What are the competitive advantages of cloud computing or neutral cloud vendors such as Kingsoft Cloud? -Qianlong Net China Capital Net

A few days ago, market research firm Canalys released data showing that in the first quarter of 2023, global cloud infrastructure service spending increased by 19% to $66.4 billion, still one of the fastest growing parts of the IT market. However, due to the lack of obvious global macroeconomic recovery, investment continued to slow down, and the growth rate of the industry was lower than 20% for the first time. Overall, the cloud computing industry is still in a period of dormant demand in the short term.

However, since the beginning of the year, ChatGPT has triggered an upsurge in the generative artificial intelligence industry. It is generally believed in the industry that generative artificial intelligence is expected to become a new fulcrum for digital transformation in traditional fields, and the development of application scenarios will also benefit the entire industry chain including cloud computing. . There is even a view that the demand for cloud services in traditional fields will take over from the Internet and become the core driving force for future industry growth. According to Frost & Sullivan’s forecast, the scale of my country’s non-Internet cloud service market is expected to exceed RMB 560 billion in 2026.

Especially within the scope of the Chinese market, along with the introduction of many favorable policies to encourage the digitalization of traditional industries, such as the “Overall Layout Plan for the Construction of Digital China” released on February 27, 2023, it has further confirmed the strategic position of the digital economy, starting from supply support the development of the cloud computing industry. This also means that the cloud computing industry will accelerate to usher in a new industrial inflection point, from Internet cloud services with more basic services, to a period of industrial cloud services with more specific and personalized needs.

Along with changes on the demand side, the situation on the supply side of the industry will also change. Cloud computing service providers have begun to more accurately position their business scope based on multiple dimensions such as user scale, vertical industry characteristics, and segmented field needs, combined with their own resources. As well as the main body of market customers, industry competition tends to be differentiated, thus forming a “competitive segment”.

Represented by Alibaba Cloud and Tencent Cloud, leading domestic cloud manufacturers pay more attention to self-developed technology and product expansion to improve quality and efficiency; upstream resource providers represented by operators and Huawei Cloud have obvious advantages in government and enterprise cloud, while The third-party independent cloud vendors represented by Kingsoft Cloud focus on subdividing vertical industries. In addition to government affairs, more application scenarios such as finance, medical care, and industrial manufacturing are gradually opening up. The needs of globalization can be met in a timely manner, the service is more flexible and efficient, and there is also a certain room for growth.

Take Kingsoft Cloud as an example. As a cloud service provider from the Jinshan family, the company has a strong “enterprise service” gene and acumen. solutions, and has accumulated deep service advantages.

In recent years, the company has actively grasped the opportunity that the driving force of the cloud service industry has shifted from the Internet to traditional industries, and has further focused on public services, finance, and medical industries, which have a large demand for data migration to the cloud and collaborative management, and a high degree of business standardization. Government Cloud, Haidian Education Cloud, Jiangsu Government Cloud, Zibo Government Cloud, Chibi Government Cloud and other series of industry cloud benchmarks have fully implemented in the government cloud, education cloud, enterprise cloud and other industry clouds.

It is understood that because industry cloud customers usually bear the cost of the underlying equipment (such as Internet data centers and cloud resources such as servers), their gross profit margin is often higher than that of public cloud services. According to its announcement in the first quarter of 2023, the industry cloud service revenue reached 710 million yuan, and the gross profit margin increased by 23.8% year-on-year. Benefiting from this, the company’s gross profit margin continued to increase to 10.4%, a record high.

The Everbright Securities Research Report believes that Kingsoft Cloud’s undertaking projects are expected to play a benchmarking effect and consolidate the company’s market position in selected industries; modular products can help companies quickly replicate resources and experience to other customers in the same or adjacent vertical industries, and continue to promote The industry penetrates and boosts the overall gross profit margin, bringing Kingsoft Cloud a virtuous circle of contributing revenue and improving the profit structure.