The biggest price reduction in Alibaba Cloud's history has arrived!
On February 29th, Alibaba Cloud 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%. After this price reduction, the prices of Alibaba Cloud's core products have broken through the lowest prices on the entire network.
It is understood that this is the largest price reduction in Alibaba Cloud's history, involving over 100 products and over 500 product specifications. Millions of new and old customers can directly benefit from this price reduction. Among them, cloud server ECS has a maximum reduction of 36%, object storage OSS has a maximum reduction of 55%, and cloud database RDS has a maximum reduction of 40%, all of which are the most frequently used core products by cloud users.
"In the future, the cloud will definitely be the first choice for enterprises and developers, and technological innovation will give priority to being born in the cloud." Liu Weiguang, Senior Vice President of Alibaba Cloud Intelligence Group and President of Public Cloud Business Unit, said that as China's largest cloud computing company, Alibaba Cloud hopes to use advanced public cloud services for more enterprises through this large-scale price reduction, accelerate the popularization and development of cloud computing in various industries in China.
100 products with a comprehensive price reduction of over 20%
Clarify& Quota; After three months of prioritizing public cloud strategy driven by AI, Alibaba Cloud has issued a heavyweight signal to the market, announcing the largest price reduction in history: the official website prices of over 100 products and over 500 product specifications have decreased by an average of 20%, with a maximum decrease of 55%. The new prices will take effect immediately.
For example, taking the most popular cloud server U1 product among small and medium-sized enterprises as an example, purchasing the five-year version with 2C4G configuration costs 768 yuan/year, but after the price reduction, it only costs 485 yuan/year, a 36% reduction in price; Object storage OSS standard storage - Local redundancy has decreased from 0.12/GB/month to 0.09/GB/month, a decrease of 25%.
In terms of databases, taking the RDS MySQL basic series as an example, purchasing the five-year version with a 1c2g universal configuration costs 936 yuan/year, but after the price reduction, it only costs 562 yuan/year, a 40% reduction. Alibaba Cloud has also increased the monthly free public network traffic limit for cloud data transmission CDT from 10GB to 20GB.
Alibaba Cloud has also launched corresponding preferential policies for old customers who have previously received annual packages. Customers can renew their subscription within 3 months after the price reduction announcement, and any unused annual package hours can be re charged at the new price. For example, a certain enterprise previously purchased a cloud server worth 100000 yuan for a year, but it has only been used for 6 months. As long as the customer renews it for another year, the previously unused 50000 yuan cloud resources can be re charged at the new price (20% reduction), and the difference can be used to offset the renewal order, which means paying 10000 yuan less.
In addition, Alibaba Cloud has fully upgraded its "99 Plan" and launched entry-level cloud servers priced at 99 yuan/year and 199 yuan/year for individual developers and small and medium-sized enterprises.
"Not a short-term market competition behavior"
In fact, in April last year, Alibaba Cloud announced a large-scale price reduction at the 2023 Alibaba Cloud Partner Conference, with core product prices lowered by 15% to 50% across the board, and storage products experiencing a maximum reduction of 50%. And this time, Alibaba Cloud's price reduction efforts far exceed the price reduction actions taken in the first half of last year.
In this round of price reduction actions, almost all products have broken through the lowest prices on the entire network, and the range of discounted products directly covers millions of enterprises and developers.
A Chinese journalist from a securities firm learned that compared to other dividend releases in history, this price reduction has three advantages: "two most, one for the first time". It has the largest range of participating products in history, the widest beneficiary group, and is also the first time that it has given interest to the unfulfilled portion of existing customer orders.
Liu Weiguang, Senior Vice President of Alibaba Cloud Intelligence Group and President of Public Cloud Business Unit, stated that Alibaba Cloud's price reduction is not a short-term market competition behavior, but a long-term strategic choice, which is determined by the business model of public cloud. "Cloud computing is a business model with network and scale effects."
Liu Weiguang pointed out to a Chinese journalist from a securities firm that as the largest cloud service provider in Asia, Alibaba Cloud provides millions of customers with a reusable global cloud computing network and resource pool. The more customers it uses, the lower the supply chain procurement costs, evenly distributed research and development costs, and idle resource costs can be continuously reduced. Therefore, the more customers and larger the scale using Alibaba Cloud, the cheaper the price of the cloud will be; As the scale continues to expand, the dividends of technology will continue to be released to give back to customers.
What is the value of public cloud?
According to Liu Weiguang, when enterprises use a public cloud architecture, scheduling efficiency is higher. "The vast majority of customers' business scenarios have fluctuations in business volume."
He further stated that the resilience provided by cloud computing allows customers to adopt a combination of normalization and resilience to meet resource demands at different time periods, achieving a significant decrease in average resource holdings. "The value of public clouds lies in achieving better business operations with less resource consumption."
From a practical perspective, China's cloud computing has developed for over a decade, but the penetration rate of public clouds is still significantly lower than that of mature markets in Europe and America. It is understood that the stock size of servers in the Chinese market is 20 million units, while the stock size of servers in the United States is about 21 million units. However, the proportion of computing power provided by public clouds in the United States is 60%, while in China it is only 28%.
On the other hand, public cloud is the best partner for AI, and enterprises can quickly mobilize massive training and reasoning resources through the use of public cloud, achieving low-cost AI innovation. By using cloud computing, enterprises can also enable IT talents to focus more on business development and innovation.
The increase in penetration rate of the public cloud market is conducive to the overall improvement of computing power efficiency and reduction of energy consumption in China. Data shows that the average resource utilization rate of a large number of self built IDCs in China is less than 5%, while public cloud vendors such as AWS, Google, and Alibaba Cloud can achieve a data center resource utilization efficiency of 25% -40%.
Industry insiders say that improving data center utilization not only avoids hardware resource waste, but also reduces computing power consumption. According to statistics, if the utilization rate of data center computing power is increased from 5% to 25%, China can save 80 billion kilowatt hours of electricity annually.
Return to long-term strategic investment
On the evening of February 7th this year, Alibaba Group announced its performance for the third quarter of the 2024 fiscal year and announced an increase of $25 billion (approximately RMB 180 billion) in its share repurchase plan.
At that time, financial reports showed that Alibaba Cloud Intelligent Group focused on the "AI driven, public cloud priority" strategy, continuously improving revenue quality by reducing project-based contract revenue with lower profit margins. In the quarter, this strategy achieved positive results, with healthy growth in revenue from public cloud products and services, driving profitability improvement. After adjustment, EBITA increased by 86% year-on-year and reached a new high for the fiscal year.
"Under strategic focus, we have achieved a robust quarter. The group's top priority is to reignite growth momentum in its two core businesses, e-commerce and cloud computing," said Wu Yongming, CEO of Alibaba Group, on the day of the financial report release.
In November last year, Alibaba Group's financial report revealed that Alibaba will resolutely increase its continuous strategic investment in Alibaba Cloud, ensuring that Alibaba Cloud focuses on the development strategy of "AI+cloud computing" and creates a technologically advanced cloud computing service in the AI era.
Alibaba has previously stated that in the era of AI, Alibaba Cloud requires more long-term strategic investment than ever before. Alibaba will resolutely increase its investment in Alibaba Cloud, allowing it to focus on the development strategy of "AI+cloud computing" and minimize the adverse impact of uncertainty on future development.
The dual wheel drive of "AI+cloud computing" is the underlying capability of Alibaba Cloud to face the future and support AI infrastructure services. "In the era of AI, Alibaba aims to become an open technology platform enterprise that serves AI innovation throughout society," said Wu Yongming, CEO and director of Alibaba Group earlier.