Year-to-date, for the cloud computing market in 2016, “integration, platforming, scenario, ecology, globalization†are all annual and eye-catching labels that can be added to it, but for market consumption. For the most part, the most obvious perception is that the major cloud computing giants are filled with smoke. Looking back at the rhythm of the price reduction of cloud computing giants this year, it can be said that "you sing me to stage, one is more exciting than the other, and the moon and the moon are like double eleven."
Months and months are like the double eleven cloud computing giant crazy price cuts for what?
First, the month and month are like double eleven, cloud computing giants cut prices crazy
On October 14, Alibaba Cloud announced at the Yunqi Conference that “the core cloud product in China has dropped by 50%â€; on December 15, at the Guangdong branch of Yunqi Conference, Alibaba Cloud announced a new round of price cuts: new user South China The regional cloud service offers a discount of 30%. The cloud database in all major regions of China is adjusted in price, with an average reduction of 20%. The cloud server exclusive instance has a maximum drop of 30%, and the “free package†plan is launched. The new user who receives the invitation code can be in the half year. Free use of 30 cloud products.
And seeing the current local share of the first Alibaba Cloud rushing all the way down the price, perhaps Amazon AWS, Baidu cloud, Tencent cloud, Qingyun these small partners' internal OS is: I wipe, Aliyun you cut the price 17 times a year is not enough What, but also to cut prices to engage in things, this is not okay, I have to accompany you to play, is not based on the technology and money can cut prices, come, mutual harm, brothers have to sell iron with you.
This is not, from October 21st to November 3rd, 2016, Baidu Cloud launched the Baidu cloud brand upgrade promotion campaign with the theme of “Seeing the future in the cloud, no promotion, no carnivalâ€, in this 13-day brand. Upgrading promotions and promotions has thrown a big wave of 75% discount to consumers. During the event, new and old users who purchase active products such as cloud server (BCC), flexible public IP (EIP), and relational database (RDS) can enjoy preferential discounts, up to 5% off, and enjoy a 15% discount on quarterly users. 20% off for half a year and 25% off for 1 year.
Just after Baidu, Tencent also joined the battle. In early November, Tencent Cloud announced in its announcement that it will comprehensively adjust its price for its four core products, with the largest drop of up to 3%, including Tencent Cloud Database (MySQL, TDSQL, MongoDB, SQLServer). , Redis) 3 years minimum payment of 3 fold, other cloud server, cloud storage and cloud security cloud product price discount of 50%, can be described as the price cut of Alibaba Cloud on the October Yunqi Conference. Microsoft Azure also announced that it will launch a new A-series virtual machine (Av2) in November 2016, which is 36% cheaper than the A-series standard virtual machine.
Amazon AWS/Qingyun saw that these families played so badly on the price cuts, and naturally they are unwilling to be lonely. Although the new ideas and price cuts are not as good as the previous ones, this feast cannot be missed. So Amazon AWS announced that it will cut the price of S3 standard storage services in most AWS regions from December 1st, ranging from 16% to 28%. In addition, Glacier storage prices are also decreasing. Among them, the China (Beijing) region as the focus of price cuts, the highest drop of 10%. On November 17, Qingyun announced the launch of the seventh tariff reduction plan, which lowered the tariffs on the mainframe, ultra-high performance disc and PaaS service by 23.5%. It also opened a new billing mode and implemented the reserved instance + on-demand billing model. Users can choose the solution that suits them best and get the optimal cost-benefit structure; store ladder pricing, ultra-high-performance disk and capacity disk to execute the ladder pricing, the higher the usage, the lower the price.
Second, the three logic behind the cloud computing giant's crazy price cuts
　 A year later, it is normal for cloud computing giants to conduct similar price wars. It seems that they can't stop. Behind its fieryness, the giants have already seen through it: in the current market, price is the best catalyst for the market. It can be said that the giants are in the stage of "not afraid of price wars and more fear of no price wars". There are three simple logics behind them.
1. Price reduction and even free is the fastest way to popularize
Monopoly is the best business model in the world, and free/price reduction is the best way to popularize the world. A free lunch is always attractive to people, and so is the user service for cloud services. When enterprises choose to deploy cloud computing, “stable, secure, and reliable†is naturally a short-listed condition, but for most enterprises (especially small and medium-sized enterprises, Internet entrepreneurs, and even individual developers), when they choose to deploy, the price is Taking the most weight is the primary consideration.
From the perspective of market reality, we can also clearly see the powerful boosting effect of price reduction strategy on cloud computing market demand. An obvious example is: Alibaba Cloud data shows that Alibaba Cloud's sales revenue reached 190 million yuan on the day of this year's double eleven, which is equivalent to a 24-hour short-selling of a large-scale data center, saving more than 11 for tens of thousands of companies. 100 million yuan in IT costs. Within a day, Wang Jianlin’s #两å°ç›®æ ‡# was almost reached.
2. Scale effect and efficiency improvement
The cloud computing giants have seen the price cuts, but the final result is not the two losses, but further reduced the user's use cost, jointly cultivated the user's usage habits, increased the existing market size, and jointly The cake in the market is bigger and stronger.
On the other hand, the price war of cloud computing giants is actually an effective measure to promote technology to productivity, which can stimulate cost, efficiency and ability to maximize efficiency. In reality, as the market demand for cloud computing continues to expand, for cloud computing vendors, the cost of spending on cloud computing (such as the construction of large-scale data centers) will also multiply, to curb the increase, this Depends on the operational efficiency of large-scale data centers.
In the cloud price reduction trend, followed by the dilution of revenue and profit, then to curb this growth, what is needed is an effective improvement of resource efficiency.
3. Matthew effect
The Matthew effect is widely used in the commercial market. For the cloud computing market, under the general trend of giants' price reduction, the Matthew effect of the cloud computing market will become more prominent, and the integration of the cloud computing market will be further accelerated. One or several industry giants will stand out as giants. It is an inevitable trend and the market shuffling is about to begin.
In the cloud price reduction of the big giants, it can be said that you sing and I am on stage, one is more exciting than the other. However, in essence, it is forced by competition. From the point of view of time, we can clearly see that cloud computing giants are entering a price catching game. As mentioned above, after Alibaba Cloud announced the price cut on October 14th, Baidu Cloud, Tencent Cloud, Microsoft Azure, Amazon AWS, Qingyun, etc., responded in a substantial manner in the next month. The price reduction follow-up measures.
However, in this price-cutting game, the most injured are small-volume players, who suffer from a direct reduction in revenue on the one hand, and on the other hand, under the pressure of competitors with strong capital and technical support. In the end, it will become the market's knockout. There are precedents in the US market. After several rounds of price cuts by giants, dozens of cloud service providers in the United States have become the leading companies such as Amazon, Microsoft, and Google. In the Chinese market, similar integration and shocks are taking place. For example, in May of last year, Alibaba Cloud announced the price of “Speed ​​CDNâ€, which was 21.2%. The impact of Ali’s price cut was that CDN’s main stock, Blue Dragon, fell 8.47%, and the lowest fell 15.14. %, closing at $13.72, and the market value evaporated by about $32.75 million. NetScience has not seen the market impact due to suspension of trading.
Written at the end:
All of the above, let us see the logic behind the tragic price war in the cloud computing market. However, from the development trend of cloud computing, the current giants' price shopping in the cloud computing market, personally think that it is only the expedient of the giants to use capital to cultivate and integrate the market and make big cakes. When the cloud computing market is bigger and stronger, after the market integration is completed, the cloud computing market will continue to enter the period of giant domination. At that time, it is the value harvesting period of cloud computing. A similar plot, in fact, has been staged in the previous field of takeaways, shared bicycles and so on.
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