[ China Intelligent Manufacturing Network Market Analysis ] Looking back at the 2016 cloud computing market, we can find that in addition to the continued success of the various races, the price war can be described as the main theme of the industry. It must be said that in the market competition, price is still the most effective means of competition, no one.
Cloud computing has passed the "singularity" or will enter the accelerated price reduction stage
Take Amazon AWS as an example. Since its release in 2006, Amazon AWS has announced more than 50 price cuts. The latest price cut is at the beginning of the month: Amazon AWS announced that it will adjust the price of some of its storage products from December 1 There are S3 standard storage and Glacier low cost archive storage. The price of the S3 standard storage dropped by 28.13%, however, the price is only for storage users above 500TB, and only in the eastern United States (north of Virginia), the eastern United States (Ohio), the western United States (Oregon) and the European Union (Ireland) data. The center is available.
Compared with Amazon AWS, Alibaba Cloud, which has sprung up in recent years, is also accelerating the price reduction process. On December 15th, at the Guangdong branch of Yunqi Conference, Alibaba Cloud announced a new round of price reduction strategy: the new user's cloud service discount in South China is 30% off, and the cloud database of all major regions in China is adjusted by 20%. The cloud server exclusive instance has a maximum drop of 30%. In addition, Alibaba Cloud also launched a “free package†program at the conference. New users who received the invitation code can use more than 30 cloud products for free for half a year. This is the 18th price cut by Alibaba Cloud in the past year.
Even so, whether it is Amazon AWS or Alibaba Cloud, its latest quarterly revenue has achieved rapid growth. Why do cloud services cut prices not only will not lose money but also accelerate growth? Let us explore together.
First, cloud services are typical economies of scale.
When it comes to economies of scale, many people think of e-commerce, software development, and even three squirrels. E-commerce and software have very similar profit models: the cost of building a platform or software development is very high, but the more people use it, the cost of one-time investment will be continuously diluted, and its profitability will instead Will continue to increase.
The three squirrels selling snacks are another road to economies of scale: the volume! Many people who do dried fruit know that those who sell dried fruits online are actually meager profits. They often earn a few cents for a bag of snacks. However, once the scale effect is formed, small profits but quick turnover, its revenue will be very objective.
In contrast, cloud computing almost doubles these two modes. In the early days of cloud computing, the cost of data center construction and software development is relatively high, but the cost will be diluted after the increase in the number of users; while cloud service providers will continue to cut prices to attract more users, even if only meager profits can be taken away. A lot of money is earned.
Second, cloud services also follow Moore's Law
As we all know, in the technology industry, Moore's Law is almost like Newton's law in mechanics. The so-called Moore's Law is that when the price is constant, the number of components that can be accommodated on an integrated circuit will double every 18-24 months, and the performance will double. In other words, the performance of computers that can be bought for every dollar will more than double every 18-24 months.
Cloud services also follow this rule, because the most basic services of cloud computing are still computing resources, storage resources and network resources. In fact, all three follow a certain Moore's Law. If you don't understand, many scenes in life can tell you, for example, the computer performance is getting stronger and stronger, but the price basically changes little; the hard disk capacity is getting bigger and bigger, the price is also unchanged; at the network level, mobile phone traffic The fee will be lowered at regular intervals.
Cloud services that combine resources such as computing, storage, and networking naturally follow this pattern. Therefore, those cloud service providers will not lose even if they cut prices: because their infrastructure construction also follows Moore's Law.
Third, cloud computing has become the foundation of emerging technologies
In 2016, virtual reality, artificial intelligence, etc. have become hot new technologies in the technology industry. Not only that, live video, driverless, digital transformation of enterprises... almost all technological innovations are based on cloud computing support. Cloud computing is becoming the foundation of water and electricity in the technology industry.
In this case, on the one hand, cloud computing applications will become more popular. On the other hand, the technology dividend of cloud computing will also lead to more technological innovations, which will feed back cloud computing and promote the development and progress of cloud computing. . In this case, cloud computing will naturally enter the price reduction cycle.
Taking artificial intelligence as an example, the application of artificial intelligence has now made the operation and maintenance services of cloud computing more and more automated, which means that there will be more and more unattended computer rooms, software upgrades, data migration and even Vulnerability monitoring, troubleshooting, etc. can be done by artificial intelligence. One person may be able to manage several large data centers remotely. This will greatly reduce the cost of cloud computing.
It is precisely because of the above reasons that cloud computing is more popular and the price is lower. There is also an interesting phenomenon here, that is, the cloud computing giant is big and big. Those enterprises with excellent cloud services will grow faster, so the frequency and extent of price cuts will be greater, and price cuts will attract more users to increase the scale effect of cloud services.
For the cloud computing giant, the price reduction has not only conformed to the development trend of industry and technology, but also conformed to the needs of market competition and user application. What is the best of both worlds?
In my opinion, in 2016, cloud computing has already passed the “singularity†and entered the rapid popularization stage. Users began to adopt cloud computing services in large quantities, and the growth of those cloud computing giants also proved this from the side. It is foreseeable that in the coming 2017, the popularity of cloud computing will continue to accelerate, and prices will be rapidly lowered at any time. This is not the result of market competition, but rather the inevitable result of technological innovation and development.
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