Baidu Cloud expands its recruitment by 2,000 people and sets a revenue target of 10 billion yuan. Robin Li is "investing heavily" in cloud computing. Can the laggards among BAT catch up?

After experiencing the cusp of the storm in 2018, cloud computing has become more popular in 2019, and it is still a "hot commodity" that the giants have invested heavily in. On February 26, according to Caijing, Baidu Cloud will be upgraded to a key strategic business of Baidu, and will recruit nearly 2,000 people this year. Baidu Cloud currently has about 1,900 employees, more than doubling the number of employees.

Among the three BAT companies, Baidu was the last to realize the potential. Baidu Cloud was only established in 2016, three years later than Tencent Cloud in 2013 and seven years later than Alibaba Cloud in 2009. At that time, Jack Ma and Pony Ma were looking for new business growth points for e-commerce data or social networks. While they were "galloping" in the field of cloud computing, Robin Li was still intoxicated by the huge profits brought by search engines. When Baidu was gradually left far behind by Alibaba and Tencent, Robin Li finally began to embrace cloud computing and invested heavily in "AI + cloud computing".

Different from the B2B strategies of Alibaba Cloud and Tencent Cloud, Robin Li believes that Baidu Cloud is an ABC cloud, that is, the trinity of "AI artificial intelligence + big data + cloud computing". Different from traditional cloud computing, specifically, Baidu Cloud is the product of the combination of Baidu cloud technology and AI technology, and it plays the role of outputting Baidu's overall technical capabilities.

“AI+Cloud”, can Baidu enter the same track as AT?

Since 2016, Baidu has been developing AI+Cloud for three years. Let’s use data to show how effective it is.

Baidu's fourth quarter report for fiscal year 2018 showed that Baidu Cloud's revenue reached RMB 1.1 billion, a year-on-year increase of more than 200%, and its annual revenue reached approximately RMB 3.3 billion. The rapid growth of Baidu Cloud's business proves that Robin Li's AI+Cloud has indeed achieved initial results.

In addition, during the 2019 Spring Festival Gala red envelope interaction between Baidu and CCTV, the total number of audience interactions reached 20.8 billion times. Baidu survived the huge traffic peak and became "the first Internet company to withstand the impact of the Spring Festival Gala red envelopes ." This indirectly proves the support capabilities of Baidu Cloud.

Although it has achieved remarkable results, the "congenital deficiency" of starting late has led to a huge gap between it and Alibaba Cloud and Tencent Cloud, which may be difficult to make up in the short term. Moreover, with advertising revenue growth falling short of expectations and the status of AI+Cloud significantly improving, does Baidu, which has always been very demanding on revenue and commercialization, have enough time and energy to wait for Baidu Cloud to cultivate and expand the market?

Moreover, as Alibaba and Tencent continue to focus on artificial intelligence, whether Baidu Cloud can still maintain its differentiated advantages in the field of AI is a question that Baidu Cloud must face and answer during its development.

Next, we will still use data to understand how big the gap is between Baidu Cloud and Alibaba Cloud and Tencent Cloud.

According to the financial report, Alibaba Cloud's revenue reached 21.36 billion yuan in 2018, an increase of about 20 times in four years, making it the largest cloud service company in Asia. In comparison, Baidu's 3.3 billion yuan is only a fraction.

Data shows that in the Chinese market, Alibaba Cloud’s market share is equivalent to the sum of the 2nd to 9th place.

Cloud computing has always been Alibaba's long-term strategy. In the past 10 years, Alibaba has invested more than 43 billion yuan in Alibaba Cloud. Not long ago, Alibaba announced that it would upgrade Alibaba Cloud to Alibaba Cloud Intelligence Business Group, integrate the entire group's technical team, and fully combine the technical strength of the group's middle platform and DAMO Academy with Alibaba Cloud. The goal is to build an intelligent infrastructure based on cloud computing for the whole society in the digital economy era.

So, what about Tencent Cloud?

Tencent Cloud's revenue in the first three quarters of 2018 exceeded 6 billion yuan, far exceeding Baidu Cloud.

Tencent Cloud was founded in 2013. Following Alibaba Cloud’s example, it invested in a series of enterprise-level big data and IaaS developers in 2016. In September 2018, Tencent established the Cloud and Smart Industry Group (CSIG), which will integrate the Tencent Cloud business under the original Social Network Group (SNG), the audio and video team of the original SNG, the Youtu AI Lab team, the smart retail of the original Corporate Development Group (CDG), and the Internet + business of maps, security, and incubators of the original Mobile Internet Group (MIG).

This approach further enhances the strategic position of cloud computing and provides a unified entrance for Tencent's to B business for the first time. Cloud computing is to B and is the foundation for Internet companies to do B-side business, so its strategic position is particularly important. In Ma Huateng's view, Tencent's to B business should be considered from the perspective of C, which is also the characteristic of Tencent Cloud.

From the perspective of the global market share of cloud computing, it has almost been monopolized by giants, which means that only giants can play cloud computing. One of the main reasons is that the strong to B market demand for cloud computing can develop rapidly in the giants' vast ecological chain.

We can see that whether it is Amazon, Google, Microsoft, or Alibaba Cloud, Tencent Cloud, or Baidu Cloud, they all have one common feature: they are not independent businesses, they are not directly developed from 0 to 1, but businesses that have evolved naturally from the giants' ecosystem. The ecological advantages of the giants can promote the rapid expansion of cloud computing, and in turn, cloud computing will expand the giants' ecological territory and find new business growth points.

Therefore, given the fact that public clouds cannot be replaced at will in the B-end market, BAT's cloud computing competition is actually a competition between their respective ecosystems.

Alibaba Cloud was initially established because of the imbalanced allocation of e-commerce server resources. For example, during various holidays, Taobao had very high requirements for server resources, which led to redundant server resources during normal times. Alibaba Cloud then opened up these resources, and its earliest customers were Taobao sellers.

When Tencent Cloud was developing an open platform, it found that many developers were unable to build a platform to serve users in the short term. So Tencent took the opportunity to develop a cloud and provide services.

Alibaba Cloud and Tencent Cloud initially served small and medium-sized customers. These customers had high sales costs and low paying ability. However, due to limited IT costs and capabilities, they had a natural demand for cloud computing. There was no better way to acquire such customers than by building an ecosystem.

Compared with Alibaba Cloud and Tencent Cloud, Baidu Cloud is not lacking in B-side genes. On the one hand, its online marketing business naturally connects many B-side manufacturers. On the other hand, Baidu's ecosystem in areas such as autonomous driving and AI is gradually expanding, and the market and demand for business growth have already been formed.

From the perspective of cost, technology, data, security and even strategy, Alibaba-affiliated companies will basically not deploy their systems on Tencent Cloud or Baidu Cloud. Therefore, facing more small and medium-sized enterprises, how many companies BAT can include in their respective "systems" through cloud computing will determine how far they can go in the future. Ma Huateng once pointed out that the value of cloud computing lies in "ecosystem basic services" , which, as ecological infrastructure, will inevitably be highly valued.

Tencent has rich experience in social relationships, gaming entertainment, digital content, etc., and Tencent Cloud has a natural advantage. Although Baidu's AI + cloud strategy has a bright future, it is still inferior to Alibaba and Tencent in terms of execution and implementation. It is difficult for Baidu to enter the first echelon.

The overseas cloud computing market has been dominated by the three giants Amazon, Microsoft and Google, and the same story will be played out in China. What is certain is that Alibaba and Tencent will not be absent from the first echelon, and it is still unknown whether the other giant that will catch up will be Baidu, Huawei, or someone else.

Author: Yu Sanren

Source: IoT Think Tank

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