Produced | Tiger Sniff Technology Group

Author | Zhang Xue

Cover | IC photo

On the evening of May 22, Alibaba Group released its fiscal year 2020 results. Alibaba Cloud ’s annual revenue exceeded 40 billion yuan, a 62% jump from the previous year ’s 24.7 billion revenue. Thanks to the good performance, Alibaba Cloud ’s valuation Rose to 77 billion US dollars.

From the perspective of revenue data, Alibaba Cloud has reached a new milestone, but it is regrettable that even if the financial report is so eye-catching, Alibaba Cloud has not broken the curse of loss.

In six years, it has grown 31 times, and its market value has exceeded two Baidus

The financial report shows that in the 2020 fiscal year (April 2019 to the end of March 2020), Alibaba Cloud’s revenue was 40.016 billion yuan. Comparing historical data, Alibaba disclosed cloud computing revenue for the first time in fiscal 2015. Alibaba Cloud’s revenue was 1.271 billion yuan that year, and its annual revenue is 40 billion yuan, an increase of 31 times in six years.

Among them, in the fourth quarter of fiscal year 2020, Alibaba Cloud’s revenue reached 12.2 billion yuan, a year-on-year increase of 58%, a substantial increase from the previous month, and its single-quarter revenue exceeded the ten billion mark for the second consecutive quarter. The financial report said that it mainly came from the public cloud and hybrid cloud revenue contribution.

In the latest assessment, Morgan Stanley raised Alibaba Cloud ’s valuation to US $ 77 billion, or about US $ 540 billion. This valuation is more than twice that of Baidu and ranks fourth among Internet companies listed in China.

The data shows that in fiscal year 2020In the first three fiscal quarters, Alibaba Cloud’s revenues were 7.787 billion yuan, 9.291 billion yuan, and 10.721 billion yuan, respectively, with a total revenue of 27.799 billion yuan. 62%.

On the other hand, with the increasing size and scale of Alibaba Cloud, industry competition is gradually intensifying, and the growth rate of Alibaba Cloud has slowed down.

Previously, among Alibaba ’s many businesses, cloud computing was one of the fastest growing. The year-on-year growth rate for the first three quarters of fiscal 2020 exceeded 60%, but this quarter was 58%.

According to the financial report, Alibaba Cloud ’s adjusted EBITA loss for fiscal year 2020 was RMB 1,414 million (US $ 199 million), and for fiscal year 2019 it was a loss of RMB 1,158 million. The corresponding adjusted EBITA profit margin improved from negative 5% in fiscal 2019 to negative 4% in fiscal 2020.

From the fourth quarter, Alibaba Cloud ’s losses have also narrowed further.

Alibaba said that investing in technology and investing in new infrastructure is Alibaba Cloud’s strategic focus. Through the investment of core basic technologies and cloud infrastructure, it will continue to expand its market leadership.

In April, Alibaba Cloud announced that it will invest another 200 billion yuan in three years, which will be used for research and development of major core technologies such as cloud operating systems, servers, chips, and networks, and the construction of future-oriented data centers. At present, Alibaba Cloud has deployed hundreds of cloud data centers in 21 regions around the world, and the scale of servers managed by Alibaba Cloud Feitian Operating System is one million. Another investment of 200 billion yuan will mean that the size of Alibaba Cloud’s data centers and servers will triple again.

There is still a big gap with Amazon and Microsoft

Aliyun’s leading position in China or in the entire Asia-Pacific region is already obvious.

Previously, market research company Gartner released the 2019 cloud computing market data in April, and Alibaba Cloud ranked first in Asia Pacific. The share rose to 28%, approaching the sum of Amazon and Microsoft. According to Canalys, Alibaba Cloud ranked first in China with a market share of 46.4%. Among the sub-sectors, Alibaba Cloud has a market share of over 50% in the retail and financial industries.

Although domestic head cloud computing vendors such as Tencent Cloud and Huawei Cloud are more or less encroaching on the Alibaba Cloud market, there is still a certain gap between the volume of these manufacturers and Alibaba Cloud.

In addition, in terms of global market share, Alibaba Cloud’s share has risen from 7.7% to 9.1%.

Previously, Amazon, Google and Microsoft also issued financial reports one after another. Overall, the gap between Alibaba Cloud and these three manufacturers is still relatively obvious.

In terms of specific data, Amazon ’s cloud computing platform AWS revenue for the quarter was 10.2 billion US dollars, a 33% increase from last year; operating profit was 3.08 billion US dollars, an increase of 38.3%. Amazon said that AWS ’annual revenue is expected to exceed US $ 40 billion. Its customers include Slack, Zoom, and mask maker 3M, which announced in February that it signed a contract with AWS.

In terms of Microsoft, Microsoft ’s intelligent cloud business segment generated revenue of US $ 12.28 billion in the first quarter, an increase of 27.2%. It is reported that with many companies turning to remote office work, sales of Microsoft’s cloud business Azure soared by 59%.

Microsoft CEO Satya Nadella said on the earnings conference call: “Promoted by our strong commercial cloud, we achieved double-digit total revenue and profit growth again this quarter. The new crown epidemic affected our work And all aspects of life, we saw the equivalent of two years in two monthsDigital transformation. “

At the same time, Google Cloud ’s revenue in the first three months of 2020 was US $ 2.8 billion, up from US $ 2.6 billion in the previous quarter, which was a slight increase.

In terms of global markets, the top three cloud computing vendors AWS, Azure, and Alibaba Cloud have all experienced a certain increase in revenue in the same quarter. Although Alibaba Cloud ’s growth momentum is the strongest, In terms of revenue scale, Alibaba Cloud’s annual revenue is far less than the scale of AWS and Azure in the first quarter.

So, in the long run, Alibaba Cloud still faces relatively big challenges in terms of profitability and revenue scale.

Previously, industry insiders had predicted that Alibaba Cloud will be profitable this quarter, but it has not come true. However, some industry observers told Tiger Sniff that, according to Alibaba Cloud’s current growth momentum, there is still hope to achieve profitability in the short term.