The "9.30" transformation is the third major organizational structure adjustment since Tencent was founded. The original seven business groups have been reorganized and integrated, and the new cloud and smart industry business groups, platform and content business groups have bee

On November 16, Tencent Holdings released its third quarter financial report for 2022. The deadline for this quarter's financial report data is exactly four years after September 30, 2018.

"9·30" transformation is the third major organizational structure adjustment since the establishment of Tencent . The original seven business groups (BGs) have been reorganized and integrated, and the new cloud and smart industry business group (CSIG), platform and content business group (PCG). The biggest highlight of

is that Tencent officially decided to take the first step from consumer Internet to industrial Internet, and cloud business will become the core engine.

In the third quarter report, Tencent said that financial technology and enterprise service (To B business) have become the first pillar of revenue, accounting for more than 30% of total revenue for six consecutive quarters. The business health continues to improve, and the "healthy and sustainable" strategy has achieved significant results.

Compared with the thriving financial report, it is Tencent’s major layoffs in March this year: Tencent is rumored to lay off 30% of its employees as a whole, and CSIG and PCG have become the “hardest hit areas” for layoffs, and CSIG has been jokingly called a “miserable chicken”, with the alleged layoffs as high as 20%.

At that time, Tencent gave the reason to "reduce costs and increase efficiency". Some businesses of CSIG (such as education) were severely affected by the epidemic, and some businesses also had high investment costs, making it difficult to see obvious output in the short term.

Half a year has passed. In this financial report, "reducing costs and increasing efficiency" is still the keyword. Tencent's enterprise service revenue fell year-on-year in the third quarter, which was explained as "continuously committed to reducing loss-making projects" and "focusing on self-developed products"; at the same time, gross profit increased significantly year-on-year compared with , and revenue costs decreased. The financial report said it was "reduced server and bandwidth costs and cloud project deployment costs."

and Alibaba latest financial report shows that after offsetting the impact of cross-segment transactions, the business revenue of Alibaba Cloud in the third quarter was 20.76 billion yuan, and increased 4% year-on-year; at the same time, it achieved profitability for two consecutive years, with adjusted EBITA ( profit before interest, taxes, depreciation and amortization) in a single quarter of 434 million yuan, setting a new high. In contrast, Tencent's statement on cloud business is much lower-key. Looking to the future, will Tencent’s cost reduction and efficiency enhancement strategy continue? Can the current shrinking To B business still grow in the future? In four years, CSIG's classmates have "graduated", and Tencent's To B business is not far from "graduating"?

"first source of income", has it beautified?

First, let’s look back at Tencent’s third-quarter financial report. Financial technology and enterprise services are the only growing business segment. At the same time, Tencent emphasized that it has become the “first source of income.” After all, communications, social and digital content businesses are facing the dilemma of traffic caps, online games are deeply affected by policies, and the overall online advertising industry is not good. It is not easy for financial technology and corporate services to grow against the trend.

However, the title of "first source of income" has not actually fallen steadily on To B's business. In the last four quarterly financial reports, the proportion of revenue from financial technology and enterprise services has basically stabilized at around 32%, and there is no big change. The "competitor" is the game business. Compared with the past year and a half, financial technology and enterprise services have surpassed games in the fourth quarter of 2021, and lagged behind in the next two quarters. It can be seen that the "throne" of To B business has not yet been firmly held.

Tencent once firmly took the lead in the gaming industry. Since March 2018, domestic online game version numbers have been intermittently suspended, and the total number of approvals has decreased for four consecutive years. The revenue of Tencent Games will no longer double and increase sharply.

In addition to the weak growth of the "second pillar", a large part of the To B business sector is financial technology, which is mainly composed of commercial payments. In general, it is WeChat payments. The commercial payment amount in the third quarter has double-digit year-on-year growth, which in turn drives the growth of financial technology revenue. The actual amount of the decline in revenue of the enterprise service business, which represents Tencent's transformation to the industrial Internet, has not been disclosed.After the "one increase and one decrease" bundled package, can the To B business, which once again become the "first pillar", really be held on Tencent's future?

competes in the cloud market, can Tencent win?

cloud computing market is becoming increasingly hot, and many companies hope to get a piece of the pie. This has also led to fierce changes in the domestic cloud computing market. The ranking of the top five clouds in China has actually changed many times in several years. The report "China Public Cloud Service Market (First Half of 2022) Tracking" released by

IDCh shows that the top five IaaS manufacturers' market shares are 34.5% (Ali Cloud), 11.6% ( Huawei Cloud ), 11.0% ( China Telecom Tianyi Cloud), 10.3% (Tencent Cloud), and 8.1% (AWS); the market shares of the top five IaaS+PaaS manufacturers are 33.5% (Ali Cloud), 11.1% (Huawei Cloud), 10.7% (Tencent Cloud), 9.4% (China Telecom Tianyi Cloud), and 9.0% (AWS).

Although Alibaba Cloud's market share has contracted compared with a few years ago, from the financial report, Alibaba Cloud's revenue structure tends to diversify, and non-Internet businesses have accounted for 58% of Alibaba Cloud's revenue, and achieved a 28% growth in the third quarter, mainly driven by the growth of the financial services, telecommunications and public services industries.

Huawei Cloud takes large government and enterprise customers as its main target customer group, has the unique advantages of hardware suppliers, and is also favored by large government and enterprise customers.

, Tencent Cloud's specialty lies in social + gaming. On the one hand, based on the C-end of the service, it has rich data analysis and data application products, and is proficient in business security and data security. At the same time, it has its own entertainment attributes to make it more obvious in the audio and video, live broadcast and other industries; on the other hand, Tencent has rich operational experience in the field of games, so Tencent Cloud performs relatively outstandingly in network, communication, and CDN acceleration, which can meet players' high requirements for low latency and high network speed.

Rather than saying that Tencent has completely transformed its B-end business after "9.30", it is better to say that Tencent is looking for a way out for the C-end business that is trapped in a bottleneck. "Being rooted in the consumer Internet and embracing the industrial Internet" extends along the existing business chain to similar industries, which is a simple and easy way.

For Tencent Cloud, it can not only cultivate the basic capabilities to support the original business, but also broaden the customer base, and even incorporate new customer base into the Tencent ecosystem to jointly build, share and symbiosis. As for the cross-bank field, there are WeChat , the largest traffic portal in China, as well as mature enterprise service products such as Tencent Meeting , Tencent Document , and Tencent Cloud's attractiveness is self-evident.

This is actually basically consistent with the customer selection logic of traditional B-side business, that is, it values ​​whether the practical experience is rich and the number of services. It is not difficult to imagine that the better the service providers can acquire more customers in the corresponding industry, and gain more service cases and experience, and provide better services. As the word-of-mouth effect repeats itself, invisible barriers are likely to appear.

Of course, barriers are not irrefutable.

"leader" Alibaba Cloud showed a stall trend after high growth. Since the beginning of this year, after offsetting the impact of cross-segment transactions, Alibaba Cloud's revenue in the three quarters was 18.971 billion yuan, 17.685 billion yuan and 20.757 billion yuan, respectively, with year-on-year growth rates of 12%, 10%, and 4%, respectively.

At the same time, the other side of the increase in the proportion of non-Internet industry customers is the loss of Alibaba Cloud's original position - revenue from Internet customers has decreased by 18% year-on-year, the main reason is that a leading Internet company gradually stopped using Alibaba's overseas cloud services.

According to outside speculation, ByteDance has terminated Tik Tok's transaction to store data on Alibaba Cloud due to the influence of the US government. In June last year, Byte launched the enterprise technology service platform " Volcano Engine ", which is regarded as a key step in officially entering cloud computing.

The market is changing, and the competitive landscape is still variable. It is still unknown whether Tencent Cloud, which is backed by Tencent , can usher in the opportunity to catch up.

from "virtual" to "real", is this step real?

For Tencent, the low-gross profit To B business is undoubtedly difficult and difficult to please. When the game version number "live water enters the pool", the "first source of income" will change hands soon. But Tencent will inevitably continue to carry the To B banner. Short-term cost reduction and efficiency increase will satisfy investors, and a sense of social responsibility will allow the company to alleviate policy pressure and truly "healthy and sustainable".

Another giant that embraces the industrial Internet, JD.com , also uses the "digital and intelligent supply chain" as the entry point, striving to create "the cloud that understands the industry the most". In early 2021, JD.com Group announced that it would integrate its cloud and AI business with JD.com Digital Technology, and officially established JD.com Technology . Recently, it has been reported that it turned its attention to the Hong Kong stock market after it suffered a setback on the listing of Science and Technology Innovation Board . The integration of cloud business into JD.com is essentially reducing obstacles to the listing of JD.com's financial business.

At Alibaba's latest earnings call, Zhang Yong also mentioned, "Whether from the public service field, to urban management, to the digital competition of various enterprises and industries, it reflects the future of the real economy towards digitalization. We insist on using cloud computing as a carrier to serve the real economy and the process of industrial digitalization."

, which originated from the consumer Internet, announced that four years have passed since the To B transformation. When the cloud computing market as a whole has fallen into a weak cycle, players want to find a way out from the industrial Internet. How long will it take for Tencent to find its own way?

Cloud computing is still an industry that requires long-term investment and long-term benefits, especially in cloud computing for industrial Internet. Under the competition of multiple players, cloud computing is not limited to the Internet infrastructure positioning of "water, electricity and gas". It also requires more exclusive service advantages to win the sincere recognition and unswervingness of customers. Can Tencent Cloud, which has the advantages of "social + gaming", migrate its advantages to the industrial Internet? Perhaps, Tencent Cloud will take some time.

This article is from Yiou.com