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Part 2 - Why Cloud Service is Important to Tencent’s Overseas Market?

By ESC Editorial Team, over 6 years ago Business

Part 2 - Why Cloud Service is Important to Tencent’s Overseas Market?

What can help Tencent Cloud to gain customers in the overseas market as a Chinese company?

From the point of view of Pony Ma, Tencent Cloud must operate an open sharing economy, which is the key point that was explicitly mentioned when he talked about Tencent Cloud for the first time. No company is capable of doing everything, even giants such as Baidu, Alibaba and Tencent, but if every company can bring everyone’s productivity to the cloud, and share it with those who need it, they can build an ecological system through the cooperation of upstream and downstream industries.

As a result, Tencent Cloud came up with the opening up and overseas expansion strategies that are indispensable.

Tencent Cloud already has a large group of customers and a big database due to its expansive business system, even if it is not open. But apart from serving its own businesses Tencent Cloud still has a problem opening its accumulated technical capacity for participation and understanding of users in non-Tencent ecosystem companies.

In 2010, Tencent Cloud was completely open to the outside world. In 2013, most of the market share was in the game cloud, and the video cloud was in the first place in the industry. But why should companies that go into the overseas market choose the Tencent Cloud?

In response, Zeng Jiaxin, vice president of Tencent Cloud, said that the increase in Tencent Cloud’s overseas business stemmed mainly from industries such as the Internet, games, finance and video. The main clients they looked after were domestic companies with foreign demand, overseas Chinese companies and foreign companies developing their global business.

Whether domestic companies or local foreign customers, what they were most interested in when choosing the Tencent Cloud was service responsiveness speed, node layout, security strength, cross-domain network and other common resources and technical strengths.

Tencent Cloud has attracted a number of leading gaming companies including Tourists Network and Oasis Games, as well as live video platforms such as Cheetah, Quick Hand, Live TV and so on in overseas business. It has also garnered reputable overseas companies such as Garena, Aiming, Supercell and Workpoint.

"Take the gaming industry as an example. You are doing great in this field and you have a good understanding of the needs of such companies. That’s why they choose you. We use virtual project teams to internally bring together Tencent Games, TEG and Tencent Cloud colleagues, to form a project team that connects the entire game cloud industry, and develops a product that will be available to the outside world at the same time based on the capacity of the platform," said Zeng Jiaxin.

Tencent Cloud also strives to attract business customers through real-time service capabilities. In all data centres overseas, technicians work 7 × 24 hours, regardless of public holidays. For example, the centre in Singapore is equipped with a 4 +1 mode, while in Hong Kong, data centres serving large business are being equipped with more people, enabling them to respond in a timely manner and solve problems.

According to Zeng, there are many things that can be amassed by simply throwing money and resources at it and will quickly add value, but in the end, the B2B cloud service will test whether you have an integrated service capability including the cloud itself, and the environmental value of service capabilities.

Zeng Jiaxin also said it was like going to see a doctor. You prefer an old and experienced doctor and are anxious about seeing a young one. When it comes to the cloud services, technically, we essentially have very little differences in technology, but experience has played a crucial role.

Cloud service revenue will exceed one billion over the next three years

If you look closely, you will find that since the first mention of Tencent Cloud in 2015, the cloud business has been repeatedly highlighted in Tencent's earnings report. Tencent's fourth-quarter earnings report released in March, 2017 also showed that revenues from Tencent's other businesses increased 289% year-on-year. The growth was mainly driven by the increase in Tencent's payment-related services and cloud service revenues.

According to Zeng Jia Xin, Tencent Cloud’s business revenue tripled in 2016 year-on-year. “Our goal for this year is double growth, and we expect sales to exceed billion in the next three years, which puts a lot of pressure on us. My boss not only provides money but also gives me the needed manpower and resources. So I have to campaign for it myself, I have to win this battle."

Winning this battle does not mean defeating the mighty rival Alibaba Cloud, but securing Tencent Cloud’s position in the first premier league. There is no doubt that Alibaba Cloud has a higher market share in China, but the rapid expansion of Tencent Cloud will surely give it a headache.

While in overseas markets, both Tencent Cloud and Alibaba Cloud are at the same starting line, but who will run faster?

Read Part 1 - Why Cloud Service is Important to Tencent's Overseas Market to get the background information about its development.