The battle for cloud services in 2024 ignites in the economic sector, fueled by AI's rise

08/19 2024 449

Author: Intelligent Relativity

Today, a Chinese enterprise may face the situation of leveraging digital technology to improve operational efficiency while adopting AI to optimize products and services. Ultimately, these advantages can be brought to the international market through an overseas expansion strategy, ultimately completing the upgrading and creation of a global brand.

The waves of digitization, AI, and overseas expansion—the three major trends confronting contemporary enterprises—intertwine, jointly driving global economic and technological development. Behind these waves lies a driving force inseparable from a broader trend: the support and transformation of cloud services.

At this stage, cloud services have become a basic requirement for enterprises. Relying on their advantages such as cost optimization, flexibility, scalability, high availability, disaster recovery and backup, and technological innovation, they are an integral part of contemporary enterprise development.

For contemporary enterprises, adopting cloud services is no longer a concern but a necessity. However, selecting the appropriate cloud server continues to perplex most enterprises, as the considerations extend beyond technical issues to encompass a comprehensive range of economic factors.

It is evident that the battle for cloud services has intensified in the face of continually growing enterprise demand, spreading from the technological realm into the economic sphere.

The battle for cloud services spreads from technology to economics

An intriguing phenomenon this year has been cloud vendors engaging in competition through live streaming.

Luo Yonghao made a forceful entry, promoting cloud services for the first time during Taobao Live's "Make Friends with Four Years Anniversary Special." With Luo's characteristic witty remarks, over 2.3 million viewers tuned in, igniting the popularity of cloud servers through live streaming e-commerce.

Subsequently, JD Cloud and Tencent Cloud followed suit, entering live streaming to compete on product pricing and brand benefits, initiating the process of selling cloud services via live streams.

For a time, in the commercial realm dominated by live streaming sales, cloud vendors, known for their technical expertise, found themselves engaged in intense competition driven by commercial behavior. This renewed industry awareness that competition in the cloud service market transcends technical aspects, encompassing economic considerations as well.

In fact, during the early stages, cloud computing was an emerging technology poorly understood by many enterprises. Therefore, when deciding whether to adopt cloud servers, enterprises primarily focused on technical issues. These included technical feasibility, security, stability and reliability, and the difficulty of technology migration.

As cloud server technology matured, and with more enterprises gaining practical experience with cloud services, economic considerations became part of later decision-making. These included the usability and flexibility of cloud tools and applications, brand reputation, long-term cost-effectiveness, and resource utilization rates.

It is understandable why cloud vendors began selling cloud services via live streams this year, primarily due to enterprises' deepening understanding of cloud services and a more pragmatic focus on economic benefits.

Selecting cloud servers involves finding the optimal comprehensive solution

When considering economic factors, enterprises must weigh various aspects such as technology, pricing, cost, service, brand, short-term investment, long-term development, and benefits to select the optimal cloud server. Specifically, enterprises focus on the following three levels:

1. The optimal balance between price and performance.

This boils down to cost-effectiveness. The higher the performance-to-price ratio, the more appealing the cloud server is to enterprise customers. The key lies in practical verification of performance.

Taking Volcano Engine as an example, its cloud services share server resources with Douyin's millions of servers. This long-term experience with handling massive concurrency ensures stability and responsiveness, supporting a large user base and complex business scenarios. Additionally, its unique technologies like DPU and mGPU achieve zero computing power loss, improving resource utilization and overall performance.

By adopting a tidal resource reuse strategy, Volcano Engine further enhances resource utilization, achieving economies of scale and offering services at a lower cost, providing enterprise customers with a higher cost-effectiveness. Currently, Volcano Engine is offering promotional discounts, which can reduce overall cloud service costs by up to 30% compared to leading cloud vendors.

2. The optimal balance between short-term investment and long-term development.

As the value of cloud adoption is increasingly validated, enterprises consider both short-term investments (initial costs, migration costs, training costs) and long-term development aspects (scalability, security, compliance, technical support, brand reputation).

These are critical capabilities that enterprises must consider and cloud vendors cannot overlook. For example, migration costs are often crucial in convincing enterprises to choose third-party cloud servers. Volcano Engine provides migration tools to address this concern, enabling enterprises to smoothly transition to the cloud with their essential assets.

Moreover, Volcano Engine's cloud-native architecture and distributed cloud-native platform support multi-cloud interconnection and collaboration, addressing enterprise customers' needs for resource and service interconnectivity across different cloud vendors. It also offers 24/7 business support and professional technical assistance, reducing short-term investment costs for enterprise customers.

For long-term development, Volcano Engine provides full-stack security solutions from hardware to software and end-to-end data lifecycle management, ensuring enterprises meet high standards for security and compliance when using cloud services. Its cloud servers will continue to invest in R&D and iteration, offering more product tools, applications, features, and software environments, enabling users to quickly benefit from ByteDance's technological advantages.

In summary, for long-term development, enterprises require secure and compliant solutions that rapidly leverage technological advantages to address business challenges, leading to significant efficiency gains. This comprehensive consideration of technical and commercial dimensions reflects the primary competitive trend in the current cloud service industry.

3. The optimal balance between continuous evolution and application implementation.

As the underlying technology for contemporary enterprise transformation and upgrading, cloud services must continually evolve and have robust application implementation capabilities to drive significant innovative growth. Cloud services must repeatedly stimulate enterprise innovation with new technologies, a crucial capability for business innovation and development.

Currently, the Doubao Large Model is widely used in industries like internet, education, healthcare, finance, consumer goods, and research, offering business innovation opportunities to enterprises. Meanwhile, ByteDance has also introduced Doubao, an AI assistant named after the large model, for C-end users, offering a novel large model application experience.

Since its launch, Doubao's downloads on the App Store have rapidly increased, surpassing 100 million and consistently ranking high. Additionally, daily token calls for the Doubao Large Model exceed 500 billion, with daily token usage by external enterprise users increasing 22-fold since its May launch.

It is evident that both C-end users and B-end clients value high-quality technological innovation, whether in applications or solutions, emphasizing rapid implementation of technological advancements.

Conclusion

Today, enterprise development is inseparable from cloud services' support. Both startups and large enterprises rely on cloud services to varying degrees to drive business growth. Cloud services not only offer significant economic benefits but also help enterprises maintain a competitive edge in the market—by adopting cloud services, enterprises can focus more on their core business and development strategies, unburdened by IT infrastructure management and maintenance.

Within ByteDance, over 50 business departments utilize the Doubao Large Model, spanning collaboration, data analysis, copywriting, assisted programming, content moderation, customer service, game NPCs, character dialogue, education, and more. These capabilities, supported by cloud services, will soon "spill over" to be applied in more industries and enterprises, rapidly fostering innovation in enterprise core businesses.

Such innovative applications signify that contemporary enterprises' choice of cloud service providers goes beyond technical considerations, encompassing comprehensive factors like application involvement, R&D, and implementation.

Everything begins in the cloud. At this stage, enterprises can seize opportunities in digital transformation, AI empowerment, and overseas growth, further expanding their advantages with cloud services. Selecting a high-quality cloud service provider and cloud server product is thus a compulsory course for contemporary enterprises.

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