Welcome to the WeChat subscription number of “Sina Technology”: techsina
Written | Edited by Wen Yehao | Wu Xianzhi
Source: Photon Planet
With the slowdown and even contraction of the growth rate of Alibaba Cloud and Tencent Cloud, the cloud computing giants that have been running at a high speed in recent years have now shown signs of fatigue.
In terms of growth rate, Baidu Smart Cloud, which lives outside of the three major clouds, relies on AI + cloud to become the tallest among these Internet “dwarfs”. In the second quarter of this year, Baidu Smart Cloud revenue increased by 31% year-on-year and 10% month-on-month, outperforming many Internet players.
However, a short-term victory does not determine the overall situation. It can be seen that although Baidu Smart Cloud continues to grow, the growth rate is also slowing down, as if it is replicating the road that Alibaba and Tencent have taken.
At present, Alibaba and Tencent are jumping out of the comfort zone of the past and seeking new increments. Baidu Smart Cloud seems to be taking precautions and gradually walks out of the familiar AI story.
The fourth cloud in the crack
Although the volume in the Internet context is mediocre, in terms of share, the performance of Baidu Smart Cloud is not bad at this stage.
According to Canalys data, in the second quarter of 2022, the top four players in the domestic cloud computing market are Alibaba Cloud, Huawei Cloud, Tencent Cloud, and Baidu Smart Cloud, accounting for 34%, 19%, 17%, and 9% of the market respectively. share.
Although Baidu firmly occupies the title of “Fourth Cloud” and is not classified as “Other”, objectively speaking, Baidu Smart Cloud still has a large gap with the top three – it will not slip, but It is difficult to compete with Tencent Cloud and Huawei Cloud for the third seat. There are two main reasons behind this.
First of all, Baidu failed to seize the best opportunity to enter the market and missed the first-mover advantage.
Based on Li Yanhong’s past perception of cloud computing “old wine in new bottles” and his preference for AI, Baidu bet its future flywheel on artificial intelligence ten years ago, and its pace into the cloud computing track was significantly slower than BAT. of the other two.
But as far as the story goes, Robin Li seems to have made the wrong bet. When the trend for enterprises to go to the cloud has become, AI is still struggling in the field of commercialization. Therefore, in 2019, Baidu’s cloud computing business was integrated and upgraded to Baidu Intelligent Cloud. When its strategic position was improved, AI was also integrated.
At that time, the core of the need for enterprises to go to the cloud was to obtain the required “computing power” by removing hardware. As a provider of computing power, cloud computing manufacturers obviously need to have strong “hard power” in terms of servers and data centers if they want to seize the broadest needs of the industry. In this regard, compared with Alibaba, which started as an e-commerce business, and Tencent, which is rooted in games, Baidu’s core business has limited demand for servers, and its service capabilities are naturally discounted.
Secondly, in the face of the pan-Internet market, Baidu’s business ecology does not have the advantage of pulling force.
For a long time, Alibaba Cloud, which is backed by the e-commerce system, has mostly customers in e-commerce and retail industries. Tencent Cloud has firmly encircled games, In the audio and video battlefield, by contrast, Baidu lacks a foothold.
Based on this, in the situation that the pan-Internet cake, which is the most common demand for “going to the cloud”, is being divided up, the situation of Baidu Smart Cloud is slightly embarrassing: it is extremely expensive to make up for shortcomings, and it is easy to fall into the vortex of heavy assets of “idling” of hardware. Increase market share to dilute costs and reduce risk. To increase the share, it is nothing more than getting involved in the price war of the industry to snatch customers. If you want to get involved in the more mature Alibaba Cloud and Tencent Cloud, you will inevitably face extremely high cost pressure, which goes against the original intention of reducing costs by expanding the scale. .
Baidu, which consciously missed the critical period, had to avoid direct competition with giants in the IaaS layer. However, the fat meat of cloud computing cannot be put away. For this reason, Baidu began to seek differentiated markets, which can be seen from the naming logic of Baidu Smart Cloud itself.
The pros and cons of AI masks
Since the birth of Baidu Intelligent Cloud, Baidu has been weakening the expression of the traditional cloud computing industry – skipping the basic IaaS layer directly, talking about PaaS, SaaS and AI applications. Obviously, Baidu Smart Cloud has used AI as a mask to hide its fragile side as a traditional cloud manufacturer, and thus better tell new stories.
Although it has not yet gotten rid of the constraints of commercialization, it is undeniable that Baidu’s AI capabilities are indeed at the forefront of the industry. The IDC report shows that in the field of AI software and applications, Baidu Smart Cloud has ranked first for many times.
Compared with entering the industry, JD Cloud, which competes with cloud computing manufacturers at the waist and tail, can undoubtedly avoid many competitors by using AI as an export through a differentiated route. This is the key to its ability to widen the gap with second-tier cloud vendors.
Specifically, AI-based PaaS and SaaS layer businesses can usually achieve a gross profit margin of 50%-80%, which is not only higher than the traditional IaaS business, but also effectively avoids the vicious competition of the aforementioned cloud vendors.
A cloud agent once told Photon Planet that before a customer reached a cooperation, several cloud agents were in contact with them at the same time. Agents took another chance, and when Tencent Cloud deployed the government cloud in the early stage, it won the bid for a local government external network proprietary cloud platform project with 0.01 yuan.
In addition, thanks to the stories told by AI, Baidu’s intelligent cloud customers are mostly technology companies and industrial users, which also makes it resilient in the face of fluctuations in the performance of various Internet cloud manufacturers.
However, the AI mask that conceals and beautifies on the surface also binds Baidu Smart Cloud behind the scenes. This is mainly based on the following two points.
First of all, even if AI is embedded into the technical framework of Baidu Smart Cloud, it will not bring infinite market increments. On the contrary, as the industry intensifies, Baidu Smart Cloud will eventually usher in a more intense competition dimension.
According to Baidu’s introduction, through Baidu’s intelligent cloud “Kaiwu” platform, a production line of a chemical fiber enterprise has changed the situation of detecting defects in silk ingots with the naked eye under strong light, and the efficiency has been improved by up to 70%. The core of the realization of this solution is Baidu’s vision AI. From an ideal perspective, AI applications are not limited to factory assembly lines, and fields such as single-station human-machine collaboration scenarios and autonomous driving will eventually be implemented.
As everyone knows, in the current environment, technology and efficiency are not the first elements considered by enterprises. How to survive through the line of life and death is the foundation of business. Compared with protecting employees by so-called cutting-edge technology, how to spend small money to do big things is the logic of the operation of many small and medium-sized bosses.
A service provider told Photon Planet that many companies would rather rely on layoffs to stagnate their business than invest in digital transformation. Taking a garment production line as an example, instead of spending a lot of money to introduce visual AI to screen defective products, most companies should hire a few more employees to stay on the production line. The cost of the two is not the same order of magnitude. “Even if we promise to eliminate the initial cost, many customers will reject the solution because it is too cumbersome.”
On the other hand, while AI has become the feature and highlight of Baidu Smart Cloud, it is also trapped in it.
A cloud agent told Photon Planet: “This business is too complicated, and they are all fighting price wars. The top three are the ones with high public cloud market recognition. Other clouds basically have no presence in the public cloud market, and they cannot sell Go out.” It can be seen that Baidu Intelligent Cloud, which emphasizes AI integration too much, does not actually have much presence in the wider market.
At present, although Baidu Smart Cloud still maintains a growth trend, the growth rate has dropped significantly compared with a year ago. It is foreseeable that with the increasing scale of Baidu Smart Cloud customers and the increasingly fierce market competition environment in the future, Baidu Smart Cloud may replicate the track jointly drawn by Alibaba Cloud and Tencent Cloud and enter a period of weakness.
Therefore, even though Baidu Smart Cloud has achieved a phased victory by relying on the AI route, if it wants to seek longer-term growth momentum, the AI mask must be removed.
Looking for “presence”
Perhaps in order to meet the possible period of weakness in the future, in May this year, Baidu launched a new round of cadre rotation. Among them, in addition to Shen Dou who went from MEG to ACG as the person in charge, Baidu Netdisk, which originally belonged to MEG, was also assigned to ACG.
And this move may be the manifestation of Baidu Smart Cloud jumping out of AI and looking for a sense of presence.
Because Baidu Smart Cloud’s entry point is biased towards vertical industries, emphasizing the application of its own AI capabilities, it has a shallow layout in the fragmented SaaS layer. Although Baidu Intelligent Cloud released the Indus plan in July last year, trying to introduce third-party SaaS vendors to complement its own ecology, it has always lacked a traffic portal to drive the SaaS ecology.
For SaaS vendors, the purpose of choosing to join the cloud vendor ecosystem is to increase the sales scale with the help of customer resources, and how to determine the number of customer resources, B-side office software undoubtedly guides the direction.
Looking around the current mainstream cloud vendors, Alibaba Cloud has DingTalk, Tencent Cloud has WeChat, Huawei Cloud has Welink, and even the new entrant ByteDance has Volcano Engine and Feishu. In contrast, Baidu does lack a facade to attract third-party vendors. Because of this, Baidu Netdisk, as Baidu’s most suitable chess piece at this stage, has finally fallen.
However, this move is not a “general”, but a stubborn resistance. The so-called suitable is only for Baidu’s business side, it does not mean that Baidu Smart Cloud will make up for the shortcomings and soar into the sky.
Specifically, even though Baidu’s network disk has been expanding its capacity and strengthening its applications and services, it is still largely a tool application with data storage as its core. Communication, organizational structure, business process and other capabilities are not yet perfect, and it is difficult to replace mainstream office applications.
Fortunately, Baidu Netdisk, as the number one player in the domestic online disk market, has accumulated enough user scale without going through the most difficult expansion period. At this stage, Baidu only needs to think about how to better transform it and release its pull on its partners.
On the other hand, Baidu has also reproduced the logic of the past, trying to seek the market on the familiar track. In September of this year, Baidu Smart Cloud released an automobile cloud that integrates group cloud, network connection cloud, and supply chain collaboration cloud, trying to take advantage of its own technology and resource advantages in the field of car manufacturing to take over this hot cake.
In order to seek increments, Baidu Smart Cloud itself needs to introduce more SaaS partners to establish a cooperative ecosystem; and the number of customers in the auto track is far less than the “hundred industries” targeted by AI, and the importance of a single customer will be significantly increased. These two major exports are undoubtedly a great test for Baidu’s docking and sales capabilities. And this may be one of the reasons why Shen Jiu is in charge of ACG.
A person close to Shen Jiu mentioned that, as a “weekend poker game” that Baidu’s core management team can only participate in, Shen Jiu’s ability to talk, do things, and drink well may allow ACG to have some “surprising” breakthroughs.
(Disclaimer: This article only represents the author’s point of view and does not represent the position of Sina.com.)
This article is reproduced from: http://finance.sina.com.cn/tech/csj/2022-09-28/doc-imqmmtha9123032.shtml
This site is for inclusion only, and the copyright belongs to the original author.