The cloud service market is facing a huge shock at the beginning of the year. On February 29th, a reporter from the Daily Economic News learned at the 2024 Alibaba Cloud Strategy Conference that Alibaba Cloud has lowered the official website prices of its cloud products across the board, with an average price reduction of over 20% and a maximum decrease of 55%. This is the largest price reduction in the history of Alibaba Cloud.
Liu Weiguang, Senior Vice President of Alibaba Cloud Intelligent Group and President of Public Cloud Business Unit, stated that this price reduction is a direct decrease in official website prices and is applicable to all customers. Compared to other price reductions in history, this price reduction is more inclusive.
Alibaba Cloud announced on its official website on the 29th that starting from March 1st, core product prices will be lowered across the board, with an average price reduction of over 20% and a maximum of 55%. The announcement said that Alibaba Cloud will cut down some public cloud products deployed in Chinese Mainland from now on (industry cloud is not included in this price adjustment):
Including specific specifications for ECS, RDS (MySQL, PostgreSQL, MariaDB), Redis Community Edition, MongoDB, and ClickHouse Community Compatible Edition, annual/multi-year official website discount prices, savings plans (ECS Computational Savings Plan for Mainland China, RDS MySQL Global Savings Plan), as well as official website discount prices for object storage service OSS, pay as you go, and reserved space; Increase the free quota for object storage OSS requests and expand the regular BGP free quota for cloud data transmission CDT products across all regions.
It is reported that this is the largest price reduction in the history of Alibaba Cloud, involving over 100 products and over 500 product specifications, covering all core products such as computing, storage, and databases. Among them, the maximum reduction in ECS for cloud servers is 36%, the maximum reduction in OSS for object storage is 55%, and the maximum reduction in RDS for cloud databases is 40%.
On April 26, 2023, Alibaba Cloud also announced a price reduction, lowering the prices of its core products by 15% to 50% across the board, with a maximum reduction of 50% for storage products. According to previous media reports, Alibaba Cloud's price reduction aims to further expand the user base and scale of public clouds, and enhance the market penetration rate of cloud computing.
In addition, in May 2023, Tencent Cloud also announced price reductions for multiple core cloud products, with some product lines experiencing a maximum reduction of 40%.
Photo by journalist Liu Xuemei
The recently disclosed financial report shows that Alibaba Cloud is continuously improving revenue quality by reducing project based contract revenue with lower profit margins. On February 7th, Alibaba released an unaudited performance announcement for the three months ending December 31, 2023. Among them, in Q4 2023, Alibaba Cloud's revenue was 28.066 billion yuan, a year-on-year increase of 3%; Adjusted EBITA profit was 2.364 billion yuan, a year-on-year increase of 86%.
The report "Tracking of China's Public Cloud Service Market (First Half of 2023)" shows that Alibaba Cloud, Huawei Cloud, China Telecom, Tencent Cloud, and AWS are among the top five in the IaaS market, with a total market share of 72.4% and a year-on-year decrease of 3.0% in market concentration; In terms of PaaS, Alibaba Cloud, Tencent Cloud, AWS, Huawei Cloud, and China Telecom rank in the top five, with a total market share of 66.9%.
Daily Economic News is comprehensive from Alibaba Cloud's official website, Zhongxin Jingwei, and Meijing App