A meaningless sales show.

Author|Wen Changlong

Editor|Yang Zhou

Unlike the "low price temptation" and full of tricks of e-commerce platforms' Double 11, the cloud market's Double 11 is more like a buyer's market, where customers firmly hold the initiative, and vendors have to bow their heads to compete for every potential customer.

The essence of e-commerce platforms' "Double 11" is initially a large-scale user acquisition campaign targeting all netizens. In 2014, the penetration rate of e-commerce was just over 50%, but last year, it reached 85%, meaning there are no new users to attract, making it more of a burden. So, what about the cloud computing market's Double 11?

Similar to the e-commerce market, regular price reductions in the cloud market have long become the "norm among norms," with Alibaba Cloud undoubtedly being the most representative, almost becoming the "price butcher" of the Chinese cloud market. This year's cloud market price war was also initiated by Alibaba Cloud, with other vendors following suit.

Regarding the popularity of cloud adoption, according to the Cloud Computing Development Survey Report of the China Academy of Information and Communications Technology, in 2019, 66.1% of enterprises in China have applied cloud computing, an increase of 7.5% from 2018. It is believed that the application rate of cloud computing among enterprises will be even higher in recent years.

Will cloud vendors' Double 11 gradually lose its appeal and even become a burden? A senior industry insider pointed out that such promotional activities are actually lowering the industry's reputation and are, at best, a farce. The promotion of Double 11's contribution to overall business growth has also shrunk. It is more like a "marketing convention" rather than a genuine means of driving business growth.

01 Cloud vendors' Double 11: small customers and new user acquisition

During Double 11, major cloud vendors such as Alibaba Cloud, Tencent Cloud, and Huawei Cloud have launched various discount activities. However, given that price reductions in the cloud computing market have become the norm, it is worth a deeper examination whether such promotional activities can truly drive substantial growth.

Judging from the Double 11 promotional content of major vendors, attracting new users is clearly the primary goal. Almost all cloud vendor activity pages feature the words "exclusive for new users" or "new user exclusive," with each offering attractive discounts for new users.

This strategy is not difficult to understand. Unlike fast-moving consumer goods, the use of cloud services has a strong continuity. By attracting new users with low prices for trials, some users may choose to stay even if they are not completely satisfied after the trial period due to the cost of migrating to other vendors.

These promotional products are mostly lightweight cloud servers and cloud hosts, with prices generally low, ranging from tens of yuan to thousands of yuan. Some cloud vendors have even paired these products with specific usage scenarios, such as "startup website building" or "personal development and testing."

In addition, cloud vendors have incorporated social elements into their promotional activities. Taking Tencent Cloud as an example, this year's "Double 11 Group Buying" feature is a typical example.

Judging from these actions, the customer group for this Double 11 is mainly locked in between small and medium-sized enterprises and developers, focusing on promoting entry-level and low-cost cloud services rather than upgrades or expansions of large-scale enterprise-level applications.

Developers and small and medium-sized enterprises have also responded positively to these promotional activities. A developer revealed to "Market Trends" that "vendors like Alibaba Cloud and Tencent Cloud have practically bombarded me with phone calls. My plan is to wait until 11.11 to make my purchase, as the discounts during this period often exceed regular promotions."

According to "Market Trends," many small and medium-sized enterprises have adopted a similar strategy: they patiently wait for cloud vendors' Double 11 promotions and then negotiate with account managers to secure the maximum discount.

Small and medium-sized enterprises and developers are highly sensitive to prices, and low-cost promotions can quickly attract them to try cloud services. However, the customer loyalty and long-term benefits brought by such promotions are uncertain.

After enjoying the discounted period, many small and medium-sized enterprises often choose to terminate the service or switch suppliers due to budget constraints or changes in business needs, even if there are migration costs to consider. This makes it difficult for cloud vendors to convert these short-term customers into long-term users, and the short-term growth brought by promotions is difficult to convert into sustained business value.

More crucially, these heavily discounted products actually contribute limitedly to cloud vendors' core revenue.

For cloud vendors, large customers are the core pillars of revenue and profit.

Cloud computing procurement decisions for medium and large enterprises are usually closely related to the company's long-term strategy. Although discounts during Double 11 can attract some customers to try the service in the short term, service stability, data security, and technical support are their core concerns.

A corporate purchaser bluntly told "Market Trends," "Cloud servers are not like rice that you can stock up on when on sale. I always receive marketing calls saying there are discounts on servers during Double 11. This is more like selling daily necessities than cloud computing."

A senior industry insider pointed out that such promotional activities are actually lowering the industry's reputation and are, at best, a farce, far from being a serious sales event targeting real customers.

After all, unlike e-commerce promotions, if cloud vendors rely solely on promotional activities at a specific time like Double 11 to drive growth, they may overlook how to build long-term growth strategies through refined customer service, product innovation, and other means during ordinary times.

In this light, the contribution of Double 11 promotions to overall business growth has shrunk. It is more like a "marketing convention" rather than a genuine means of driving business growth.

Participants in Double 11 promotions include not only cloud vendors and cloud customers but also a special group - agents.

Agent distribution is a core means for major cloud computing vendors to expand their market. Taking Alibaba Cloud as an example, the grading criteria for agents include sales, the number of new cloud customers acquired, technical certification personnel, and other standards. Other cloud vendors have similar practices regarding agent grading and benefit settings.

Agents earn commissions by helping cloud vendors promote users and orders. Typically, the higher the agent level, the higher the commission rate, but the corresponding annual performance threshold is also higher.

Agents' core weapon for selling cloud services is discounts. Generally, cloud vendors offer exclusive discounts to cloud agent channels. Discounts refer to preferential policies set by cloud vendors to incentivize agents, usually only available to customers through agent channels.

In the past, during Double 11, cloud agents often promised customers discounts of up to 30% off when purchasing cloud services through their channels, which, when combined with Double 11 discounts, could often attract many customers due to such price advantages.

However, during this year's Double 11, the situation for cloud agents was not easy.

An entrepreneur who renewed their services during this year's Double 11 revealed to "Market Trends," "Our company has spent three to four hundred thousand yuan annually for the past two years, enjoying a 25% discount through agents. But when renewing this year, Alibaba Cloud's official sales suddenly contacted me, offering an even lower discount of 49% off."

This phenomenon is not an isolated case. According to Leiphone, during this year's 618 shopping festival, Alibaba Cloud's telemarketing department also launched a half-month promotion, directly prompting some customers to abandon agents and cooperate directly with Alibaba Cloud instead.

This phenomenon has undoubtedly continued into this year's Double 11 promotion, further compressing agents' survival space.

Xiao Xi'ao is a cloud agent primarily representing Alibaba Cloud and other cloud vendors. His company is relatively small, with only five or six employees. He told "Market Trends" that to cope with this situation, "Some agents compete fiercely, offering the highest rebates to attract customers. They are even willing to forgo profits during the initial transaction, gambling that once customers migrate, they will find it difficult to switch easily. In other words, they transfer almost all the rebates from cloud vendors to customers."

In the past, agents usually returned a portion of the rebates provided by cloud vendors to customers.

"Typically, agents receive rebates in installments: a portion each month, quarter, and year, with the full commission not collected until one year later. Now, to attract customers, some agents choose to return all rebates to customers at once, essentially advancing part of the payment, which is undoubtedly risky."

Of course, besides pressure from official sales, cloud agents are not as comfortable during Double 11 as they used to be.

"With Alibaba Cloud's three-pronged channel strategy, most customers agents now contact have budgets of less than one million yuan. Coupled with the fact that everyone now knows agents can offer higher discounts, many customers compare prices, with multiple agents competing for the same customer. The result is that profits are getting thinner and thinner."

Xiao Xi'ao added that when multiple agents compete for the same customer, they sometimes have to apply for additional discounts. "For some large orders, especially those exceeding 200,000 yuan, regular discounts can no longer meet customer needs. At this point, only internal willingness to provide additional subsidies of 3-5% can help us close the deal."

Regarding this year's Double 11 promotion, Xiao Xi'ao said, "I expect this month's performance to reach around 2 million yuan, compared to around 1 million yuan per month usually. Although it helps to some extent, the effect is not significant."

Undoubtedly, e-commerce Double 11 is the most successful promotional concept peddled by Alibaba.

The "Double 11" in the cloud computing field was also created by Alibaba. According to public information, Alibaba Cloud typically sets the first cloud computing version of "Double 11" in 2015.

However, in reality, the Double 11 in the cloud computing field actually originated in 2014.

On December 18, 2014, Alibaba Cloud launched the "12·18 Programmer Carnival" for cloud computing procurement by enterprise customers for the first time. At that time, Alibaba Cloud offered significant discounts on its main cloud computing products.

To expand the event's influence, the media at the time labeled it as Alibaba Cloud's intention to create a "Double 11" in the cloud computing field.

As the price discounts offered during the event were highly attractive to small and medium-sized enterprises and medium-sized developers, it can be said that Alibaba Cloud sold cloud servers at almost rock-bottom prices. Some netizens even joked, "Did Alibaba have a surplus of servers after Double 11 and is now clearing them out?"

Behind this joke lies a deeper reality - the initial e-commerce Double 11 frenzy relied on cloud computing to support its massive operations.

Xuan Yu, the general manager of Alibaba's merchant business for Double 11 in 2014, once mentioned in an offline exchange, "Business is forcing cloud computing to mature."

This is why Alibaba managers often use the term "major military exercise" to describe Double 11 - on some level, Double 11 is an extreme peak challenge that significantly boosts core capabilities such as payment and logistics. Through this extreme load training, Alibaba can continuously "squeeze" technology, thereby driving the development of Alibaba Cloud computing.

From this perspective, it is not difficult to understand why, for a long time, the annual e-commerce Double 11 has sparked a wave of marketing hype for cloud computing to provide underlying support for e-commerce, especially prominent among major vendors like Alibaba Cloud and JD Cloud.

So, does this logic still hold now? How much grinding is left in the e-commerce Double 11 training ground?

At this stage, with the gradual maturity of cloud computing technology and the stabilization of the market landscape, cloud vendors should, theoretically, no longer rely on annual e-commerce promotions to showcase their technical prowess.

After all, the traffic load of e-commerce promotions has long been incorporated into these vendors' regular service systems, with technology having transformed into a "basic configuration" rather than a competitive advantage that needs special emphasis.

Some evidence to support this includes:

Cloud vendors' Double 11 has long been fully synchronized with e-commerce platforms' event timings, indicating that they can not only fully support e-commerce platforms' promotions but also smoothly accommodate substantial cloud service demands from other enterprises, with technical support already normalized and comprehensive;

In the past, Baidu Cloud, Huawei Cloud, and Tencent Cloud also leveraged e-commerce Double 11 as a marketing node to showcase their technical prowess. However, nowadays, this practice of relying on e-commerce promotions to sell technology has almost disappeared;

Those who still continue this strategy are primarily Alibaba Cloud and JD Cloud, closely related to the support of their respective e-commerce businesses. However, despite Volcano Engine also having an e-commerce business, it has rarely hyped its technical prowess during Double 11 this year, instead focusing more on other dimensions.

To put it bluntly, after all these years, "technological warfare"-style marketing should gradually shift towards a long-term strategy centered on service quality and stability. After all, cloud computing vendors should emphasize "sustainable operational support" rather than one-off "traffic raids.""Double 11 is gradually losing its significance as an "annual showcase" for cloud vendors.