Cloud computing, the basic strategy of Chinese enterprises, combined with mass data and redundant application scenarios in China, thrives Chinese enterprises' digital transformation, and even makes them take a lead globally and embrace the golden decade. Looking ahead, we are challenged by five great changes in the era: AI, information innovation, open source, post-Moore, and multi-cloud. Long-sighted CEOs, CIOs, and CTOs of enterprises are reviewing their cloud computing strategies. They break the strategic cooperation model focusing on a single cloud vendor, and build an open and converged cloud architecture that features hierarchical decoupling, collaboration of powerful components, combination of open source and business, equal importance to software and hardware, and multi-cloud resource sharing.
Great Change 1: AI Ushers in the Large Model Era, Appealing for Win-Win Collaboration of Algorithms, Data Infrastructure, and Computing Infrastructure
ChatGPT's debut makes AI step on a new development stage overnight. Global enterprises are embracing a new round of growth opportunities. AI in the large model era helps the enterprises further improve user experience and operation efficiency by developing revolutionary technologies. However, the leaders of global enterprises are inadvertently overwhelmed by anxiety, thinking about how to seize opportunities in this new round of competition.
The development of AI depends on three key factors: data, algorithms, and compute power. In the algorithm field, many foundation model vendors, such as iFLYTEK, Zidong.Taichu, and Beijing Academy of Artificial Intelligence (BAAI), stand out in China. Enterprises in various industries are creating their own industry-specific models based on the foundation model. There are also many computing infrastructure choices represented by Ascend. As for data infrastructure, Chinese data storage vendors, represented by Huawei, are facilitating enterprises manage mass data and implement high-performance data training and inference.
In the large model era, no cloud vendor can claim to have the optimal algorithm model, computing infrastructure, and data infrastructure at the same time. Chinese enterprise leaders need to tide over the previous strategic cooperation model targeted at a single cloud vendor. They shall uphold hierarchical decoupling, openness, and convergence, and join hands with algorithm model, computing infrastructure, and data infrastructure vendors to build AI competitiveness for enterprises in the large model era and stay ahead of the competition.
Great Change 2: Information Innovation Enters the Most Difficult Stage, and Only a Comprehensive Chinese IT Industry Ecosystem Can Rise Up to Great Power Competition
As we all know, this is an era of great power competition. Innovative IT technologies are being employed in the production business of Chinese enterprises. We not only need to master our own fate but also hope for Chinese enterprises to possess global-leading competitiveness. In today's digital and intelligent era, cutting-edge enterprises must excel in IT infrastructure.
Prominent IT technologies are never accomplished by a few people or vendors. Behind them are a crowd of talent who is constantly innovating and overturning in every segmented domain over the world. Thus, each segmented domain welcomes their own well-known unicorn and leader, such as Intel/NVIDIA/HPE in computing, Cisco in networking, EMC in storage, Microsoft/Linux in OSs, VMware in virtualization, Red Hat in containers, and Oracle in databases. Snowflake has become the popular product of public cloud data warehouses with a market value of $84.9 billion.
From this perspective, to build a world-leading IT infrastructure and boost the digitalization of Chinese enterprises, we must cultivate a diversified IT industry ecosystem in China and encourage talented innovators and leaders in every segmented domain, instead of placing Chinese IT hopes on a minority of cloud vendors.
Likewise, as information innovation enters the most difficult stage, Chinese enterprise leaders need to reconsider their strategy. They shall revise the strategic cooperation model oriented to a single cloud vendor, realize hierarchical decoupling, openness, and convergence, and reconsolidate with vendors in different IT segmented domains, building the corporate leadership in the era of great power competition.
Great Change 3: Open Source Becomes an Important Drive for IT, and the Combination of Open Source Self-Development and Business Cooperation Tops the Choice for Innovative Enterprises
Cloud native, big data, AI, and distributed databases are evolving into the next-generation platform as a service (PaaS) for enterprise digitalization and intelligentization. Different from VMware virtualization and Oracle databases, the next-generation PaaS platform is fueled by open source. Cloud-native Kubernetes, Hadoop/Spark/Hudi big data platforms, PyTorch/TensorFlow/MindSpore AI frameworks, and MySQL/PostgreSQL distributed databases – all of them have significantly contributed to enterprise IT development.
Thanks to the vigorous development of open source communities, enterprises with IT innovation capabilities are attempting to change the IT construction mode of enterprises and gradually construct a new IT architecture that combines open-source self-developed components and business cooperation with suppliers. This new IT construction mode is transforming the cloud computing strategy of enterprises. It breaks through the former strategic cooperation model related to a single cloud vendor, and promotes hierarchical decoupling, openness, and convergence. Enterprises are gradually equipping themselves with the self-construction and management capabilities of cloud computing, which lays a foundation for wider hierarchical decoupling of enterprise IT. Enterprises shall actively drive the hierarchical decoupling process and achieve the collaboration of various powerful components.
Due to the lack of stability, security, and usability of open source components, enterprises need to make great efforts to build a real commercial platform. Not all components are suitable for open source self-development. Enterprises need to carefully consider the balance between innovation and stability. In addition, most open source communities focus on software development and lack full understanding of hardware. Therefore, for infrastructure that contains hardware only or combines software and hardware, such as compute, network, and storage devices, enterprises are advised to cooperate with excellent suppliers, laying a solid foundation for data centers.
Great Change 4: In the Post-Moore Era, Cloud Is Undergoing Systematic and Innovative Evolution from Software Server to Equal Consideration on Software Hardware
The Moore's law, that CPU performance doubles every 18 months, has failed. In the past few decades, the CPU-centric IT stack is embracing an unprecedented reconstruction. An AI ecosystem represented by NVIDIA is being built with GPUs, while network and data storage is being built with DPUs, and the Compute Express Link (CXL) bus ecosystem is centered on data rather than CPUs. The most important design principle is the systematic and architectural innovation that combines software and hardware to eliminate the system bottleneck caused by the sluggish growth of hardware performance.
The post-Moore era will have a far-reaching effect on enterprises' cloud computing strategies. Visionary enterprise leaders need to systematically think about how to adjust their cloud computing strategies.
On the one hand, in the past decade, the public cloud's software standard server architecture has profoundly influenced enterprises' cloud computing strategies. In the next decade, enterprise leaders will shift from an architecture that decouples software and standard servers to an innovative architecture that combines software and hardware based on cloud services. Actually, public cloud vendors, represented by Amazon, Microsoft, and Alibaba Cloud, has started to develop chips and hardware, and deeply integrate network, storage, and database services with hardware. The cloud computing architecture of enterprises will also have a profound impact on the cloud computing construction mode of enterprises in the future. The thing we need to rethink is the decoupling procurement that prevents vendor lock-in, and transformation from decoupling between cloud software and standard servers to decoupling among compute, storage, network, database, big data, and AI components.
On the other hand, in the next decade, we will embrace the IT stack reconstruction in the post-Moore era. A new round of innovation and disruption will inevitably be bound to emerge in each IT segmented domain. Similarly, it is impossible for us to expect IT reconstruction on several cloud vendors. Enterprises' IT evolution also needs to be based on win-win cooperation between vendors. The cloud computing strategies of enterprises will break the past strategic cooperation model centered on a single cloud vendor, implement hierarchical decoupling, openness, and convergence, and build enterprises' leadership in the post-Moore era through win-win cooperation between vendors in different IT segmented domains.
Great Change 5: Multi-Cloud Becomes the New Normal of Enterprise IT, and Multi-Cloud Application Deployment and Centralized Resource Sharing Form the Optimal Architecture
Statistics show that 89 percent of enterprises are adopting the multi-cloud strategy. One aspect of the multi-cloud strategy is the combination of private and public clouds. The auto scaling (AS) public cloud service is suitable for enterprises' innovative and uncertain services, while an enterprise's data center is more suitable to store the enterprise's core data. In addition, to build unique digital competitiveness, enterprises need to build their own flexible IT infrastructure instead of using standard public cloud services. Another and more important aspect of the multi-cloud strategy is the combination of multiple private clouds. No cloud vendor is optimal in each cloud service in the industry. Enterprises need to make up for their weaknesses and integrate the service advantages of each cloud vendor.
Multi-cloud has become the new normal of enterprise IT and brings new challenges to enterprises. In the past, we were used to construct cloud platforms in full-stack mode. In the multi-cloud era, multiple cloud silos were formed, which could not effectively share resources.
As enterprises develop from rapid growth to stable growth, enterprise leaders require refined IT investment to improve resource utilization. Therefore, enterprises outside China are the first to adopt the multi-cloud architecture that features multi-cloud application deployment and centralized resource sharing, maximizing resource utilization and implementing data sharing.
We believe that Chinese enterprise leaders will also adjust the full-stack cloud construction mode, separately construct infrastructure resources such as compute, storage, and network resources in a centralized manner, and construct the optimal multi-cloud architecture for multi-cloud application deployment and centralized resource sharing. This will support the fastest digital transformation of enterprises with the minimum resource investment.
Focusing on the long-term development of enterprises, all parties in the industry work together to build an open and converged enterprise cloud computing strategy.
As the foundation of Chinese enterprises' digitalization, cloud computing has supported the rapid development of Chinese enterprises' digital transformation in the golden decade. Looking into the future, we are facing five great changes in the era: AI, information innovation, open source, post-Moore, and multi-cloud. Breaking the traditional strategic cooperation model with a single cloud vendor, new cloud computing strategies will be achieved for Chinese enterprises in the next decade, aiming to build an open and converged cloud architecture that features hierarchical decoupling, collaboration of powerful components, combination of open source and business, equal importance to software and hardware, and multi-cloud resource sharing.
Strategic transformation is not easy. Enterprises and industry players need to focus on the long-term development of enterprises and work together to build a new cloud computing industry ecosystem and standards, laying a solid foundation for Chinese enterprises to lead the world in the next decade.
