enterprise market. A large number of cloud products were discounted by 50% or even lower. As of 24:00 on November 11, Alibaba Cloud's full-day sales revenue on Double 11 exceeded 190 million yuan.
This is equivalent to short selling a very large data center 24 hours a day, saving tens of thousands of companies more than 1.1 billion yuan in IT costs.
For other cloud vendors, some public data also reflects some information from the side.
For example, JD Cloud’s peak user visits per second increased by 170% year-on-year; JD Cloud’s self-developed unified storage platform Yunhai saves costs by more than 30%; Heduo Cloud operating system Yunjian is based on large-scale co-location technology, and the overall resource cost is reduced by 35%; JD Cloud Intelligent customer service has provided more than 1.4 billion consultation services.
These changes are not just from Double 11, but are the result of adjustments made by cloud vendors over a long period of time.
In the past year, Alibaba Cloud has strengthened its layout in the industrial Internet and local markets, launched a series of solutions for industry segmentation scenarios, and increased investment in the small and medium-sized enterprise market. At the same time, in terms of technology, Alibaba Cloud is also continuing to carry out R&D upgrades and innovations to further improve service levels.
Huawei Cloud has focused more on overseas market expansion, increased investment in overseas regions, and increased research and development efforts in technology, launching a number of new products and features, such as hybrid cloud solutions solutions, AI open platforms, etc.
JD Cloud clearly proposes a digital intelligent supply chain, through digital management in the overall supply chain cycle, to find growth opportunities from the long supply chain.
Tencent Cloud is also increasing its research on emerging technologies such as the Internet of Things, blockchain, and edge computing, strengthening its technical reserves, and increasing its investment in the domestic market, such as smart cities, smart education, and other fields.
Baidu Cloud focuses on the fields of AI and big data, continues to increase investment in research and development, and launches a variety of new services and solutions, such as smart finance, smart customer service, etc.
What is even more noteworthy is that in the past period of time, operator clouds have continued to tighten cloud sovereignty, and Internet cloud vendors have also slowly positioned themselves to be integrated.
Cloud vendors have always been the main general contractors in large government and enterprise orders. However, due to the difficulty of managing digital projects for government and enterprises, cloud vendors are gradually reducing the number of large government and enterprise orders taken out of consideration for their own profit margins.
As a national team, carrier cloud is becoming the first choice for large enterprises to migrate to the cloud. Gradually served as the distributor of large government and enterprise orders. Among them, Internet cloud vendors have gradually retreated to the “second tier” and focused on their core businesses.
This adjustment is mapped to Double 11 and is reflected.
Although the growth of the cloud computing market is currently slowing down, the cloud, as an infrastructure of the digital economy and the base of the pyramid for building the digital economy, has strong resilience in terms of growth. With the continuous adjustments of cloud vendors, the development prospects of the cloud business are still promising. In the future, cloud vendors’ Double 11 events will be as well-known and accessible to the public as JD Double 11 and Tmall Double 11 events.