On March 26, Kingsoft released its full year and fourth quarter earnings for 2018. Its revenue was 5.906 billion yuan, including Kingsoft Cloud's revenue of 2.218 billion yuan, a year-on-year increase of 66%. In the fourth quarter, Kingsoft Cloud's revenue reached 727 million yuan, a strong growth of 81% year-on-year, and far higher than the average growth rate of 42% in the Chinese market. Thus, its share of Kingsoft's revenue has continued to increase to 41%.
Strong growth means not just as simple as enclosure movement
The growth rate of Kingsoft Cloud's revenue year-on-year in the four quarters of 2018 was 56.3%, 54.2%, 68.4%, and 81.0%. The comparison shows that in the second half of the year, especially in the fourth quarter, its revenue is accelerating.
And also, media reports intuitively tell us that Kingsoft Cloud has continuously expanded its business scope at home and abroad in the past year. A few years ago, its business focused on the Internet, such as video, games, etc., and now it is fully deployed in enterprise-level markets such as government, finance, manufacturing, medical, and media. Its strong growth of revenue is not just as simple as the enclosure movement.
So it seems that Kingsoft Cloud has found the key to survival in the second half of cloud computing competition.
AI+ enterprise market, the secondary engine pushes forward at full speed
Different from traditional IT equipment service providers, it can be said that Kingsoft Cloud is a "new force" in the enterprise market. To sum it up, it has three main elements:
Kingsoft Cloud has inherited the 30-year enterprise-level service experience of Kingsoft Group. The government and enterprise market requires cloud vendors not only to provide standardized cloud products and solutions, but also to have a clear understanding of the industry's pain points and specific needs in the vertical industry. Furthermore, make “flexible adjustments” to create tailored solutions. Relying on Kingsoft Group's 30 years of enterprise-level service experience, it has natural genes and a strong reserve of basic resources.
Internet-innovated genes. The new round of digital transformation requires companies to continuously innovate in their cloudification process. This process is not a simple technology graft, but based on the integration of its own business and secondary innovation. Kingsoft Cloud rises from the Internet, but does not follow the old path. Instead, it forms a fusion structure in the fields of big data, blockchain, edge computing, artificial intelligence cloud, IoT, etc., promoting each other and having virtuous circles. For example, in November 2018, Kingsoft Cloud and MIoT, the world's largest commercial Internet of Things platform, joined forces to accelerate the advent of the AIOT era.
AI-driven industry fission. The biggest challenge for industrial enterprises in the process of informationization, digitization and intelligent upgrade, is how to adapt the new technology to the scene. In this regard, Kingsoft Cloud has joined hands with many industry partners such as Ansteel Group, Shaanxi Radio and Television, e-Hualu, TIRAIN Technology to explore how enterprises can transform intelligently. For example, Kingsoft Cloud and Ansteel Group have built an industrial Internet cloud platform – “Jinggang Cloud”. It helps Ansteel Group to fully apply cloud, big data, artificial intelligence and other technologies to various operational process nodes, such as quality tracking, energy saving and emission reduction, and smart logistics. This not only makes management and operations efficient, but also reduces costs.
This unique new force has brought new growth to industry cloud, which in turn has brought acceleration effect of the “secondary engine” for Kingsoft Cloud to expand its industry cloud market.
The cloud market pattern is far from established
Canalys' research report shows that the global cloud computing market reached a total size of 80.4 billion US dollars in 2018. According to the "2018 Cloud Computing White Paper" released by the China Academy of Information and Communications Technology, China's public cloud market is expected to be 90.3 billion yuan in 2021. In today's cloud computing market, major manufacturers are flocking and fiercely confronting. However, the current cloud market is only tens of billions of yuan, but the IT infrastructure market is as high as trillions of yuan. It seems that the cloud market pattern is far from established.
However, it can be confirmed that the cloud service + enterprise market has become the trend of the times. In the fields of financial technology, smart manufacturing, smart city, and smart medical care, there is a huge market space. Driven by the "AI+Enterprise" secondary engine, Kingsoft Cloud, which has found the key to survival, is likely to run faster and return to triple-digit growth.