Jinshan Cloud is a dream that lasts ten years, shattered in a moment

Zhu Hua

Zhu Hua has strong fighting power, so he rose rapidly within Kingsoft Cloud and was singled out to be in charge of the Internet business department, focusing on video cloud.

Kingsoft Video Cloud was officially launched in June 2015. At that time, it caught up with the trend of live broadcasts and short videos and became the second growth point of Kingsoft Cloud.

Three months later, during the 70th anniversary of the victory of World War II, Kingsoft Cloud provided cloud services for Toutiao's live video broadcast, withstanding a peak of 2 million users and a traffic peak of 1.2Tbps, with the freeze rate reduced to 0.5%. In June 2016, it launched a video cloud solution for multi-scenario live broadcasts.

Many old employees of Kingsoft Cloud told Leifeng.com that Zhu Hua is a down-to-earth person, but unfortunately he has a bad temper.

He is a technical talent truly cultivated from within Kingsoft Cloud, and is capable not only of R&D but also of business.

Three months before Zhang Hongjiang retired, he promoted Zhu Hua to SVP, becoming the third-in-command within Kingsoft Cloud after Wang Yulin.

Under the attack of two business giants Liu Zhigang and Zhu Hua on the front line, Kingsoft Cloud has ushered in the moment of blooming in both game cloud and video cloud. Kingsoft Cloud has internally put forward a statement that it will become the same as Alibaba in the field of cloud computing. KAT is the stand-alone company of Cloud and Tencent Cloud, and K is KingSoft.

Before the price war, according to IDC's public cloud report, Kingsoft Cloud was ranked among the top three in the market and maintained that position for a long time.

However, the good times did not last long and were shattered by repeated internal executive turmoil and price war and dimensionality reduction attacks by external powers.

On the evening of September 13, 2016, Kingsoft Group suddenly announced that current CEO Zhang Hongjiang would retire on December 1, and Xishanju CEO Zou Tao would succeed the group CEO. At the same time, Zhang Hongjiang also left the position of Kingsoft Cloud CEO and was replaced by Wang Yulin. .

Zhang Hongjiang

There are different opinions on the reasons for Zhang Hongjiang's sudden retirement. Judging from the results alone, Zhang Hongjiang's departure kicked off the alternation between Byte and Xiaomi, the two leading companies in the past decade. There are different opinions on the reasons for Zhang Hongjiang's sudden retirement. Please pay attention to Leifeng.com's follow-up reports.

In the past few years, he has switched careers to become an investment partner, and served as the first chairman of the A&F Research Institute. In 2022, he was elected as an overseas member of the U.S. National Academy of Engineering. It is clear that he is an old horse who is still eager to work hard.

After Zhang Hongjiang left at the end of 2016, Zhu Hua followed suit and resigned from Kingsoft Cloud.

Zhu Hua, who was at the peak of his career at that time, wanted to take over more business within the company and establish an independent BU while Video Cloud was rising and highly valued, so as to truly "establish a territory". However, the company could not support his needs, which became an irreconcilable disagreement. Later, a team-building accident occurred in Zhu Hua's team, and Zhu Hua was forced to resign. An old friend commented on him, "He was still too greedy . "

After being released, Zhu Hua went to Taobao to work as P9 and reported to Zhuang Zhuoran, the then head of Taobao's technical line. In 2020, he went to Huobi.com as CTO.

The one who benefits from Zhu Hua's departure is Liang Shouxing. The two had fought frequently before, and once Liang Shouxing was so angry that he found a new job outside. As a result, after Zhu Hua left, Liang Shouxing took over the CDN video cloud business, with Qian Yifeng as the person in charge of video cloud technology. Liang Shouxing was the original Northern District Director of Qiniuyun. He was very capable, so he went from Director to SVP. However, some people described him as having a ruthless and ruthless air, and his ideas and methods were very direct, quite like Liu Bang.

Liang Shouxing

Song Wei also served as the government, enterprise and medical cloud division, and he also owned the people at the bottom of cloud computing. COO Liu Zhigang accepted Ying Shuling’s invitation to serve as COO at Hero Interactive Entertainment at the end of 2015.

The frequent changes in Kingsoft Cloud’s CTO/Technical No. 1 position have added a particularly strange touch to Kingsoft Cloud’s family tree.

After founding CTO Yang Gang left, Chen Jianxiong took over his responsibilities.

Then, the second CTO Fu Qingming, who was justly named, also resigned in 2015 before he was still in his seat.

Fu Qingming is Kingsoft Cloud's first CTO on the "short-lived list" and has been in the job for only one year.

Since then, Kingsoft Cloud’s CTO, or technical number one, has changed three or four times in a few years.

Fu Qingming came because Kingsoft Cloud needed to improve its user reputation and needed to find a technical talent to lead Kingsoft Cloud in doing real underlying research and development and infrastructure construction.

Some people say that Chen Tong recommended Fu Qingming to be the CTO from Sina right after he joined Xiaomi. But it was not only Chen Tong who contributed to this. Fu Qingming had friendships with several senior executives of Kingsoft Cloud at that time.

Fu Qingming

Fu Qingming previously worked on SAE within Sina and is a senior cloud computing expert. But when Chen Jianxiong left, Zhu Hua became independent. The original technical team was all members of Chen Jianxiong's team, so Fu Qingming worked as the CTO without real power at Kingsoft Cloud for more than half a year. He was quite helpless and soon left his job to LeTV Cloud. . For this reason, Fu Qingming became alienated from several colleagues who introduced him to Kingsoft Cloud, and he broke off diplomatic relations with these people for several years.

Hou Zhenyu, the later technical number one and senior vice president, was originally one of the technical founders of Baidu Cloud. He also brought a group of people from Baidu to Kingsoft Cloud.

Hou Zhenyu

Hou Zhenyu’s main task at Kingsoft Cloud is to develop AI cloud. He himself has strong technical ability, and also has the prestige and strength to build a team. However, Hou Zhenyu, who has been in Baidu's purely technical atmosphere for a long time, lacks some fireworks and sales experience, especially ToB customer service capabilities.

Since CDN accounts for too high a proportion of Kingsoft Cloud's business, the industry is in a state of internal competition and has been losing money. Therefore, Kingsoft Cloud needs some large projects to make up for its revenue. CTO, or technical SVP, is an important part of sales.

An industry insider who once served as the head of cloud computing for a large company said, "Kingsoft Cloud is a small company. If you want to meet with a customer 's chief engineer, the CTO must personally go ." Many plans can only be approved by the CTO, so how to get customers to integrate into their own plans is also a skill of the CTO.

Hou Zhenyu's past experience made it difficult for him to adapt to external tasks like Kingsoft Cloud. In addition, the priority of AI in Kingsoft Cloud was not as high as expected, so there was limited room for him to play. Therefore, he returned to Baidu at the end of 2018 and became the group vice president.

After Hou Zhenyu left, Liu Zhigang returned to Kingsoft Cloud as SVP, responsible for the company's government relations and preparing for its listing.

The next technical director to take over was Liu Tao, who was also a veteran of Baidu, but his rank and personal influence were not as high as Hou Zhenyu's. The level of talent he could attract was also relatively low, and even his subordinates at the technical director level were mediocre.

Liu Tao

However, Liu Tao has a good reputation both inside and outside the company. He is good at cooperating with customer technical personnel and is very eloquent. He was once called Kingsoft Cloud's "star of tomorrow."

In mid-2019, Liu Tao was in charge of Kingsoft Cloud's financial business. The big data project in cooperation with CCB was a key project for Kingsoft Cloud at the time, which directly promoted Kingsoft Cloud's D+ round of financing at the end of the year.

It is said that the CCB project was won by Lei Jun himself, but Liu Tao and Tian Kaiyan who were in charge at the time took advantage of it and have since risen to the top. Liu Tao also took over business lines except for government, enterprise and healthcare.

Later, because most of the energy was put on the business side, Qian Yifeng was asked to step forward on the technical side and serve as the technical director of the vertical industry line.

Tian Kaiyan is currently responsible for the operation and management of the group's technology research and development. There were rumors that Tian Kaiyan might become the next CTO. This was really surprising internally. He has no technical expertise and is obviously incompatible with the CTO setting of Kingsoft Cloud. . But this person made great contributions during the listing period and was deeply trusted by Wang Yulin.

The core reason behind the frequent changes in CTO/No. 1 technical position is that Kingsoft Cloud lacks core strategic planning and is always looking for opportunities and doing whatever has the fastest growth.

The fastest growing category was game cloud in 2015, video cloud in 2016, content review in 2017, and financial, government and enterprise projects after that. Before 2020, everything was about going public, and after 2020, everything was about profits.

As to how much of the performance are real figures and how much are "over-orders" made for the purpose of listing, there are many rumors among Kingsoft Cloud employees, and they are said to be hidden in a PPT report that Tian Kaiyan presented to Wang Yulin.

Kingsoft Cloud has never been able to develop core competitiveness over the years due to its operations just for the sake of numbers.

There is nothing wrong with chasing the trend, but the mistake is that Kingsoft Cloud has set the number one technology position as an external role instead of an internal role: it has been reduced to a veteran who provides customer-oriented solution support instead of "spending those damn production and research costs." “Technocrazy at its lowest level.

The essence of cloud technology does not lie in how advanced it is, but in providing the same services to customers. If your cost is lower than that of your competitors, you will be able to survive price wars and tug-of-wars.

The role of the technical number one in the middle is to be immersed in the computer architecture, improve the utilization efficiency of computing resources, achieve higher performance with the lowest production and research costs, and empower the product department and sales department to dare to compete in price wars and see-saws. The confidence to give it a go in battle.

If the setting of CTO and core technical team deviates, technology companies will become project support companies.

Second-tier manufacturers and first-tier giants can never compete head-on. The advantage of the former lies in their mobility and the ability to move from one place to another, taking advantage of time differences. Before being suppressed by large manufacturers, they can use the low-cost barriers brought by technology to earn more profits in the existing track and then calmly change their home court.

Just like in basketball, when a short guard with superb skills plays against a center, he relies on flexibility and the rhythm of dribbling to shake off his opponent, and finally uses the time difference to avoid being blocked and score a layup. He does not rely on physical confrontation to beat the opponent.

However, Jin Shanyun and his like, who lack technical competitiveness, are extremely passive on the playing field. They maneuver when they shouldn't maneuver and fight when they shouldn't fight: they either run away at the first touch; or they get involved in the quagmire of vicious competition with huge losses and sink deeper and deeper. The deeper.

Before the giants sound the clarion call for a price war.

Kingsoft Cloud missed the first excellent opportunity in the capital market and failed to integrate 21Vianet .

In 2014, Kingsoft Software and Xiaomi Group invested in 21Vianet. The original plan was to privatize 21Vianet, led by Lei Capital.

At the 2015 China-US Economic Forum, Xiaomi announced that in addition to Kingsoft Cloud as its primary supplier, it will also begin to use the Windows Azure public cloud operated by 21Vianet based on Microsoft technology as the cloud storage platform for its "Xiaomi Cloud Service".

Some people thought that this was Lei Jun's concern about Kingsoft Cloud, but in fact he was preparing for the merger of the two.

However, in 2016, Century Internet introduced the Enlightenment System, and the Jinshan System lost control, and each of them went further.

Another way of saying it is that Kingsoft's failure to integrate 21Vianet was related to the unprecedented major crisis Xiaomi encountered in 2016. Lei Jun's heart was no longer in the cloud and he was unable to promote matters other than Xiaomi mobile phones.

If the two can be integrated, Kingsoft Cloud can save a lot of costs and gain an advantage in the early stages of the cloud computing war.

Kingsoft Cloud’s former flagship business, game cloud, has been hit by a double blow from Tencent and Alibaba.

Tencent Cloud was late to the party at first, and Kingsoft Cloud took the opportunity to attract a wave of gaming customers. Later, Tencent required all ecosystem partners, invested companies, and products released by Tencent to use Tencent Cloud.

With this move, Tencent Cloud took away 50% of game companies.

There are also leading game companies in the market like Mihoyo that have reservations about Tencent Cloud. In addition to purchasing Alibaba Cloud, they want to find independent cloud vendors to cooperate in cloud gaming business.

At that time, Kingsoft Cloud had an invested company that helped miHoYo develop its cloud gaming PAAS platform, Weiling Era. Through their matchmaking, coupled with Kingsoft Cloud's own technological advantages, layout advantages, corporate relationships, etc., it won over super customers like miHoYo.

However, with the adjustment of Kingsoft Cloud's business, Mihoyo has taken a step further in building its own resources and using Alibaba Cloud.

Alibaba Cloud has been aggressive in its gaming cloud business and has quickly won over some leading gaming companies such as Perfect World . Even if it loses money, it cannot let Kingsoft Cloud and Tencent Cloud take it away, so it offers a 30% to 40% discount.

Later, Huawei Cloud appeared on the market, and Kingsoft Cloud's space became even smaller.

Kingsoft Cloud, which was shrouded in the shadow of the failed integration of 21Vianet and the pressure from large companies, launched a plan in 2019 that could have changed the landscape of cloud computing in China: the merger of Kingsoft Cloud , JD Cloud, and Baidu Cloud .

This is Kingsoft Cloud’s last chance to stay on the front line and fight.

At that time, Kingsoft Cloud stood between life and death. The profits of CDN, its main source of revenue, became increasingly meager until it was losing money. In addition, it had to face the carve-up by Alibaba Cloud, Huawei Cloud, and Tencent Cloud. At that time, IDC’s 1M bandwidth price on the market was only 4 Yuan, while the cost price is still six Yuan, and the difference in price is subsidized by major manufacturers.

Kingsoft Cloud's CDN revenue in 2020 reached a historical peak in both absolute value and relative proportion, accompanied by an unprecedented 40% loss ratio. During this process, rumors of "losing money to the company and enriching sales" were heard everywhere, but under the tone of everything for numbers and listing, many "rumors" and "reports" were left unresolved.

Independent manufacturers like UCloud lacked financial support, so when the price war reached a break-even point, they immediately gave up.

Kingsoft Cloud followed up very resolutely at the time, with the same crazy subsidies. As a result, the support Kingsoft could provide was limited and the follow-up was weak. Soon it ran out of capital to continue, and its industry ranking dropped rapidly.

Therefore, this merger is crucial for Kingsoft Cloud.

For this reason, Kingsoft Cloud even postponed its IPO plan, waiting for the merger to settle.

Liu Qiangdong and Lei Jun had met several times and discussed the merger in detail. In the end, it did not succeed because Liu Qiangdong and Lei Jun had a disagreement about who would be the chairman of the new company. On the eve of the signing, the plan was abruptly stopped. For details of the merger of the three clouds, please read " The cloud giants that intercepted Alibaba and Tencent: conspiring to merge and difficult transformation ".

After the merger fell through, Kingsoft Cloud launched its D+ round of financing. What is being told in the capital market is the story of a third-party neutral cloud, deeply involved in vertical industries, and serving leading KA customers.

But the story itself is correct nonsense. The mainstream manufacturers on the market at that time were all positioned in this way and unanimously believed that they were doing something difficult but right.

The top KA customers mentioned by Kingsoft Cloud are all stationed in the government and financial fields, and these fields are exactly where BATHs want to make benchmark cases, and the fight is particularly fierce.

In addition, the projects in these fields are large and heavy, difficult to deliver, have long collection periods, and the project failure rate has remained high for a long time.

First of all, Kingsoft Cloud cannot compete with the giants in terms of government relations and resource implementation capabilities, which will be discussed in detail in the next chapter.

In the financial business, customers attach great importance to the supplier's PaaS layer, especially the product capabilities such as databases, and this is precisely the weakness of Kingsoft Cloud. The underlying cloud resources alone are not enough to impress customers. Therefore, big banks also tend to cooperate with giants such as Alibaba and Tencent.

During that round of financing, several top PE firms in the industry, including PAG, came to see it. They were concerned about the competitive relationship between Kingsoft Cloud and several giants, and believed that the story of deepening its presence in vertical industries lacked room for imagination. What the capital market wanted to hear was that Kingsoft Cloud and Kingsoft Office WPS would increase their collaboration and tell the story of the Chinese version of Microsoft Azure + Office .

This story is even more difficult to tell. Although they both belong to Kingsoft Group, the management background, industry structure, business volume, etc. of Kingsoft Office and Kingsoft Cloud are not suitable for binding. Kingsoft Office is a darling in the market and does not want to be bound by Kingsoft Cloud.

In the end, the D+ round of financing led by China Online Investment and co-invested by CCB International still gave a valuation of US$2 billion, which was not much higher than the D round. By the time Kingsoft Cloud restarts its IPO, the market environment will be even worse than before the merger negotiations.

On the eve of the company's most critical business, Kingsoft Cloud withstood the pressure and rang the golden bell of Nasdaq.

Entrepreneurs from the Lei Jun family know that whoever can build a billion-dollar listed company will receive a kilogram of gold bricks donated by Lei Jun himself.

This gold brick has been received by Li Xueling, the founder of Joyy, Yu Yongfu, the former CEO of UC, Sun Taoran, the founder of Lakala, and He Xiaopeng of Xpeng Motors. It was also received by Wang Yulin at the Nasdaq celebration dinner on May 8, 2020.

The only Chinese pure cloud service provider in the US stock market

At that time, everyone thought this was the beginning of a new stage for Jinshan Cloud, but they did not expect that it was already at its peak.

After going public, in order to ensure profits, Kingsoft Cloud chose to shrink some low-profit businesses.

We won’t do some large government projects that would require competing with Alibaba and Tencent in terms of investment; we won’t do large bandwidth businesses that don’t make much money and have high costs.

Everything is working towards profit, and CDN, which has the largest revenue but also the largest loss, has become the hardest hit area.

Last year, the entire CDN executive team was marginalized, and Zong Jie, the general manager of CDN and Video Cloud, has been recuperating at home due to illness.

Although he belongs to the old CDN faction, he does not get along with COO Liang Shouxing. Liang Shouxing is currently in charge of the entire industry cloud business of Kingsoft Cloud, competing with Liu Tao who is in charge of the public cloud.

In terms of government projects, Kingsoft Cloud also has problems. When companies like ATH (Alibaba, Tencent, Huawei) do projects, they can jointly build projects with regions and invest billions in local governments for 10 to 20 years. It will take time for Kingsoft Cloud to slowly recover its costs. It is very difficult for Kingsoft Cloud to invest 100 million in one place.

ATH has a lot of resources to exchange with the government. For example, WeChat Pay and Alipay can exempt a local government from the channel fees of the payment channels used by the government to collect money, and exchange these for investment in cloud computing. Local governments are short of cash and are very interested in such resources. Resources like Kingsoft are relatively limited and it is difficult to negotiate orders.

In 2020, with the power of listing, Kingsoft Cloud launched the plan of surrounding cities from counties. Since Kingsoft Cloud cannot talk to local governments in 1-3 tier cities and has no opportunity for equal negotiations, it launched a strategy of sinking to 3,000 county-level cities across the country.

Because county-level cities are more welcoming to listed companies, this plan is too large, and the cost of sinking is relatively high and fragmented, and it is still in progress.

The problems that listing brings to Kingsoft Cloud mainly lie in two aspects.

On the one hand, the performance pressure after listing forced Kingsoft Cloud to cut off and shrink some unprofitable growth-stage businesses, such as the RTC (real-time audio and video) business of the interactive entertainment product center.

This product integrates the technical advantages of Kingsoft Cloud in its mature video cloud business, which has been honed over the years. A team of less than 100 people developed and launched 90% of the results of Agora in just half a year, which took hundreds of people several years to achieve. However, there was no income in the short term, so it was abandoned.

The AI ​​business was also eliminated. Su Chi, the chief algorithm architect of Kingsoft Cloud AI and the head of the artificial intelligence product center, joined Simou Technology this year with his AI experience and established a Beijing branch.

On the other hand, when a start-up company suddenly becomes a listed company, its original purpose is achieved, and people's hearts suddenly become distracted. The qualitative leap in wealth accumulation of core executives will more or less cause a wavering of will.

But these wealth are not tangible and can be put in your hands now. The boss is worried that the people below will cash out and leave immediately, and the people below are worried that the boss will delay the exercise of power.

Everyone is staring at the stock price. When the stock price is high, everyone is happy. When the stock price is low, they are full of resentment and feel that they have worked in vain for the past ten years.

A core executive of Kingsoft Cloud described himself as "from a poor student background. I usually earn tens of thousands of yuan a month to support my family. I have no house or car in Beijing. Suddenly one day I am worth hundreds of millions. Who will not change? I will change." Colleagues will change, your boss will change, and even the way your friends look at you will change.”

As time went by, the trust built up during the start-up period faded and suspicion increased.

Several ordinary employees of Kingsoft Cloud expressed similar thoughts when being surveyed by Leifeng.com, “Boss Wang Yulin is particularly good at checks and balances of power. He will suppress any executive who is too powerful, and make adjustments every six months. Replacing senior executives is like engaging in a palace fight."

When people's interests are inconsistent, all confrontations seem like palace fighting.

Frequent turmoil in the top management, swaying business, and plummeting market value are the current situation in the current environment, although this is not the only company facing this problem.

However, Kingsoft Cloud, which has Lei Jun's support, obviously failed to meet the expectations of the industry and the capital market.

This brings up a core question: Is Wang Yulin a qualified CEO?

We received many complaints during our research, such as Wang Yulin asking his assistant to jump the queue when employees were queuing for nucleic acid tests, and asking his assistant to cancel employees' massage appointments when he wanted to get a massage, etc. In addition, during the epidemic, Wang Yulin had to be quarantined every time he returned to China. Wang Yulin's family lives in Singapore, and he was away from China for nearly half of the time. Many people wondered if the company's declining performance was related to the CEO's absence from the company?

These trivial accusations, complaints, and attacks do not seriously affect Wang Yulin's personal character and ability, but they all indirectly illustrate one thing: Kingsoft Cloud's rapid decline in recent years, the depressing atmosphere within the company, the vacillating strategic decisions, and even the insignificant trivialities of life have become reasons for Wang Yulin to be criticized.

In August 2021, Kingsoft Cloud announced the acquisition of British enterprise management software Camelot as part of its business transformation. Camelot's co-founder, president and other core senior managers joined Kingsoft Cloud. On February 23, 2022, Kingsoft Cloud appointed Camelot CEO Wang Shouhu as President of Kingsoft Cloud, responsible for the public service sector business.

However, according to relevant business personnel, Wang Shouhu has been isolated from non-Camelot businesses for a long time and has not been truly involved in Kingsoft Cloud's daily business management.

In the past year, Kingsoft Cloud has laid off four consecutive employees, laying off more than half of its employees in total, and many middle-level managers at the director level have also been laid off. On average, once every three months, it can be said that everyone lives in precarious conditions.

Kingsoft Cloud’s daily life in the past two years is that every two or three months before and after each organizational structure adjustment, people are panicking. After the adjustment is completed, everything is left to be done, re-establishing mechanisms, formulating new strategies and tactics, and half a year has passed since everything is ready , ushered in a new round of adjustments.

During this period, many people were reassigned to business units, and many people with no medical or financial experience had to start over. Many historical contracts were left unattended or unable to be delivered due to personnel changes, and the company's reputation declined every day.

To be fair, in a market where BATH giants are using price wars to crush competitors and using resource advantages to attack competitors, Kingsoft Cloud was able to successfully list on the Nasdaq, and during the pandemic, became the only pure cloud service provider in the U.S. stock market. All of this is inseparable from Wang Yulin's contribution. The team's rapid dispatch is also a manifestation of managers' need to respond quickly to market changes. It is unreasonable to hold Wang Yulin accountable for all decision-making issues.

Ten years ago, Lei Jun believed that Kingsoft Cloud was the future of Kingsoft. In an interview in June 2013, he said, "The one who is betting on the next ten years at the group level is Kingsoft Cloud." It seems that these ten years are Lei Jun's. A sweet dream.

Many Kingsoft Cloud executives are most envious of Zhu Hua. Although he is a loser in the struggle, he is a winner in wealth. He sold his shares at the peak of Kingsoft Cloud's stock price and made a lot of profit.

Not much confidence left. For Kingsoft Cloud's stock price to increase twenty-fold and return to its peak, it now seems more difficult than reaching the sky.

But the confidence is still there. A week after Wang Yulin resigned, Jinshan Cloud has begun to change. The ongoing round of layoffs was halted, and new CEO Zou Tao did not approve of the previous adjustments and had to redo the plan.

Yu Jun, who is in charge of medical care, had originally planned to resign, but now he is staying temporarily; recently, some senior executives who are no longer in the company are coming back to report on their work.

There is an old Chinese saying that goes, "An army in mourning will win." After a cold winter, Kingsoft Cloud's morale has rebounded from the bottom. After changing its flag and banner, it may really be able to reach the next peak.

This article is a sequel to "Five Questions about Cloud Involution". If you are a witness to the transformation of cloud vendors and have a story to share, please add the author on WeChat: nanjieyu