The new title is: Can Alibaba Cloud achieve Microsoft-like revenue growth through cloud + AI? |Quick review

Text｜Liu Jiaqing

The curtain has fallen, and it is the end of another year's Yunqi Conference. This year, Tsai Chongxin, chairman of the board of directors of Alibaba Group, said at the conference that Alibaba Cloud has served the great development of China's mobile Internet in the past ten years. Today, with the rapid development of large model technology, the era of intelligence is beginning. Alibaba Cloud is conducting comprehensive technological upgrades and innovations for the AI ​​era to create the most open cloud in the AI ​​era. Wang Jian, founder of Alibaba Cloud, said that the combination of AI and cloud computing will bring about the third wave of cloud computing. It will not be completed in one or two years. It may give us ten or decades. Time allows enough innovations to be invented in the cloud computing era.

What is the special significance of this Yunqi Conference? Will Internet cloud service providers such as Alibaba Cloud soon experience revenue growth similar to that brought about by Microsoft's "cloud AI" business portfolio? (Niu News has analyzed the hidden information in Microsoft CEO Nadella’s annual letter in this article)

The Yunqi Conference hopes to show the outside world more possibilities of the cloud. However, the recent topic of "going to the cloud" of the Coming to new influences?

In response to the above issues, Niutou News and technology commentator Wang Ruchen, Director of the Digital Economy Integrated Innovation and Development Center of the Central University of Finance and Economics Chen Duan, founder of Darui Consulting Ma Jihua, angel investor and well-known Internet expert Guo Tao, and senior Internet observer Ding Tao Shi, iiMedia Consulting CEO Zhang Yi, and independent TMT analyst Fu Liang conducted exchanges and discussions.

When talking about the feelings brought by this year's Yunqi Conference, technology commentator Wang Ruchen said that there are two outstanding feelings about this year's conference. First, "calculate, for incalculable value." This was the theme of the 2015 Yunqi Conference and it returns today.

Two key points gradually emerge: 1. Refocus on the public cloud position, which is also the foothold of openness; 2. With the advent of the era of large-scale models, higher and richer requirements for computing power and computing power are proposed Require. Refocus on calculation, focus on incalculable value, and focus on greater ecological value. In the main forum, exhibition hall and community, there are more voices and faces of partners, emphasizing "openness" and "ecology"

Second, innovation in the era of computing, computing power and large models. Of course, Alibaba Cloud is not only a public cloud in a narrow sense (it does not mention public clouds much, but emphasizes public clouds), it also has digital and intelligent elements. In other words, cloud computing has a broad scope, with wide rivers and long links. Alibaba Cloud has demonstrated full-stack AI capabilities, as well as a relatively complete Tongyi large model family. Behind this complete capability system, it is still inseparable from basic computing and computing power.

Combined with the demands of openness, inclusiveness, efficiency, and proven services, Alibaba Cloud, which has the advantages of public cloud, has more complete and comprehensive advantages. "Overall, Alibaba Cloud did not show off its muscles too much. Instead, it showed more of the value of openness and ecology by returning to the basic position."

Chen Duan, director of the Digital Economy Integrated Innovation and Development Center of the Central University of Finance and Economics, analyzed that the compound innovation of "cloud AI" is a major trend, but for companies with different business genes, in the process of technological collaboration model innovation , there will still be differences in the opportunities, risks, business growth, compound growth rate and revenue growth we face. Microsoft has achieved a comeback in recent years relying on AI. Their business system is relatively vertical, while Alibaba relies mainly on cloud services and has focused on AI in recent years. However, Alibaba's accumulated advantages are in cloud computing, and its future innovation focus and development path It will still be different from Microsoft.

Alibaba Cloud has been regarded as the core business of Alibaba Group in recent years. However, from the perspective of profitability, Alibaba Cloud is relatively low among the different business sectors within the Alibaba system. It is a strategic business that Alibaba Group attaches great importance to. If compared from the perspective of business growth and rate of return, Ali's local life services, including e-commerce business, in the past two years are still Ali's most accumulated advantage in terms of monetization. Alibaba Cloud has the largest market share in Asia, but there is currently no particularly clear positive interaction between market share and industry returns, because cloud computing needs to embody the empowerment of specific industries, scenarios and businesses. From this point of view, Alibaba Cloud has the largest market share in Asia. Cloud is more strategic than profitable.

Ma Jihua, founder of Darui Consulting, said that China's cloud computing market is also showing a similar phenomenon. Large models are closely integrated with the cloud. Therefore, various cloud computing companies are developing large models and dare not behind. The implementation of large models has obviously improved the basic capabilities of cloud computing and enhanced users' spatial imagination for practical applications, which will drive the growth of cloud computing business. Because the large models of Alibaba Cloud and Alibaba are both in leading positions in the industry, the combined capabilities of the two will provide more obvious competitive advantages, which will enhance Alibaba Cloud's business growth.

When talking about the topic of "moving to the cloud", Ma Jihua believes that moving the X platform to the cloud is one of the measures taken by Musk to reduce costs. In the short term, moving to the cloud is profitable, but the negative impact on the long-term business development of the X platform cannot be ignored. Of course, Musk is not currently concerned about the future of the X platform, but other companies may not dare to take risks easily

Speaking of going to the cloud, many domestic Internet companies have given up on using cloud computing. For example, Kuaishou and Meituan have all been customers of cloud computing vendors, but they are also building their own data centers and reducing or giving up using the cloud. For cloud migration, some capable and well-established technology companies can do it, but most enterprises will not. Especially for units with small daily traffic or irregular and balanced business, cloud computing is still cost-effective, especially when combined with large models. In the future, the stickiness of cloud computing for small companies will increase.

Angel investor and well-known Internet expert Guo Tao said that domestic cloud service providers such as Alibaba Cloud and Baidu Cloud have been promoting the in-depth integration of large models and cloud services in recent years. With the large-scale application of large-model related products or services, the cloud business is expected to achieve a high growth rate next year. However, it is still difficult to achieve a high level of growth similar to that of Microsoft. Microsoft Cloud has in-depth cooperation with globally influential large model-related companies such as Chat GPT and Llama. As large model-related products and applications become inclusive and large-scale, the cloud business will continue to maintain a high growth rate.

Guo Tao said that there are many reasons for X platform to move to the cloud, including not only cost considerations, but also data security and privacy, strategic layout and other considerations. Competition in the domestic cloud service market is fierce. With the new round of price cuts by major cloud service providers, the cost of using cloud services for enterprises continues to decrease. Compared with enterprises building their own computer rooms, the cost will be lower, and it will save time and effort. However, for enterprises with special needs, such as computing performance, data security, etc., they need more professional solutions to meet their own needs. In this case, self-built computer rooms are also the choice of more and more enterprises. . In the future, cloud service providers will be required to continuously reduce costs and improve service quality.

In the discussion, Senior Internet observer Ding Daoshi believes that it is difficult for Internet cloud service providers such as Alibaba Cloud to experience growth similar to Microsoft's "cloud AI" business portfolio. In recent years, as the three major operators' cloud services have continued to expand their efforts in the market, they have shown rapid growth, with revenue growth far exceeding that of Internet cloud service providers. Therefore, it is very, very difficult for the latter to achieve more than double-digit growth that year.

Ding Daoshi believes that "going to the cloud" is the basic support for business by cloud services. At present, the main commercial services of China's Internet rely on cloud services, so cloud services have become the basis of many businesses. In China, cloud services will not weaken, but will further develop and grow

iiMedia Consulting CEO Zhang Yi said that the current cloud services of many major Internet companies have become a burden due to no profits. The background of major Internet companies providing cloud services was originally idle. Resource reuse, but later cloud services became a new business. The development of this new business did not meet the previous expectations of many major manufacturers, but increased a lot of costs. Therefore, the "cloud" of the X platform came at this level. He said there was a cost reduction consideration.

Due to fierce competition in cloud resources, prices and operating costs in the cloud service market are increasing day by day. Cloud services have always been a high-demand, high-profit business. However, today cloud service providers have to face high marketing costs, customer acquisition costs, operating costs, resource costs, equipment costs and management costs. Therefore, the growth of domestic Internet cloud service providers has gradually slowed down in recent years. For Alibaba Cloud and other Internet cloud service providers, in such a competitive environment, it may not be too high to hope for good growth

Fu Liang, an independent TMT analyst, said in a social media chat with Niutou that currently there is not much room for growth simply relying on cloud services. The leading cloud service providers have all adopted the concept of "cloud AI". ”, or “cloud computing power” as an important breakthrough can bring new impetus to cloud services. In terms of revenue growth, Internet cloud service providers such as Alibaba Cloud will definitely rebound, which involves a variety of factors.

First of all, from the perspective of the overall environment, the domestic cloud service market is still growing. Secondly, take Alibaba Cloud as an example. Although it is subject to competition from the cloud services of the three major telecom operators, Alibaba Cloud has also been affected to a certain extent. However, since this year, Alibaba Cloud has made rapid adjustments. From the speeches of Alibaba Cloud executives, we can also feel that Alibaba Cloud attaches great importance to the opportunities brought by large AI models and hopes to use large models to promote the development of cloud business. This is also reflected in various displays at this Yunqi Conference

Third, Alibaba Cloud stated at this conference that currently 80% of the country’s technology companies and more than half of the large AI model companies run on Alibaba Cloud. From this point of view, Alibaba Cloud obtains income by providing cloud and computing power support. With the help of business upgrades, although it will take time to implement large-scale models, Alibaba Cloud has already seized the opportunity in terms of computing power. By next year, as the large model matures, Alibaba Cloud will usher in more breakthroughs. These are the reasons why they can achieve revenue growth.

Fu Liang believes that "Xiayun" is a special example of the X platform. After Musk's acquisition, the number of users and traffic of the X platform entered a period of shrinkage. Since the data traffic and access volume of the X platform itself has not increased, the demand for the cloud has also weakened. Therefore, "off-cloud" to reduce costs becomes necessary. From the user's point of view, although "off-cloud" may slow down access to the platform, it is acceptable to users as long as it does not excessively affect the user experience

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