Internet giant BAT ranks the top three public clouds in China. Does this mean that the public cloud market tends to be concentrated?
According to Leifeng. com, Baidu released its unaudited financial report for the fourth quarter of fiscal year 2018 on February 22. Baidu's revenue in this quarter was 27.2 billion yuan, up 22% from the same period last year, and its net profit was 2.1 billion yuan. It is noteworthy that Baidu Yun released its performance data for the first time in the earnings teleconference after the announcement of the earnings report.
Baidu Cloud's Quarterly Revenue Breaks Billion
Baidu announced that Baidu's cloud business had achieved revenue of 1.1 billion yuan in the fourth quarter of 2018, more than twice the revenue in the fourth quarter of 2017. More data are not disclosed. According to Lei Feng's observation, BAT's three Internet giants may be the only three companies in the domestic public cloud market that have over 1 billion revenue in a single quarter. Aliyun's revenue in the last financial quarter (October-December) was 6.611 billion yuan ($962 million). Tencent's revenue in the first three quarters of 2018 exceeded 6 billion yuan, so we can confirm that its revenue in a single quarter is also high. More than one billion yuan.
Cloud business still belongs to other businesses in Baidu's earnings report. Other revenue of Baidu Q4 is 6 billion yuan ($872 million), an increase of 104%. Officials say that the main business is the strong growth of IQI member services, cloud computing and other businesses.
Expanding the time span to the whole fiscal year of 2018, Baidu's other revenue reached RMB 20.4 billion yuan ($2.96 billion), an increase of 86% year on year, with the same growth impetus.
At the same time, Baidu's bandwidth cost also increased 27% year-on-year to RMB 1.8 billion ($258 million), mainly due to the growth of information flow, video and cloud demand.
Public cloud vendors embrace AI
Just in the past Lunar New Year, Baidu Yun steadily undertook 20.8 billion red envelope interactions with CCTV in the Spring Festival Gala of 2019. Baidu Cloud has also launched OpenEdge, an open source computing platform, to help developers build lightweight, secure and scalable edge applications, and to apply AI to smart home devices, wearable devices and other Internet of Things devices.
Market growth slowed down
According to IDC's semi-annual tracking report on China's public cloud service market released at the end of 2018, the overall market size of China's public cloud service (IaaS/PaaS/SaaS) exceeded US$3 billion in the first half of 2018, with IaaS market growth reaching a new high of 83% year-on-year.
With the continuous evolution of enterprise applications to cloud-based development architecture in the future, the development of innovation accelerators, including AI, machine learning and IoT technology, has greatly increased the amount of data, promoted the demand of enterprise for intelligent analysis and real-time information transmission, and posed new challenges to the reliability, stability and security of public cloud IaaS infrastructure.
At the same time, Leifeng observed that the growth rate of the public cloud market is slowing down. Take Aliyun as an example, its revenue in the last fiscal quarter (October-December 2018) grew 84% year-on-year, compared with 90% and 93% in the previous two quarters, respectively, and then slowed down. As we can see, the three-digit growth of the public cloud market is difficult to reproduce.
Baidu cloud has come ashore, and the next competition for public cloud will be the overall competition for capital, AI and hard technology strength.