Written by Wu Xianzhi Wen Yehao
Editor | Wang Pan
By the end of the year, Ali ushered in a new round of organizational restructuring as scheduled.
E-commerce represents the background, and cloud computing relies on growth. After the last adjustment of the organizational structure, the e-commerce sector led by the B department handed over a resilient answer sheet: GMV on Double 11 was roughly the same as last year, and the strong performance of the Taobao department triggered discussions on the truth and practice of Jingdong. Saw “1.5” truth tellers. On the other hand, Alibaba Cloud seems to have encountered new challenges, so that the growth in the first three fiscal quarters of this year was obviously dragged down by multiple reasons.
Zhang Yong likes to use single words to describe the direction. The change from “fix” at the beginning of the year to “advance” at the end of the year is obviously because of changes in the macro situation, and Ali can have more predictable things.
With the rise of the operator cloud, the structure of BATH is in jeopardy, but the gap between Alibaba Cloud and its pursuers seems to be narrowing. According to Canalys data, in Q3 of 2022, Alibaba Cloud will have a market share of 36%, ranking first, followed by Huawei Cloud with a market share of 19%, and Tencent Cloud with a market share of 16%. The real problem is that Alibaba Cloud’s growth rate this year has been lower than that of its peers.
Secondly, on December 18, a serious service interruption occurred in the availability zone C of Alibaba Cloud Hong Kong Region. During the whole process, Alibaba Cloud exposed its response speed, service capability, and many potential security risks, which required a personnel innovation.
In a longer period of time, the loss of major customers may be the real reason why Zhang Yong intends to “window guidance”. Cloud services lose bytes. Now we are facing unprecedented challenges.
From “cloud and nails as one” to “cloud with nails”?
On December 29, Zhang Yong successively sent two letters to all employees. The first letter was to all employees of Ali Group. The core content was to build corporate self-confidence and adjust personnel.
The second internal letter is a letter to all employees of Alibaba Cloud, with two core points of view: one is “the first time to write a letter as the president of Alibaba Cloud”, and it takes over the appointment and dismissal of the previous letter. The other one is actually a continuation of the previous “teaching”, which expresses a core meaning: “customer trust” is the main reason why Alibaba Cloud has become so big, alluding to the cloud service incident that happened a few days ago.
Compared with the fine-tuning of the e-commerce B system, the appointment and dismissal of Alibaba Cloud CEO and CTO has attracted the most attention. Former CEO Zhang Jianfeng resigned as CEO of Alibaba Cloud and retained the post of Dean of Dharma Academy. The successor is Zhang Yong, Chairman of the Board and CEO of Ali Group, and directly in charge of Dingding. This led to the responsibility of DingTalk and Yun, indicating that some fine-tuning of the “cloud-nail integration” strategy has taken place, and DingTalk has become more important.
In addition, Alibaba Cloud’s CTO was handed over to Zhou Jingren, and Cheng Li stepped down as the group’s CTO and the executive vice president of the DAMO Academy, and his successor was Wu Zeming, a post-80s executive. Most of the views believe that the stalling of Alibaba Cloud’s revenue growth is closely related to the previous negative cloud services. It would be too simplistic to attribute the above problems to individuals. Another deep meaning of Alibaba Cloud’s organizational structure adjustment is to revise the “cloud-nail integration” strategy.
Under the “Cloud and Nail Integration” strategy, DingTalk plays two roles, an enterprise-level office (online collaboration tool) and an application development platform (low-code). The former is related to business organization, and the latter is related to business management. Under this strategy, the enterprise digitalization provided by Ali can be roughly understood as DingTalk, a tool that helps enterprises solve people and affairs, accelerates digitalization, and thus opens up the demand for enterprises to go to the cloud.
“The game of collaborative office products is very special. Although it is to provide services for enterprises, it is actually every employee who has the final say. If it is not easy to use, then no matter how powerful enterprise managers are, they will not be able to ‘overlord’. ” DingTalk once regarded monthly life as very important. According to an industry insider, this is a scale with a strong C-end color, and it is impossible to objectively measure the strength of B-end products. “What monthly life does To B product look at? “
The integration of cloud and nail means that once an enterprise is decoupled from DingTalk, the development of cloud business will be hindered, so Zhang Yong will take charge of DingTalk.
Logically speaking, companies will never replace online collaborative products unless they have to. No one would have thought that Xiaopeng would be the first. In January of this year, Xiaopeng Motors was still cheering for DingTalk, but around June, “you have to switch to a block”, and switched to other platforms regardless of the high cost.
Public information shows that Li Xiang played a role in fueling the flames in Xiaopeng’s “abandoning nails”. In addition to the factors of industrial chain transmission, there are deeper reasons. You must know that Xiaopeng paid a huge migration cost for this move: he did not hesitate to give up 39 native applications on DingTalk, abandoned free and chose to pay for other platforms, and even took on the time and management of 10,000 employees to migrate new products cost.
According to a person familiar with the matter, DingTalk’s portal and tool aggregation platform only exist as a foundation and have not been well integrated with the development of the enterprise. Therefore, in the view of the management, it needs to have the perseverance to break the wrist and find another place.
Specifically, the internal coordination of enterprises is highly dependent on meetings, and DingTalk’s “schedule” and meetings have not been effectively integrated, resulting in low communication efficiency in enterprises. In terms of project coordination, an insider said, “For project management, the coordination problem has not been resolved, and we still need to speak out in the group.”
The above-mentioned people believe that “a lot of repetitive work still has to rely on manual labor, which is a relatively concentrated pain point.” In addition, many companies have gone overseas to outline the second growth curve, such as Xiaopeng’s self-driving team in North America, and NIO’s overseas business in Europe. etc. DingTalk needs to provide some tools for internationalization, such as text and voice translation.
If DingTalk outputs more KPI-style management thinking, then Feishu focuses on outputting OKR. There may be no obvious difference between the two, but the collision of the two sets of “management thinking” is bound to cause differentiation: DingTalk It can inject a boost to bureaucratic organizations, and Feishu solves the problem of modular organizations fighting on their own.
Since the beginning of this year, low-code is DingTalk’s trump card to win over big customers. It should be noted that for many traditional industries, especially small and medium-sized enterprises, low-code still requires enterprises to pay a certain amount of time and cost to cultivate talents.
“There are 200 employees in the company, no matter they are active or passive, at least 25% of the personnel change in a year. If the company cultivates technical personnel, it is equivalent to raising children for others.” A beauty brand mentioned before when it talked about the digitization of enterprise management Phenomena are issues that DingTalk needs to think about at the moment. If enterprises cannot afford to cultivate talents, what can platforms provide them?
The “cloud-nail integration” strategy is good and bad. The good thing is that DingTalk’s product capabilities and development depth have been quickly cultivated. The disadvantage is that it cannot provide flexibility for enterprises.
Alibaba Cloud urgently needs a turnaround
Although the growth rate of Alibaba Cloud’s performance has been slowing down in the past few years, this is not a problem of Alibaba Cloud alone, but is related to changes in the overall environment of domestic cloud computing.
As we all know, pan-Internet players have always been the most important customers of cloud computing manufacturers, and as the Internet dividend is fading, pan-Internet players have tightened their belts, and cloud vendors will inevitably be affected.
At the same time, Alibaba Cloud is also facing the situation of major customers leaving. Take ByteDance as an example. As a major customer of Alibaba Cloud, it is not only transferring overseas cloud services to foreign manufacturers such as AWS and Oracle, but also has entered the cloud computing river through the volcano engine. became a competitor.
And this is one of the important reasons why Alibaba Cloud’s performance has been under pressure in the past two quarters. According to Alibaba’s third-quarter financial report, Alibaba Cloud’s revenue from Internet customers decreased by 18% year-on-year.
In addition, under the background of the contraction of the Internet industry, not only the relationship between cloud computing manufacturers and major customers will become more and more difficult to handle, but the new major customers will almost disappear. In recent years, the Internet context has never bred such as Players of the size of Byte and Pinduoduo.
But the aforementioned difficulties are all industry problems. From the perspective of Alibaba Cloud, its market share ranks first in the country, and it is the first to achieve a break-even balance. Compared with its peers, it does not have too much burden.
On the other hand, Alibaba Cloud, which has an earlier layout and entered hardware and chip research and development earlier, has stronger “hard power” than the lower-ranking cloud vendors. In a generally stressed environment, this will help its business reduce costs and improve quality.
For Alibaba Cloud, which urgently needs to seek growth in the “deep water area”, the pan-Internet customer base is gradually being eaten up, and government customers who are not short of money will naturally become the place for growth. But in this regard, the rise of the operator cloud objectively limits its competitiveness in the government and enterprise market.
According to a report from China Business Network, in the past year, among the government-enterprise digital orders of more than 100 million yuan announced nationwide, Mobile Cloud, China Unicom Cloud, and Tianyi Cloud received more than 200 orders, while Alibaba Cloud and Tencent Cloud only took When it comes to single-digit orders, the gap is quite obvious.
Based on this, even if Alibaba Cloud is a leading manufacturer, it may be difficult to compete with players such as Unicom Cloud, Mobile Cloud, and Tianyi Cloud in the government affairs market. The financial report shows that in the first half of this year, Unicom Cloud grew by 143.2% year-on-year, China Mobile Cloud grew by 103.6% year-on-year, and Tianyi Cloud grew by 100.8% year-on-year. Operator Cloud not only grew strongly, but also outperformed almost all Internet players.
With the decline of the pan-Internet, the operator cloud cannot be bypassed in government affairs scenarios, and traditional enterprises have become the only remaining incremental places.
However, for the cloud computing giants, the cake of traditional enterprises is not easy to eat. On the one hand, different industries and companies have different logics and different needs, so it is difficult to replicate solutions in batches; on the other hand, even if there is demand in the market, the actual contract amount is not large.
According to industry insiders, countless small and medium-sized manufacturers had to fight a price war in order to survive, and everyone won the bid at a low price. Even though Alibaba Cloud, Tencent Cloud and other players were involved in low-price competition in the early years to compete for the market, it is difficult for them to get involved in this vicious competition now that they are improving their quality and optimizing their business.
It is not difficult to see from this that Alibaba Cloud, whose growth is slowing down, will inevitably face certain resistance if it wants to reconstruct the growth curve through the broader government and enterprise market. In addition to precise force, Alibaba Cloud also needs to be alert to fires in the base camp.
Recently, a downtime accident occurred in Alibaba Cloud’s computer room in Hong Kong, perhaps because the downtime lasted for a long time and was not repaired for a long time. Many customers seem to have deep opinions on this. A person familiar with the matter revealed that during the recovery period of Alibaba Cloud, a company temporarily deployed a batch of AWS, and finally found that the experience of the latter was slightly higher.
It can be seen that the core of the current competition in the cloud industry may not be price or ecology, but stability and “no mistakes”. After all, limited by factors such as data security and migration costs, cloud vendors often have a strong binding relationship with customers. In this context, whoever makes more mistakes is more likely to have a crack in customer trust, and then be pried away by competitors.
Want big customers, or fight for small and medium-sized enterprises?
In any case, the current Alibaba Cloud is eagerly looking for new growth. However, the strategy of “integrating cloud and nails” has the meaning of jumping out of involution and returning to the status of enterprise digital service provider.
As mentioned above, enterprises in different industries and sizes have different requirements for cloud computing and even DingTalk. It is difficult for Alibaba Cloud to “need both”. In this context, regardless of how it cuts into various vertical tracks and solves the substantive problems of players in different industries, only from the perspective of customer size, whether it is to seek large customers or fight for small and medium-sized enterprises may become its current goal. A big choice to face.
However, this multiple-choice question is not easy to do. After all, in the current domestic market, it is not easy to find new big customers who have a strong demand for cloud computing.
Turning to overseas, agency data shows that as of the second quarter of this year, two players, AWS and Microsoft Cloud, accounted for more than half of the global cloud computing market, compared with only about 5% of the cake left for Alibaba Cloud. In other words, surrounded by AWS, Microsoft Cloud, and Google Cloud, the intensity of competition in overseas markets may increase rather than decrease.
Compared with finding large customers, capturing small and medium-sized enterprises requires more horizontal expansion of business to cover more business types.
But just like the advantages of the operator cloud in the government affairs market, many vertical subdivision industries seem to be a blue ocean, but they are actually full of various small and medium-sized digital service providers that are “tailor-made” for players in this industry. Compared with Alibaba Cloud, which “want everything”, it understands the industry better and understands what small and medium-sized customers need. Ali, as a “giant”, may find it difficult to eat these cakes hidden in the ant cave.
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