Text | Light Cone Intelligence, by Yu-qi Liu

After 2014, Huawei has set up two business divisions under the name of BU.

The first is a cloud, and the second is a car.

These two businesses have several common characteristics: First, they both represent the future trend, which is the track that Huawei focuses on betting, and the organizational function is higher than the product line. However, the current market size and organizational needs of the business are not up to the size and level of BG.

Cloud business is such a sexy but difficult business for Huawei. Although Huawei Cloud started at the latest, it has the fastest growth rate. According to Gartner’s global cloud market research report released in 2021, Huawei’s global IaaS market ranking rose to the top two in China and the top five in the world.

In the past three years, Huawei Cloud has been rushing all the way, and it has quickly seized market share with big customers such as government and enterprises. Recently, however, judging from the series of actions of Huawei Cloud, it seems that there is a tendency to slow down.

Recently, "Light Cone Intelligence" learned exclusively that Huawei Cloud is adjusting its agent policy, and it is suspected that it will tighten the commission rebate ratio and cancel the "20% discount authority", which means that many small and medium-sized customers can no longer enjoy the 20% discount policy. But at present, the specific rules have not yet been announced.

In fact, as early as the end of 2021, some agents were informed that Huawei would adjust its policy on January 1, 2022, but somehow it was not implemented at that time.

"Light Cone Intelligence" visited Huawei Cloud officially, and after the policy adjustment, the proportion of rebates is suspected to be lower, which means that the profits distributed to agents will become less. In this regard, multiple cloud agents intelligently represent the light cone:"In terms of cost performance, Huawei Cloud is not as good as Tencent Cloud. If the proportion of rebates is reduced, the motivation to recommend Huawei Cloud to customers will be lower."

In addition to policy tightening, the timing of this adjustment is also quite interesting.

Last week, Huawei released its operating results for the first quarter of 2022, achieving sales revenue of 131 billion yuan, a decrease of 21.2 billion yuan compared with 152.2 billion yuan in the same period last year, down 13.9% year-on-year; Not only that, Huawei’s net interest rate also dropped from 11.1% in the same period last year to the current 4.3%, down as high as 6.8 percentage points year-on-year.

All kinds of data show that after being forced to cut off the most profitable consumer business, Huawei is facing severe commercialization pressure and is desperately looking for new commercialization growth points.

It takes a thousand days to raise soldiers. At this time, it may be time for the two "BUs" to stir up the girders.

In the face of two businesses with a future valuation of hundreds of billions of dollars, compared with building a car, cloud computing is the unlisted Huawei’s most "instant" money-making business.

In 2019, Huawei Cloud Computing Technology Co., Ltd. was established. Huawei Cloud & AI(Cloud & AI) was originally headed by Xiahou Jinlong in the east, and Huawei Cloud was officially upgraded to the company’s fourth largest business group: Cloud & AI BG.

Many people are curious, how did Huawei Cloud rise rapidly? Many "customers" and agents of Huawei Cloud may be able to answer this question.

There is a popular saying in the circle of cloud computing, that Alibaba Cloud takes the double eleven peak exam every year, Tencent Cloud supports students to fight the glory of the king, and Huawei Cloud supports more and more star divorces on Weibo.

In fact, for Huawei Cloud, government and enterprise customers are strong points, but how to deal with Internet KA customers and small and medium-sized enterprises like Weibo is the real place to compete with tigers.

An insider who once worked in a portal revealed to Light Cone Intelligence: "Huawei is the largest sponsor of the 2020 Summit. Later, I learned that it turned out that the underlying cloud service of this portal was switched from Tencent Cloud to Huawei Cloud. for exchange, Huawei Cloud promised to convert all the expenses of the first year into advertising fees and put them into the portal. "

Cloud services are basically renewed on an annual basis, and late renewal is an important source of income. The migration cost of large customers is also very high. If there are no very serious bugs, it will not be easily switched on the premise of ensuring performance.

In the small and medium-sized customer groups, Huawei borrows the power of agents and leverages its strength.

For cloud vendors, the importance of agents for them to cut into the SME market is self-evident. Agents are required to complete pre-sales, after-sales delivery, maintenance and other actions. Recruiting agents can also help reduce the task pressure, so whether it is the original factory, the general generation, the first-class agents or the second-class agents, they are all developing their subordinates crazily.Alibaba Cloud and Huawei Cloud have recruited nearly 3,000 first-class agents all over the country, and they have not stopped yet.

Among them, Weishi Jiajie is also the agent of Alibaba Cloud and Huawei Cloud, and its insiders told Guangcone Intelligent that the company is divided into two cloud divisions, but the style of play is not the same. In recent years, Alibaba Cloud has paid more attention to profits and rarely fought price wars. However, in order to seize the market, Huawei Cloud will use the highest possible discount to grab customers, and the company will earn less; At the same time, the discount rebate offered by Huawei Yunyuan manufacturers is 5%-10% more than that of Alibaba Cloud.

According to Guangcone Intelligence, at present, the rebate rate of Huawei Yunyue is about 25%, and it will be 3% at the end of the year after more than 1 million yuan, and the subsequent customers will renew their fees, and the rebate rate will remain unchanged. Alibaba Cloud, on the other hand, has reduced the rebate rate of users’ renewal fees by about 8%, so the agents in the early stage are more willing to recommend Huawei Cloud.

The discount policy for agents in Alibaba Cloud is 28%, and Huawei Cloud is 20% before this adjustment, and the overall pricing in Alibaba Cloud is higher. After the discount, Huawei Cloud is more cost-effective.

Not only that, a few years ago, Huawei Cloud also rapidly expanded the scale of its agents through the zero threshold policy.At present, Alibaba Cloud has about 10,000 agents in China, and Tencent Cloud official website data shows that there are nearly 8,000 agents, while Huawei Cloud has rapidly expanded to 8,000 agents after being seven years late, which is even with Tencent Cloud.

According to Alibaba Cloud’s official recruitment standards for agents, Alibaba Cloud Agency Company requires a registered capital of 1 million yuan, no less than 20 employees, and a technical team of more than 2 people. At the same time, it also requires a certain number of salespeople who have passed the ACE test and a deposit of 10,000 yuan. However, Huawei Cloud individuals and enterprise secondary dealers have no requirements for capital injection, company employees and deposit, which is almost zero threshold. Only enterprise-level elite dealers have a registered capital of 100,000 yuan and an annual sales limit of 100,000 yuan.

The rapid expansion of the scale of agents with such a low threshold has given agents a certain impetus and achieved initial results in a short time. A customer of Huawei Cloud shared with Guangcone Smart: "For a while, Huawei’s marketing was very hot. At that time, several waves of Huawei agents came to our company to talk about business. Our main business is overseas, so the cost of using Amazon cloud is about 10 million a year. After evaluating Huawei Cloud in the later stage, the result was not bad, and it was decided to migrate part of the business to Huawei Cloud. "

However, although it has caught up with the number of agents in a short time, it still has a certain distance from Alibaba Cloud in terms of scale. Among the more than 10,000 agents in Alibaba Cloud, there are clear grades and KPI settings. The performance of small agents ranges from tens of thousands to hundreds of thousands a year, and that of large agents can be around 100-200 million a year. However, there are mostly small and medium-sized agents in Huawei Cloud, and there are almost no agents with a performance of more than 80 million a year.

It is this two-pronged approach that makes Huawei Cloud rise rapidly.

Surprisingly, Huawei Cloud seems to be less popular in this year’s agent market.

A second-level agent told Guangcone Intelligence: "Small companies go to the cloud, in fact, all three can meet the basic functions, such as user data, OA, and back-end ERP. These functions are very mature in the cloud. In contrast, customers with greater concessions, higher cost performance and low budget are more willing to choose Tencent Cloud."

Originally, strong discounts were one of the means for Huawei Cloud to cut into the market. However, since last year, various agents in Lu Yun have been involved, and even Alibaba Cloud, which is not very favorable, has begun to offer discounts. In 618, Double Eleven and Double Twelve, new users have been introduced at a fixed price, and there are even group activities.

Not only did everyone start activities, but the basic price was also "copied" by Tencent Cloud. According to the above-mentioned agents, Tencent Cloud with 4 cores, 8G and 5MB configurations has an annual fee of more than 1k, and can also get a 20% discount on this basis, while Huawei with the same configuration costs about 5k.

"It is more cost-effective for the company to use Tencent Cloud," said the agent. "Under the epidemic situation, the first consideration for everyone is cost performance. Now Huawei Cloud is not recommended unless customers take the initiative to consult."

And this is not the judgment of an agent. After consulting a number of cloudy agents, Guangcone Intelligent found that for small companies, people prefer to recommend Tencent Cloud, while larger companies are not short of money and often choose Alibaba Cloud. This makes the position of Huawei Cloud very embarrassing.

In the case that the agent market has been cold, Huawei Cloud tightened its policy again, which also surprised suppliers.

Some agents speculate that Huawei Cloud has gone through the first stage of "taking volume and paving the market", and then it may have to recover some profits to serve its customers. "After all, Alibaba Cloud has developed for more than ten years, and the first-Mover advantage is obvious. Huawei Cloud cannot really understand the needs of SME users through agents, and cannot be a small enterprise with the idea of serving big customers."

On the one hand, it is to make money, and more importantly, it is to start from business and be close to users.

However, Tencent Cloud is in hot pursuit, and Alibaba Cloud is also struggling to grab food in government and enterprise business.

In the article "Cai Yinghua Airborne, Alibaba Cloud Unified Sales", Guangcone Intelligent found that the last personnel structure adjustment in Alibaba Cloud quickly closed the reporting relationship of sales line M6, which also meant that the sales team was more systematic and large-scale. Under such adjustment, the business side paid more attention to pan-government business, regional sinking and industry deepening.

This is the hinterland of Huawei Cloud.

At that time, we sorted out the government’s bid-winning projects in Alibaba Cloud in 2021 and 2022, and compared the bid-winning projects in Alibaba Cloud. We found that although the number of projects was similar, many large projects were taken away by Alibaba Cloud.

For example, on April 12, 2022, Ningbo Radio and Television Group purchased Ningju Public Cloud Project, with a target amount of 8.55 billion. According to informed sources, Huawei Cloud was suspected to have bid for this project, but it was finally awarded to Alibaba Cloud.

However, it can also be seen from the bidding project that compared with Alibaba Cloud, Huawei Cloud is more focused on building a government cloud and a smart city, and cooperation with operators is also a unique advantage.

Although Tencent Cloud grabbed small and medium-sized customers at low prices before, and then Alibaba Cloud’s "poaching" government project, Huawei Cloud is still struggling to break through.

For Huawei Cloud, its shortcomings are as obvious as its advantages.

The advantage is that the hardware is hard enough. Compared with the other two companies, Huawei started with hardware, and its supporting product line is relatively long, including hardware products such as servers, storage and networks, which have self-research capabilities and strong market position. Service operators, government and people’s livelihood and other "business-critical" customers have rich experience and have always considered stability. Because of this, many big Internet vendors have gradually started to migrate to Huawei Cloud, such as Weibo.

However, the "imperfect" shortcomings of its software and service ecology have also been exposed in recent years, and the missing business scenarios within the group will take a long time to polish.

"Ali can polish the cloud solution with its own huge ecological practice; Tencent Cloud allows small program developers who settle in WeChat to choose their services; Microsoft started with software and services such as office and Dynamics, and started in ‘ Andy Beer’s Law ’ Occupy the upstream of the industrial chain, you can cloud your own enterprise software and services at once. The advantages of these opponents need Huawei Cloud to find ways to make up for it. " A former employee of Microsoft Azure Cloud once analyzed in an interview with 36kr.

If there is no business scenario, then create a business scenario. If it is difficult to cut in at home in a short time, then take the overseas line.

At the end of April this year, Huawei Cloud launched a cross-border e-commerce platform to explore new strategies and new paths for cross-border e-commerce enterprises together with nearly 100 enterprises and institutions in the cross-border e-commerce field.

At present, cross-border e-commerce merchants do encounter many problems in their business operations. It is not uncommon for apps to be removed from the shelves and frozen. They need a stronger and more stable "backing" to support the sea.The platform for cross-border e-commerce released this time also revealed another idea, namely SaaS and productization.

Huawei Cloud has transformed the scenes needed by cross-border e-commerce from site decoration, commodity management, order management, cross-border payment and logistics inquiry into instantly available products. Merchants have customized styles, dashboards and equipped with various payment plug-ins and logistics tracking, trying to fill in the previous business scenes and software shortcomings.

Huawei Cloud is also trying to enter Ali’s e-commerce hinterland.

On the other hand, under the cloudy trend, Huawei Cloud has also ushered in new opportunities.

The trend of cloudy deployment is becoming more and more obvious, which is not only safer, but also more efficient by integrating various performance boards.

"In the future, for enterprises, choosing a cloud platform is definitely a combination of the strengths of each family and a cloudy choice. For example, Tencent Cloud is the first choice for audio and video, Huawei Cloud is the first choice for the Internet of Things, etc., instead of just choosing one foolishly. When the experience is not good, it is often not conducive to the development of its own business. " An agent of several cloud vendors said to the light cone intelligence.

However, in 2019, the penetration rate of cloud computing market in China exceeded 10%. Looking at the world, until 2021, the market penetration rate is less than 15%. This means that no matter who it is, the future cloud penetration still has a long way to go.

The market is very big, and it may not be the best solution for Huawei Cloud.