Welcome to the WeChat subscription number of “Sina Technology”: techsina
■Why is WPS on the hot search?
■ Why did the stock price cut in half?
■What are the challenges of developing the B-side?
Author｜Jia Lele Editor｜Zhao Yuan
Source: Market Cap List
On the morning of July 11, WPS rushed to the hot search on Weibo, not because of too many advertisements, nor because of charging issues, but privacy and security issues.
The cause of the incident was a user who questioned WPS deleting local files due to sensitive words. Eavesdropping, peeping, and private law enforcement have always been the “reverse scales” of netizens. In addition, 11 years ago, Jinshan fell into the “secret door”, adding a layer of mistrust.
The criticism from netizens quickly sent WPS to the hot search. In the words of general manager Zhang Qingyuan, it rushed to the top of the hot search within two hours.
Why does WPS fall into the whirlpool of public opinion? Why did Kingsoft Office, behind the storm, cut its share price in half? Is the B-side the way out for Kingsoft Office? This article will answer these questions.
WPS is peeking at you?
On the morning of July 11, a user posted a Weibo, with a picture saying that WPS seems to have some kind of sensitive word harmony function. After being detected, not only the (corresponding files) stored on the cloud disk will be harmonized. , according to the victims, even local files cannot escape harmony. The user wasn’t sure what was going on either, so he posted a blog to ask.
In the accompanying picture, there is also a post made by an author of the Internet article “Mitu just wants to make money” on Dragon’s Sky Forum.
The public can accept that information in the Internet age is becoming more and more transparent, and they can accept the strict supervision of the public space of the Internet, but they cannot accept the so-called supervision extending to the private domain.
Just like in one’s own home, it doesn’t matter how much you talk about events or how you talk about them. If it’s a speech or a TV talk show, you need to pay attention to the impact when you talk about some events. This is the difference between the private domain and the public domain.
On my computer, in the local file, WPS is used as a coding tool, which is similar to the four treasures of the study, and the content is actually censored. The content of Weibo users made WPS angry. For a while, netizens from all walks of life gathered on this topic. , of course, there are also onlookers who let the bullets fly, and they don’t quite believe that WPS will delete the user’s local files.
At 3:30 p.m. on July 11, WPS finally gave an official response: it was a rumor that the user’s online document link was violated, that others were only prohibited from accessing the link, and that the user’s local file was deleted.
Mi Rabbit just wants to make money and continues to respond on the forum, denying that he said that WPS deletes local files. This is the interpretation of the marketing account, and it also denies WPS’s response.
In Mi Rabbit’s response that they only want to make money, it was because WPS detected normal files that violated the rules, so that the author could not open cloud files, but local files could be opened, but not the latest saved version.
“The WPS customer service told me that the sensitive words were triggered because of sharing. And I have not shared it except for the first 10,000 (night) sharing to the editor. The only time I shared it was to the WPS customer service.” Mi Rabbit’s post wrote .
As early as the third day after the incident, Mi Rabbit’s document could be opened, and WPS also apologized. Half a month has passed, and WPS is now throwing the blame on the link, which makes the author very dissatisfied.
The author Mi Rabbit believes that the biggest problem of WPS is that there are loopholes, the files are randomly detected, and there are misjudgments.
There are also netizens who said that they once shared the novel files they wrote on WeChat to code words on the mobile phone. After returning to WPS, they found that they were locked. After the first appeal, they could copy the novel and save it locally, but the cloud could not open the department. novel.
A lawyer said on Zhihu that if WPS did review the user’s local files, it would obviously violate the user’s privacy.
The focus of the matter has become whether the sharing triggers the review mechanism. Before sharing, does WPS check the user’s documents to see if there is any problem with the review system? If a violation is detected, how much authority should WPS have for the user’s cloud documents and local documents? .
These all require further responses from WPS.
It is the vast number of C-end users, including web writers, that support half of Kingsoft Office’s income. If it is not handled properly, it will have a negative impact on the income whose growth rate is already declining.
Stall Anxiety
WPS office, the office software we are all familiar with, is the core product of Kingsoft Office. WPS office and Microsoft Office are the most common tools on the desktop of workers, and they occupy the vast majority of the country.
In addition to WPS office, Kingsoft Office also provides Kingsoft Documents that can meet the needs of multiple people to collaborate online at the same time, such as Tencent Documents, Graphite Documents, and digital office platform solutions.
By the end of 2020, in China, the number of users using basic office software was about 710 million. According to the official website, WPS office has 400 million monthly active users, and Kingsoft Document has 239 million monthly active users.
Kingsoft Office charges fees for providing services to customers, such as WPS office members, rice husk members and super members. The rights and interests involved include the function of converting to PDF, the use of member templates, the size of cloud storage space, etc., as well as some advertising revenue.
According to different service objects and service methods, Kingsoft Office divides its income into four sources: personal office service subscription business, domestic organization subscription and service business, domestic organization authorization business and Internet advertising promotion service business.
Among them, the Internet advertising business, which has been criticized for a long time, has been shrinking. Recently, Zhang Qingyuan, the general manager, said on Weibo that he plans to completely close the advertising business next year.
The other three businesses are in rapid growth.
Compared with Microsoft Office, Kingsoft has an obvious advantage – it is Chinese. In state-owned enterprises, governments, and government agencies, Kingsoft Office has a very high coverage rate. For example, in 2018, Kingsoft served 82 of 96 central enterprises. Superimposed digital office, data migration to the cloud and the epidemic have accelerated the penetration of online documents. Kingsoft Office has been in a high growth trend in recent years.
In 2021, Kingsoft’s office revenue was 3.28 billion yuan, a year-on-year increase of 45.1%, and in the next two years, it was 43.1% and 39.8% respectively, and the growth rate was also growing slowly.
High growth is also the support of Kingsoft Office’s high valuation.
For high-growth SaaS products, PS is often used to value such companies, with a price-to-sales ratio of hundreds of times. Under this kind of valuation reference, an increase of a few percentage points will be a gap of one or two billion in revenue, but a gap of tens of billions in market value.
Two months after Kingsoft Office went public, under the combined influence of the outbreak of the new crown epidemic, the anticipation of the outbreak of online office demand and the relatively loose monetary environment, Kingsoft Office has been rising throughout 2020, closing at the closing price on the last trading day. In total, Kingsoft Office rose 1.5 times.
It is unanimously expected that the fundamentals will improve and the stock price will rise. When a trend and inertia are formed, the stock price has little to do with the fundamentals. In this way, in January 2021, Jinshan Office rushed to a high of 521 yuan, with a market value of more than 240 billion yuan.
The breaking of the trend sometimes requires not a bad situation, but just the landing of the boots.
On January 26, 2021, Kingsoft Office issued a performance forecast, the net profit doubled, and the stock price still began to decline for two months.
During the period, the stock price rose and fell, and now the market value of Jinshan Office is 80.9 billion yuan, which has fallen by two-thirds from the highest point.
During this period, the shareholders and employee shareholding platforms of Jinshan Office have reduced their holdings many times. The level of market value is related to the financial freedom of many families.
In the first quarter of 2022, the revenue growth rate of Kingsoft Office dropped to 12.3%, and the non-net profit after deduction decreased by 21.8% year-on-year, which is obviously not good news.
So, where does Kingsoft Office need high growth?
There must be a battle with Dingding?
Let’s first look at three businesses other than advertising.
Personal subscription has always been a very stable business. The growth rate in 2021 will be flat with the overall revenue, and the growth rate in the first quarter of 2022 will be 36.7%, which is higher than the company’s revenue growth rate.
The more volatile are institutional subscriptions and institutional authorizations. The obvious difference between subscription and authorization is that the former is a long-term business. As long as the customer renews the subscription, they can receive money. Authorization is authorized for the independent terminal. It cannot be used by multiple devices for one account. It is a one-time business. Of course, the fees are also higher. high.
Customers with high confidentiality requirements and relatively single needs will tend to purchase permanently licensed software. In the long run, under the background of data interconnection, the technical architecture of the licensing model is relatively backward, unable to meet the needs of digital office, and authorized customers There may be a gradual transition to subscription customers.
In 2021, driven by the information technology application innovation industry (Xinchuang), the penetration rate of Kingsoft office products in party and government customers will increase, and the institutional authorized income will be 960 million yuan, a year-on-year increase of 107.1%, which is also in the first quarter of 2021. From a high base, agency licensing revenue declined 10.8% year over year in the first quarter of 2022.
In December last year, Kingsoft Office released a digital office platform, which is an enabling solution covering content creation and management, collaborative office, and business digitization based on the emergency of office products, cloudification, mid-level development and secondary development.
A simple understanding is to add instant messaging, audio and video conferencing, message push and other collaborative office and other functions on top of document collaboration. Kingsoft is becoming PaaS.
So naturally there will be a question, what is the difference between this and DingTalk, enterprise WeChat, and Feishu?
As early as six years ago, Kingsoft Office believed that the future opportunity was the one-stop cloud office of Office, allowing multiple users or groups to realize instant communication and collaboration between text, tables, charts, calendars and other applications related to work scenarios. office. At that time, CEO Ge Ke also tactfully admitted, “Perhaps after installing WPS, there is no need to install Dingding.”
The reason why Kingsoft Office is focusing on the B-end is also very realistic. Zhang Qingyuan once said bluntly, “For Kingsoft Office, the ceiling for the C-end consumer market is relatively easy to achieve, and the future revenue will basically be over if it doubles or triples; and the B-end revenue is still There is a lot of room for growth.”
The “14th Five-Year Plan for Digital Economy Development” pointed out that by 2025, the digital economy will move towards a period of comprehensive expansion, the added value of the core industries of the digital economy will account for 10% of GDP, and the scale of software and information technology services will reach 14%. trillions.
With the help of the policy, the B-end is certainly a blue ocean, but as a late entrant, Kingsoft has its competitive weaknesses.
The B-side is different from individuals, especially for large customers. It takes a lot of time to complete the migration of documents and the development of employee habits. The conversion cost is high, and the most direct low-price competition strategy will fail. This is also the first entrant. moat.
In addition to internal, B-end customers have their own suppliers upwards and customers downwards, thus forming a network of relationships. The choice of office products by companies in the relationship network is often affected by the companies they have business dealings with.
Ali, Tencent, and Bytes are big companies themselves, with stronger voice and more traffic. Their Dingding, Qiwei, and Feishu will radiate through their business, forming a barrier. These are all Jinshan Offices. not available.
Kingsoft and Microsoft have fought fiercely for 30 years. After tortuous and hardships, they have today’s status in the C-end. It may be more difficult to replicate the success of the C-side on the B-side. Kingsoft Office requires more than time.
(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/2022-07-13/doc-imizirav3213821.shtml
This site is for inclusion only, and the copyright belongs to the original author.