Most popular Amazon AWS makes efforts in the Chine

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Is Amazon AWS driving the Chinese market through cloud computing

Amazon AWS will have a new image in China, which is the leader of cloud computing. On August 25th, 2017, at the artificial intelligence forum sponsored by Taihe think tank, Fei Lianghong, chief cloud computing technology consultant of Amazon AWS, as an invited guest, began his first speech in China this year. He didn't expect that as soon as he spoke, the audience applauded

Amazon's cloud computing service platform AWS (Amazon Web Service) is the first company in the world to provide public cloud services. It entered the Chinese market in 2013 and officially provided commercial services in 2015. In June 2017, AWS ranked first in the cloud computing rankings published by Gartner, an internationally renowned research organization

Amazon, whose market value has increased more than 700 times since 1997, has been creating a wealth myth in the capital market. In September 2016, the market value of the company soared to $382billion, making it the fourth largest technology giant in the world after apple, Google alphabet and Microsoft. At the same time, it is also a rare company in the capital market that maintains a market value of more than $400billion without high revenue. Investors value Amazon's growth space more than its profitability

among the four major American Internet companies known as Fang, only Amazon has officially launched business in China. This has drawn much attention to Amazon's business development in China

compared with its success in the international market, Amazon is not successful in China. According to the 2016 China e-commerce market data monitoring report, in 2016, among China's B2C online retail platforms (including open platform and self-supporting sales, excluding brand e-commerce), Amazon China's market share was 1.3%

Cao Lei, director of China e-commerce research center, believes that today's cloud computing business allows investors to see Amazon's broader profit space. Alibaba is similar to Amazon in China. According to two reports from Morgan Stanley in the United States and Gartner, an internationally renowned research organization, Alibaba cloud ranked first in the Chinese market with a 50% share at the end of 2016. In June 2017, Alibaba cloud ranked among the top 4 global cloud computing manufacturers

over the past 20 years, Fei Lianghong has done technical research at Apple and Microsoft. Now he has been engaged in cloud computing industry in China for many years, which makes Fei Lianghong feel that China is a very unique market. In the process of becoming a leader in cloud computing, Amazon needs to work hard to adapt to China

low market share of e-commerce

for the reason why Amazon's market share in China has been low, Cao Lei believes that as an e-commerce directly operated by foreign capital, Amazon's corporate culture has always been acclimatized in China. It is very important to have a deep understanding of the local unique Chinese laws, fully understand the local corresponding laws and regulations, and communicate well with the regulatory authorities. In recent years, e-commerce providers such as eBay and ASOs have withdrawn from the Chinese market, and Amazon's survival has been a victory

in addition, Amazon's decision-making is very rigorous. Even if it modifies the logo of a brand, it needs to consult the headquarters. The E-commerce Internet industry is changing rapidly. To deal with any price war, public relations war and marketing war, enterprises are required to fully authorize the region and make flexible and rapid decisions

Amazon's e-commerce business has two strongest competitors in China. According to the China online retail B2C market share released by Analysys International, tmall and accounted for 87.4% of the market share in the fourth quarter of 2016, and Amazon ranked eighth in China

in China, the 618 promotional Festival, which evolved from the Jingdong store celebration day, and the "double 11" Shopping Festival, which originated from Taobao Mall, two short national Carnival days have brought more than 100 billion in sales to the two companies. Prime day, which first landed in China in recent years, made its debut in China in July this year, with sales of $1billion

Cao Lei believes that from the perspective of platform e-commerce, only the top 10 market share makes Amazon's departure and retention have a limited impact on China's local e-commerce. For the cross-border import e-commerce segment, there is no oligarchy yet, and Amazon still has the opportunity

profit support

Amazon is definitely not the first enterprise in the world to sell books on the Internet, nor the best e-commerce, but today it is considered to have the most room for growth. The key factor is scientific and technological power. If you choose an electronic universal experimental machine with more than 10 tons, it is no exaggeration to say that it is artificial intelligence. Fei Lianghong said at the artificial intelligence forum of Taihe think tank

the development of Amazon artificial intelligence can be traced back to 1995. Amazon's first page with user recommendation system and personalized services can be regarded as the embryonic form of Artificial Intelligence Computing. In 2006, Amazon established AWS as a business department specialized in providing cloud computing services, taking cloud computing as an infrastructure and general technology service, which has been the basis for Amazon's own e-commerce operation. Later, from the inside to the outside, in terms of business model, the standardized services provided by AWS can be used by any enterprise user, including Amazon. Any customer can enjoy the service by paying the bill

AWS has become an important support for Amazon's profits for several consecutive quarters. The financial report for the second quarter of 2017 showed that Amazon's net revenue was about $38billion, a year-on-year increase of 24.8%, and the net revenue of AWS department was $4.100 billion, an increase of 42% over $2.886 billion in the same period last year

investment in technology has not slowed down. The financial report shows that R & D expenses increased by $1.67 billion in the same period in the second quarter, which is equivalent to 70% of Amazon's full year net profit last year

in public services, the list of customers of Amazon cloud computing now includes net flix, the Washington Post and capital one (Capital One Financial Corp)

the gathering of customers has formed an organic ecosystem. Any individual developer and enterprises of different sizes can quickly enter this field with such a mature and large-scale service, and use these existing mature products to help us achieve a leap in artificial intelligence, so as to obtain new opportunities in the face of new opportunities. This is the economies of scale brought by the superposition of cloud computing and artificial intelligence, Fei Lianghong said

internally, unmanned retail stores and fresh food have become two typical cases of Amazon's AI landing. In December 2016, Amazon go, the world's first unmanned retail store, appeared. This demonstration site is located on Seattle's Seventh Avenue. He said he went to experience it several times. A shop with more than 500 square meters does not need a cashier, service personnel, or special means of payment. He only needs an app and Amazon e-commerce account. Fei Liang ----- professor wudaming/Institute Changhong of the Institute of plastic machinery and plastic engineering of Beijing University of chemical technology has been engaged in the field of it and software development for 20 years, but he is still surprised that for this kind of service and experience, artificial intelligence can not only be used in papers, competitions, but also change life

another example is Amazon fresh food service. Fei Lianghong often sees refrigerated trucks with Amazon logo in the streets and alleys of the United States. For the short maintenance cycle of fruit commodities, Amazon engineers developed different algorithms for all kinds of fruits to solve the problems of decay, damage and preservation

unique market

aws faces strong competitors in China. On June 16, 2017, Gartner, an internationally renowned research organization, announced the IAAs magic quadrant of global cloud computing in 2017. AWS still ranks first, but Alibaba cloud, a Chinese cloud computing manufacturer, entered the fourth core field for the first time, with a gap between AWS and Microsoft and Google. At the end of 2016, Wardle believed that Morgan Stanley, a well-known Chinese investment bank, released a report showing that Alibaba cloud accounted for about 50% of the market share in China. This market share is the sum of AWS, azure, Tencent cloud, baidu cloud, Huawei cloud and other service providers

Alibaba cloud and AWS have similar development tracks. Established in 2009, it has developed from meeting internal e-commerce needs to external business output. At present, it is an independent business department of Alibaba, providing basic cloud computing and industry applications. Judging from the financial reports in recent years, Alibaba cloud is also known as the third stage rocket of Alibaba group. For four consecutive quarters in 2016, Alibaba cloud's growth rate increased from 106% to 175%

the difference is that Alibaba cloud is a service provider native to China. Alibaba cloud is the leader in the market share of IAAs in China, especially in the market related to enterprises and government agencies that are undergoing cloud transformation. Gartner analysts wrote in the report

Tian Feng, director of Alibaba cloud Research Center, told the economic observer that Alibaba cloud is a nationally autonomous and controllable cloud computing platform that can provide better support for key national industries

Fei Lianghong, who has studied cloud computing in China for many years, also increasingly feels that China is a very unique market with unique designs in compliance, supervision, law and finance. First of all, these requirements must be met in order to obtain qualifications and licensing capabilities in China. He said that Amazon is working hard to cooperate at present. When talking about the e-commerce China law, Cao Lei also said that it is very important for foreign investors to do as the Romans do, and they should fully understand the corresponding local laws and regulations and communicate well with the regulatory authorities. Google is a good example

for the current market, Fei Lianghong believes that the volume of cloud computing in China is much smaller than that in the United States, but it is still very huge. All companies that provide cloud computing services may be called competitors, such as Alibaba, Tencent, Microsoft, and even traditional technology companies that use cloud computing for transformation and upgrading. If these companies do not transform and adopt the original mode of equipment independent maintenance and development, they will adopt a different mode that is opposite to the public cloud. I'm afraid that no new entrant can quickly change the market pattern. Tian Feng believes that China's cloud computing market has been in a period of benign growth, and has reached the optimal cost in terms of social costs. It is mainly reflected in the stable development of the infrastructure service market, and enterprises gradually have a consensus to migrate cloud computing. At present, enterprise customers are in the process of going to the cloud. Generally speaking, the migration process of enterprise cloud computing is mainly divided into three steps: going to the cloud, generating big data resources, and using AI to develop data business value

according to Tian Feng, this market is characterized by scale effect. The larger the number of users, the more price can be reduced, and the technology dividends can be transferred to customers, forming a virtuous circle. The only innovation opportunity is at the industry application level. For example, in the education cloud and industrial cloud, entrepreneurs continue to enter

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