Shulou(Shulou.com)11/24 Report--

The competition in the cloud computing market is entering a new stage, and the government-enterprise market, including the government cloud, has become the main growth point. In this field, the new forces represented by Huawei Cloud and operator Cloud have severely attacked Internet cloud computing companies such as Aliyun and Tencent Cloud.

In the past July-August, Huawei Cloud won two consecutive orders of 100 million yuan for government affairs, both of which were purchased from a single source.

On August 22, Changsha Government Affairs Cloud II service procurement project (cloud service part) announced that Huawei Cloud won the project with a budget of 287 million yuan through single-source procurement. On July 4, Beijing Changping District Government Yun 2022-2025 service project fund procurement results announced that a single source of procurement is Huawei Cloud, with a budget of about 190 million yuan.

Single-source procurement also means that peers such as Aliyun and Tencent Cloud do not even have the opportunity to participate in bidding in these two projects.

Government cloud is a new market in the field of cloud computing with hundreds of billions of yuan of "cake". IDC, a third-party agency, reported that the overall market size of government cloud in 2021 was 42.716 billion yuan, an increase of 21.47 percent over the same period last year. The forward-looking Industrial Research Institute predicts that the size of China's government cloud market is expected to reach 149.73 billion yuan by 2023.

At the same time, the layout of this market, the player's playing style is quite different from that in the Internet market. New forces attack, the transformation of established Internet cloud computing companies, a new cloud computing market pattern is emerging.

First, why Huawei Cloud has become a single source of procurement with hundreds of millions of yuan of government orders? Looking at the announcements of the two major government cloud projects in Changsha and Changping District of Beijing, we can see that the content of the project is mainly to manage the intensive cloud of the whole city or region, while Huawei Cloud provides services at many levels, such as IaaS, PaaS and so on.

This phase of the project belongs to the infrastructure and service upgrading construction of the urban "data brain", which involves the continued acquisition and expansion of the cloud base of the second phase of government affairs, the introduction of government public cloud services, the upgrading of security protection system and so on.

Let's take a look at the Changping District Government Cloud 2022-2025 service project on July 4. It is reported that the project requires upgrading and improvement of the existing IaaS services, including database, cloud native, AI and other PaaS layer services. This platform carries most of the core business systems of the administrative departments of the whole region.

It is worth mentioning that both projects are procured from a single source.

In other words, peers such as Aliyun and Tencent Cloud are not qualified to participate in bidding in these projects. In fact, this procurement method is also common in many other small government cloud projects. For example, the 42 million yuan Langfang government cloud project won by China for Cloud in July this year also uses single source procurement.

Why do these projects need and can be procured from a single source?

The announcement of Changsha Government Affairs Cloud Phase II Service Purchasing Project explains the reasons for this move:

1. The main content of Changsha government cloud second phase service procurement project (cloud service part) is the continuation of the "Changsha government cloud second phase base project (new part)".

Up to now, 279 business systems of 52 units in the city have been relocated to the second phase of Changsha government affairs. Cloud platform, cloud backup, cloud security and other stable operation.

Huawei is the only supplier of key technical support, unified safety management and unified operation and maintenance of the Changsha Government Cloud Phase II pedestal project (new part).

2. The project belongs to the purchase service-oriented public service project, and the platform carries the core business system of the city's government departments, involving important contents such as government information confidentiality and information security, with a large user base and a wide range of users. It is required to ensure the stability of the business and the continuous operation of the system, and to ensure data security.

To meet the provisions of Article 31, paragraph 1, of the Procurement Law of the people's Republic of China that procurement can only be purchased from a single supplier and point (1) of Article 11 of the measures for the examination and approval of Hunan Provincial Government Procurement through non-open bidding. "Public service items have special requirements, resulting in procurement only from a specific supplier".

3. In December 2019, Huawei Technology Co., Ltd. integrated the cloud business of Huawei Software Technology Co., Ltd. into Huawei Cloud Computing Technology Co., Ltd.

In short, it is:

1. This project was done by Huawei Cloud in early June 2019, and it runs stably and safely, so it makes sense to continue to do it now.

2. The project involves the core business system of the city's government departments. In order to ensure data security, it can only be purchased from a single supplier.

Single-source procurement is also explained in the announcement of the Government Affairs Cloud Project in Changping District, Beijing:

The project requires upgrading and improvement of the existing IaaS services, adding database, cloud native, AI and other PaaS layer services, and this platform carries most of the core business systems of government departments in the region, involving important contents such as government information confidentiality and information security, with a large user group and a wide range of users, and most core business systems require round-the-clock operation.

In order to ensure the intensification, consistency and professionalism of the construction of the district government information cloud platform, and at the same time, the implementation of the project should also ensure the security of the district government information and the business can not be interrupted, so the project meets the conditions of single-source procurement, so the project carries out single-source procurement from the only supplier Huawei Cloud Computing Technology Co., Ltd.

In other words, it is mainly because the project involves government information confidentiality and information security, so the relevant departments choose to purchase from specific manufacturers.

Second, hundreds of billions of yuan government cloud "big cake", three types of players competing for government cloud is a "big cake" in the cloud computing market. At present, with the weak growth of the Internet market, the government-enterprise market has become a new starting point for cloud computing enterprises, of which the largest share is the government cloud market.

According to the China Smart City data tracking report released by third-party agency IDC on August 9, the overall market size of government cloud in 2021 was 42.716 billion yuan, an increase of 21.47 percent over the same period last year. The forward-looking Industrial Research Institute predicts that the size of China's government cloud market is expected to reach 149.73 billion yuan by 2023.

In this market, in addition to Internet cloud computing companies such as Aliyun, Tencent Cloud and Baidu Cloud, there are also ICT cloud computing companies like Huawei Cloud, while the three major operators and national cloud enterprises such as Chinese e-cloud also have an advantage. It can be seen that these three categories of players carve up the market in many projects and regions.

Taking the Changsha government cloud project announced as an example, in the project that has lasted for nearly five years totaling more than 1 billion yuan, we can see that China Telecom, Tencent Cloud and Huawei Cloud have all gone down.

On December 11, 2017, the e-government management office of Changsha Municipal people's Government issued the contract announcement for the first phase of the construction project of Changsha Government Cloud. China Telecom won the bid for 126 million yuan. Just more than two years later, the first phase of the project issued a 22 million yuan expansion project in March and a 54.46 million yuan optimization and upgrading project in July, which will continue to be undertaken by China Telecom.

The second phase of Changsha government affairs cloud project (new part) was launched in June 2019, with a project budget of about 240 million yuan. Huawei was identified as a supplier through single-source procurement. At that time, Huawei Cloud, which had just been established for two years, had annual revenue of only 500 million yuan, and its market ranking was relatively low.

The 287 million yuan Changsha government affairs cloud phase II project (cloud service part) reported in this report is a continuation of the above projects.

On June 28, 2019, Tencent Cloud, as a single source, won the 520 million yuan "urban super brain (data brain platform and some intelligent applications)" project in Changsha, just before and after the launch of the second phase of the Changsha government affairs cloud project.

Taken together, China Telecom has won nearly 200 million yuan in orders for the first and second phases of the government cloud project in Changsha, Huawei Cloud about 520 million yuan and Tencent Cloud about 520 million yuan.

An insider at the Huawei Cloud City Summit previously told Zhidong that by visiting many cities in 2021, it found that compared with the scattered government clouds built by different commissions that were prevalent in major cities before, more cities have created an "intensive" demand-to build a unified cloud across the city.

When suppliers are aware of this trend, they also choose to communicate actively with their competitors.

Take "one Cloud in the City" in Changsha as an example, it is the first time that Huawei Cloud has adopted the "government cloud + public cloud" model as a support to support multi-cloud integration, thus supporting the application of different delegated departments.

Third, Huawei Cloud and operators have enough to eat, Internet companies fall down? Although there are many large single cakes of government cloud projects around the country, which will often feed many cloud computing providers, Internet cloud computing companies can still see obstacles in this competition. Due to data security and other reasons, some regional government cloud projects are only eligible for participation by specific manufacturers, who are likely to be players from Huawei or the national team.

In the first half of the development of cloud computing, Internet customers are the main objects on the cloud.

However, since 2021, with the promotion of the digital transformation of government and enterprises, the government-enterprise market has become a new growth point of cloud computing. This also gives Huawei Cloud and operator Yunwan Road the opportunity to overtake.

On Huawei's cloud side, its operators and ICT infrastructure have already served government cloud customers in many cities. According to public data, Huawei Cloud has served more than 700 government cloud projects since 2012, including more than 40 national ministerial-level projects, more than 40 provincial / municipal projects, and more than 630 projects of city and county governments and commission bureaus.

On the operator cloud side, the three major operators recently released financial results for the first half of 2022: Tianyi Cloud (telecom cloud) revenue of 28.1 billion, an increase of 100.8% over the same period last year; mobile cloud revenue of 23.4 billion, an increase of 103.6% over the same period last year; and Unicom Cloud revenue of 18.7 billion, an increase of 143.2%. More than 100% of the growth is mainly due to the increased demand in the government and enterprise market.

According to the China Smart City data tracking report (July 2022) released by IDC, Huawei Cloud accounts for 25.8% of the market share of government cloud infrastructure, while Wave Cloud, China Telecom, Ziguangyun / Xinhua 3 and China Mobile rank in the top 5.

Despite the fierce arrival of Huawei Cloud and operator Cloud, Internet cloud computing companies such as Aliyun, Tencent Cloud and Baidu Cloud are not waiting to die, but take the initiative to seek growth.

On July 13, Aliyun announced that it would invest 1 billion yuan to cover 300 cities in the next three years, and intended to take measures to link 18 industry departments and 16 regions that were just established last year. Just in March this year, Cai Yinghua, who was the president of China's government and enterprise business, parachuted into Aliyun as the global sales director of Aliyun Intelligence, and then the department carried out several rounds of rapid changes, restructuring and personnel optimization. it can be seen that it attaches great importance to the government and enterprise market.

On July 12, Tencent Cloud and Intelligent Industry Group (CSIG) announced the establishment of a government-enterprise business line, proposing to accelerate the sinking of the regional market, with a professional front-line team to focus on the digital transformation of government affairs, industry, energy and other fields, and provide personal services to customers. Earlier, Tencent CSIG has just carried out a big internal reform to reduce the weight of non-self-developed products in sales performance.

On July 21, Shen Xi, head of trust in Baidu's intelligent cloud business group, made his public debut. He is also a better marketing leader than his previous leader, Wang Haifeng. He announced that he would launch Kyushu District and County brain to promote urban-rural coordinated development and revitalize rural areas with AI.

It can be seen that the Internet cloud computing companies are also making a big shift collectively.

On the one hand, this conforms to the development trend of the times and is expected to make the cloud computing technology that has been deposited for many years play a greater application value. The government cloud has the demand for high-tech big data and intelligence, and the Internet cloud computing companies have technological advantages; on the other hand, as new forces, national teams such as Huawei Cloud and operator Cloud have more selling points in terms of data security and state-owned capital background. is a strong enemy that Internet companies have to face.

With the attack of new forces and the transformation of Internet cloud companies, it has become the main industrial trend of cloud computing companies.

Conclusion: three categories of players compete for the government cloud market, and the market order is changing. with the development of new infrastructure and digital economy, the demand for digital transformation of government and enterprise markets such as government affairs, health care, education, transportation and finance is increasing. Shangyun has become a major demand for digital transformation, which promotes cloud computing companies to seek new growth points here.

In order to break the data chimney, local government affairs clouds have adopted the intensive construction of one cloud in the city one after another. These projects with large amount and long cycle have given ICT, operators and Internet giants room for development, and a number of manufacturers can work together to serve a project.

But at the same time, government customers pay more attention to data security and independent innovation, which also makes Huawei Cloud and operator Cloud quickly eat several "big cakes", and the Internet cloud computing giants have a relatively weak foundation in the traditional market.

However, whether fruitcake or cheesecake, it is cake. The government cloud still needs more advanced cloud computing technology, and the long-term in-depth competition will still focus on technological innovation.

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