According to the prospectus, the overall revenue of Qingyun technology increased steadily from 2017 to 2019. Among them, the revenue of cloud services (public cloud) continued to grow slightly, but it was not yet profitable. The revenue of cloud products (private cloud) increased year by year and reached a relatively stable gross margin, especially the revenue of super fusion and software defined storage products showed explosive growth.
Public cloud and private cloud two legs walk
As we all know, cloud computing industry needs a large amount of capital investment, and it is an industry with a long return period.
In the public cloud business, due to the high standardization and homogeneity of products, fierce competition in the industry, and price as the core concern factor of users, it has obvious scale effect. At the same time, public cloud needs to buy or rent a large number of servers and other hardware, and invest in data center and network construction for a long time.
Even AWS, the worlds No. 1 cloud computing company, has spent a decade turning its public cloud business into a profit. Alibaba cloud, Jinshan cloud and many other domestic well-known cloud computing manufacturers are also facing continuous losses.
It can be said that the public cloud is still a loss oriented market, and it is almost a consensus in the industry that public cloud manufacturers can not make profits in a short period of time.
Different from the public cloud, private cloud is mostly for traditional industry customers, with complex business, outdated IT system, and close relationship between upstream and downstream. It has higher requirements in terms of stability, security, product performance, customized solutions, professional and efficient services. In the private cloud field, the test is the cloud computing enterprises technical strength, productization ability, enterprise service ability and sales channel strength.
Different from Alibaba cloud, Jinshan cloud and other cloud computing companies that mainly focus on public cloud, Qingyun technology is not only a cloud service provider with certain scale and influence in both public and private clouds, but also its public cloud and private cloud use the same architecture and the same set of code, which has great advantages in the hybrid cloud market.
In the field of public cloud, the whole market will be dominated by losses for a long time, and Qingyun technology is no exception. However, in the field of private cloud, Qingyun technology can gain great competitive advantages by virtue of its outstanding product performance, flexible solutions, many benchmark cases in key industries, and outstanding product delivery and service capabilities.
According to the prospectus, by the end of 2019, the revenue of private cloud of Qingyun technology is about twice that of public cloud, and the growth rate of private cloud will be significantly greater than that of public cloud.
Especially in the financial industry, the requirements for technology leadership, security compliance and business stability are higher than those of other industries. Qingyun technology is one of the few cloud service providers in China that can undertake the cloud demand on the core system of the financial industry. Therefore, it has won the favor of customers in the financial industry, such as Bank of China, China Merchants Bank, Everbright Bank, Taikang Insurance, sunshine insurance and other large financial institutions Are their long-term customers.
Today, Qingyun technology has delivered a beautiful report card in the private cloud business. In the future, it will seize the cloud opportunity of traditional enterprises, continue to cultivate the private cloud market, and realize the further penetration of key industries. In the long run, the overall profit is very promising.
Figure: some typical customers of Qingyun technology cloud products
Hybrid cloud strategy drives future profits
In fact, Qingyun technology has long recognized the difference between public cloud and private cloud in business model, and has a keen insight into the trend of enterprise digital transformation, that is, enterprise users will further turn to cloud computing products with richer functions, better performance and higher added value, from the single deployment mode of public cloud and private cloud , upgrade to mixed deployment mode.
At the end of 2014, Qingyun technology took the lead in the industry in the transformation from public cloud to integrated architecture of public cloud and private cloud.
Through hybrid cloud, Qingyun technology can expand from private cloud to public cloud market, and public cloud can also expand to hosting cloud and private cloud market, so as to promote the common growth of public cloud and private cloud.
This rich cloud deployment mode also enables Qingyun technology to take advantage of its relatively perfect product line, explore opportunities for cross selling, and effectively improve sales efficiency while further improving the scale of business income. This has laid a solid foundation for Qingyun technology to achieve profitability.
In addition, the prospectus shows that in order to achieve profitability, Qingyun technology will also strengthen cost control, especially cost optimization for the public cloud that has been fully invested, so as to give more play to the solution advantages of unified architecture hybrid cloud, and improve operational efficiency.
In terms of channel construction, Qingyun technology will continue to strengthen the nationwide distribution network construction, management and maintenance, focus on leading enterprises in various industries, form benchmarking cases and good industry reputation, and realize the rapid establishment of brand image and rapid breakthrough of key industries.
In terms of long-term development, Qingyuns hybrid cloud strategy will play an important role. On the one hand, the strategy will effectively promote the sales of public cloud and improve the utilization rate of data center to improve the gross profit rate of public cloud business. On the other hand, focus on the private cloud with higher gross profit margin to further drive the overall gross profit margin.
With the further progress of cloud computing, Internet of things, edge computing, 5g, artificial intelligence and other basic technologies, cloud computing will no longer be simply limited to the data center plane, but will further go to the edge and terminal, forming a generalized cloud computing platform connected by intelligent network.
2. Core competitiveness of Qingyun Technology
According to the prospectus, the total amount of funds to be raised by Qingyun technology is about 1.188 billion yuan. Among them, 730 million yuan will be used to upgrade existing cloud computing products, which accounts for 61.77% of the total amount raised.
The remaining 140 million yuan will be used for the research and development of global cloud technology, and the other 160 million yuan will be used for the construction of cloud network integrated infrastructure, which are mainly forward-looking technology investment.
In addition, the R & D expenses of Qingyun technology continued to grow. From 2017 to 2019, its R & D expenses accounted for 12.82%, 22.81% and 18.45% of the operating revenue respectively.
We can see that Qingyun technologys biggest use of capital is its investment in technology.
As a technology oriented cloud computing company, Qingyun technology takes the technology self-study route, which is different from the most cloud computing manufacturers based on openstack open source technology. Its core competitiveness lies in the technology leading and independent innovation.
The continuous investment in technology R & D has transformed Qingyun technology from public cloud and private cloud service provider to platform level hybrid cloud ICT service provider.
At present, Qingyun technology has a series of products such as cloud platform, software defined storage, hyper fusion, sd-wan intelligent Wan, container, multi cloud management platform, enterprise cloud disk, multi cloud application management platform, distributed database, digital office and other products, which can realize the delivery and unified management of public cloud, private cloud, hybrid cloud and hosting cloud with unified architecture.
Among them, with the arrival of the cloud cycle of traditional enterprises, Qingyun technologys enterprise cloud platform and hyper integrated system have grown explosively and gradually become its core revenue source; with the exponential growth of data volume, storage demand is higher and higher, and the software defined storage products of Qingyun technology are also growing at a high speed, which is expected to become an important source of revenue in the next step.
Next, facing the mature commercial trend of container technology, Qingyun technology is constantly improving and upgrading container platform products, so that enterprises can quickly enter the cloud era.
At present, Qingyun technologys container technology has been in the forefront of the industry, and its kubesphere container platform has entered CNCF (cloud native Computing Foundation) landscape, and obtained the trusted cloud & kubernetes dual certification of CNCF and China Institute of information and communication, which is ready for the future industry upgrading.
At the same time, in the trend of hybrid cloud and multi cloud, Qingyun technology has successively launched sd-wan, unified multi cloud management platform and other services and products. By taking advantage of the advantages of unified technology, Qingyun technology has launched a wealth of hybrid cloud solutions, which can help more traditional enterprises to achieve easy access to the cloud.
Due to the self-study of core technology, based on the unified architecture of the whole stack cloud, Qingyun technology also launched the edge computing and Internet of things platform, expanding the business scene from the data center to the edge and terminal of the Internet of things, so as to form an integrated service of cloud and Internet of things, laying the foundation for the digital demand of 5g and the Internet of things era.
In general, Qingyun technology adheres to independent research and development in core technology, which has laid a solid foundation for it to become a platform giant.
The continuous technology investment enables Qingyun technology to continuously expand the product line width and build the full stack cloud capability. This product matrix further forms a very high competitive barrier for the platform, which will not be easily eaten by giants, and has the potential to become a platform giant.
Today, Qingyun technology chooses to continue to invest in product upgrading and forward-looking technology research and development by raising funds. In fact, it is to consolidate its own competitive barriers and go further in the market.
Of course, the research and development of forward-looking technology often takes 2-3 years or even longer to realize. The ability of Qingyun technology to balance technology and market will also be tested whether technology investment can be transformed into real performance in the future.
3. The investment value of Qingyun Technology
After clarifying the above problems, we will find that there are still many bright spots in Qingyun technology, such as: where are the opportunities of Qingyun technology, whether Qingyun technology is worthy of long-term investment, and so on.
To answer these questions, lets first see what position Qingyun technology is in the industry, which is also the focus of this inquiry.
In the hyper integrated market, Qingyun technology, Huawei, Xinhua 3 and other large IT manufacturers are selected as one of the seven key enterprises in Gartners competitive pattern of Chinas hyper integrated market in 2019. According to the IDC report, Qingyun technology has been shortlisted as Chinas super integrated core manufacturer for two consecutive years. In 2019, Qingyun technology ranked sixth in the industry in terms of the overall market share of super integration, after Huawei, Xinhua 3, sunwin, Lenovo and Dell EMC.
In the software defined storage market, IDCs latest report shows that Qingyun technologys block storage market share ranks the fourth in the industry, second only to Huawei, Xinhua 3 and star Trina; in the object storage market, Qingyun technology ranks the seventh in the industry, after Huawei, star Tianhe, Xinhua 3, etc.
As can be seen, the private cloud products of Qingyun technology are in the forefront of the market. The hyper converged systems and software defined storage products developed by Qingyun technology are the leading architectures for private cloud deployment.
According to Gartner report, in the next 5-10 years, San / NAS storage will be gradually replaced by software defined storage. Hyper converged architecture has been accepted by the market and customers, and will become the core of data center infrastructure.
Because its technology is advanced enough, private cloud products have become the business of Qingyun technology in recent three years, with a sharp increase in revenue and high gross profit margin.
In the field of public cloud, although the market scale advantage of Qingyun technology is not as good as that of Alibaba cloud and Tencent cloud, its technology leadership is generally recognized by the industry. At present, as a part of Qingyun technology hybrid cloud strategy, public cloud has formed a unique competitive advantage in the industry.
So, will Qingyun technology, which has established hybrid cloud as its strategic direction, show amazing explosive power in the future competition?
Opportunity 1: lay out hybrid cloud and make profits in the future
When it comes to hybrid cloud, it is an important trend of cloud computing industry after public cloud and private cloud. Compared with the global market, Chinas hybrid cloud market is still in the early stage of development, and the proportion of enterprises adopting hybrid cloud is relatively low. However, the future development space is unlimited. At present, it has become the direction of domestic cloud computing manufacturers competing for layout.
For example, on the one hand, Alibaba cloud has its own private cloud products developed by apsarastack; on the other hand, it cooperates with VMware to provide hybrid cloud solutions; Huawei integrates public cloud and private cloud departments in 2020, unifies the technical route, and introduces a hybrid cloud solution with unified architecture; Huawei cloud stack is convinced to provide hybrid cloud solutions based on its own hosting cloud services; and Xinhua Third, cooperate with purple light cloud or third-party public cloud to provide hybrid cloud solutions.
Consistent with the hybrid cloud core proposition of unified architecture and unified experience proposed by Microsoft azure overseas, Qingyun technology has always adhered to the consistency of cloud products and cloud services. In 2015, it put forward the technical proposition of unified architecture hybrid cloud system and put it into practice.
As the first manufacturer in the industry to lay out hybrid cloud business, Qingyun technology, based on the self-developed integrated IT architecture of public cloud and private cloud, realizes the rapid deployment of hybrid cloud, provides customers with consistent use experience, breaks through multi cloud data islands, and reduces the difficulty of subsequent operation and maintenance management. At the same time, relying on sd-wan technology, it has formed a strong cloud network integration service capability to help customers achieve the goals of various services High speed interconnection of service nodes.
Qingyun technologys natural hybrid cloud unified technology architecture and natural consistency experience are very rare among domestic cloud computing companies. This advantage can enable them to seize the market opportunity of hybrid cloud when their competitors are not ready.
At the same time, because Qingyun technology has always maintained the anticipation and active investment in the future technology development direction, based on the established hybrid cloud unified technology architecture, it promotes the generalized hybrid cloud strategy, continues to develop edge computing and Internet of things technology, creates a digital platform covering the whole scene of cloud, network, edge and end, and establishes a larger range of unified architecture hybrid cloud infrastructure Structure.
At present, hybrid cloud still has several years window period in China. Qingyun technology, which has a good technical reserve in advance, also has a good customer reserve, which can transform a large number of private cloud customers and medium and large it scale Internet customers into potential hybrid cloud customers.
Therefore, Qingyun technology has a very big competitive advantage in the hybrid cloud, which will also drive the further explosion of its revenue and profits.
Opportunity 2: speed up localization substitution and continue to generate revenue
Different from other industries, the localization of IT infrastructure is systematic, which needs to be arranged in an all-round way in the enterprise IT architecture of the underlying chip, whole machine hardware, underlying software system and application software.
Among them, cloud computing platform plays an important role in improving the utilization rate of enterprise hardware resources, and it is also the operation foundation of operating system, database, middleware, application software and other upper software, and is the core component of enterprise IT architecture.
In the past decade, the virtualization technology that enterprise data center relies on has been monopolized by foreign manufacturer VMware. As cloud computing technology is a further upgrade of virtualization technology, Chinese enterprises have made outstanding achievements in cloud computing platform, which can completely replace virtualization technology.
However, it is worth noting that at present, most domestic manufacturers mainly carry out secondary development based on openstack and other open-source technology systems. For example, Huawei, Xinhua 3, Tencent cloud and other manufacturers cloud platform products are based on openstack, which can not fully realize the independent control of the core code, so it is impossible to carry out thorough localization substitution.
Qingyun technology adheres to the independent research and development of core code, and is one of the few domestic manufacturers that can directly and completely replace cloud computing platform.
Today, Qingyun technology has been able to directly replace foreign products such as VMware and azurestack with qingcloud enterprise cloud platform and qingcube super fusion system, and has been applied in enterprises in many head industries. At the same time, because of the independent preparation of all the core code, so as to ensure technical independence, information security and data privacy.
In the ecology of IT infrastructure, Qingyun technology has realized the compatible adaptation based on domestic processor and domestic operating system, and can complete the indirect substitution under the cooperation with other domestic manufacturers.
For example, Qingyun technology cloud platform has completed the compatible adaptation with domestic processors and related servers of Huawei Kunpeng, Zhongke Haiguang and LanChi technology, and compatible with the domestic operating systems of Kirin, Qilin Xinan and Tongxin UOS. Its qingstorneonsan distributed block storage and qingstor object storage are compatible with Huawei Kunpeng domestic processor and Inspur power series domestic server respectively; kubesphere container platform is compatible with Huawei Kunpeng domestic processor and related server operating system.
In the long run, the rivalry and competition between China and the United States in the field of science and technology will be the macro background of the trend. This means that it is imminent to rely more on domestic R & D and production in the future, and the process of full localization and substitution has begun. Among them, CPU, operating system, database and other basic software and hardware are the front battlefield that can be controlled independently, which is the foundation and guarantee of national network security.
As Qingyun technology realizes the localization substitution of similar products of foreign cloud manufacturers in the underlying software system, which can effectively reduce the dependence of domestic enterprises core IT systems on imports, and will become the main force of localization substitution in the future, which will also be a huge dividend for the growth of Qingyuns performance.
Overall, the long-term strategy of Qingyun technology is to position hybrid cloud. On the one hand, public cloud is regarded as an essential part of hybrid cloud solution to control cost and improve gross profit rate; on the other hand, it maintains high-speed growth of private cloud and stable gross profit rate, further improves its revenue share, so as to realize the profitability of the overall business. This strategy is not only based on Qingyun technologys independent research and development and leading technical strength, but also reflects its great ambition as a platform company, which can focus on the long-term, regardless of short-term interests. Through large-scale research and development investment at the bottom, we will lay out the forward-looking technology of cloud network edge integration in advance, so as to prepare for the coming era of 5g and Internet of things. Now, in the process of accelerating the localization substitution, Qingyun technologys performance will further explosive growth, or will become the brightest star in the science and technology innovation board. Source: editor in charge of mass news: Chen Tiqiang_ NB6485
Overall, the long-term strategy of Qingyun technology is to position hybrid cloud. On the one hand, public cloud is regarded as an essential part of hybrid cloud solution to control cost and improve gross profit rate; on the other hand, it maintains high-speed growth of private cloud and stable gross profit rate, further improves its revenue share, so as to realize the profitability of the overall business.
This strategy is not only based on Qingyun technologys independent research and development and leading technical strength, but also reflects its great ambition as a platform company, which can focus on the long-term, regardless of short-term interests. Through large-scale research and development investment at the bottom, we will lay out the forward-looking technology of cloud network edge integration in advance, so as to prepare for the coming era of 5g and Internet of things.
Now, in the process of accelerating the localization substitution, Qingyun technologys performance will further explosive growth, or will become the brightest star in the science and technology innovation board.