Text: Yang Jianyong.
With the advent of the cloud computing era, various vendors are actively moving towards the transformation of cloud services, and various enterprise management software is delivered in the form of SaaS. Among them, applications based on Microsoft cloud services are ubiquitous and have become one of the classic cases of transformation in global business history. It can be said that Microsoft is the most representative vendor for cloud transformation, subverting the previous business model of selling operating systems and software as the core, and then betting on cloud computing and artificial intelligence.
As a result, the old tech giant has achieved self-transformation and cultural reshaping, and has weathered the mid-life crisis with the help of cloud and artificial intelligence, not only showing strong revenue and profit growth, but also increasing the market share of cloud services, and has been slowly narrowing the gap with Amazon. At the same time, due to the active transformation of cloud and AI, the former enterprise management software company has transformed into a platform-based enterprise, and once again stands on top of the world, with a market value of more than 3 trillion US dollars.
It is worth noting that Yonyou, as one of the representative manufacturers of enterprise software in China, has been actively transforming in recent years, but it is facing challenges and falling into an embarrassing situation of increasing revenue but not competing for profits.
According to the performance forecast, Yonyou expects revenue of 97 in 20232.5 billion to 98200 million yuan, a year-on-year increase of 5% to 6%, and an estimated loss of 8800 million to 9800 million yuan, and a profit of 2 in 20221.9 billion yuan, which is the largest loss since listing.
2023 is the year Yonyou has launched the largest business organization model upgrade in the company's history. Specifically, the business of large enterprise customers has been upgraded from the original region-based organizational model to an industry-oriented organizational model; Medium-sized enterprise customer business continues to be unified on a regional but national basis.
1. Vertical organization and development. It is pointed out that the transformation of the business organization model will have a great impact on the business and performance of large enterprise customers in 2023, especially in the first half of 2023.
In the first half of 2023, Yonyou's revenue decreased by 47%, and revenue in the second half of the year increased by 11% year-on-year to 127%, with a final year-on-year increase of 5% to 6%. In the performance forecast, it is stated that the business revenue growth of medium-sized and small and micro enterprise customers in 2023 is good, but the business income performance of large enterprise customers, which accounts for the highest proportion of operating income and is most affected by the upgrading of business organization model, is far from the annual business target, which has a greater impact on the overall revenue growth rate.
At the same time, costs and expenses are growing rapidly. In 2021 and 2022, in order to seize the strategic opportunities of digital intelligence, localization and globalization of enterprises, Yonyou increased strategic investment, with a net increase of 7,301 employees. In terms of R&D, we have increased R&D technicians on a large scale and strengthened the research and development of a new generation of products-UFIDA BIP; In terms of market expansion and sales, we have increased the number of business-side consultants and sales personnel to expand marketing efforts. At the end of the reporting period, the number of employees remained basically stable compared with the end of 2022, but the average annual number of employees increased by 1,896 compared with 2022, resulting in a large year-on-year increase in wages and salaries.
Due to the upgrading of the business organization model of large enterprise customers, the business department of industry customers has quickly and massively broken through industry customers, and the travel expenses and market expenses incurred in covering the national market have also increased a lot.
Among the various expenses, the financial report for the first half of 2023 shows that the increase in sales expenses is particularly obvious, while the business promotion expenses and travel and transportation expenses have increased exponentially, showing that Yonyou Network has promoted the upgrading of the business organization of large enterprise customers with industrialization as the core and the business organization of medium-sized enterprise customers with vertical operation based on regions, resulting in a significant increase in sales-related expenditures. Among them, the business promotion fee doubled year-on-year to 1300 million yuan; Travel and transportation expenses increased by 176% year-on-year to 67.37 million yuan.
It should be pointed out that with the transformation of the business organization model upgrade basically completed in the first half of the year, the Yonyou network business has been running smoothly according to the new organizational model and has entered a good growth track.
On the basis of the upgrading of the business organization model, we gave full play to the product power of BIP3 to seize the market of enterprise digital intelligence and information innovation, and the annual contract signing amount increased by more than 17% year-on-year, of which the contract amount increased by more than 26% year-on-year in the second half of the year, and the contract value of more than 10 million yuan increased by more than 70% year-on-year.
Finally, as global digitalization continues to advance, spending on cloud infrastructure services is increasing. Among them, Gartner earlier**, the global cloud service market size will reach nearly $600 billion in 2023. It is worth noting that in the global cloud computing market, Amazon, Microsoft, Google and Alibaba Cloud are undoubtedly the biggest winners.
Thanks to the generative AI outlet, it is reshaping all walks of life and creating huge business value, and enterprises will accelerate their upgrade to intelligence. It shows that generative AI has stepped onto the stage of the times, which indicates that it will further promote the development of the cloud computing industry. Among them, Microsoft uses ChatGPT to improve products and services and greatly improve productivity, which is the driving force for the strong growth of Microsoft's cloud services.
In the face of the era of large models, Yonyou Network released the enterprise service model Yongpt on July 27, 2023, as well as the rich data services and intelligent services provided by the integration of large model capabilities, driving enterprises to enter the era of AI popularization and application, and enabling enterprises to comprehensively innovate digital and intelligent business.
Overall, the wave of generative AI has swept the world, whether it is in customer experience, efficiency improvement, rapid decision-making, and creative innovation. As a result, companies around the cloud ecosystem will benefit from faster digital transformation and innovation, while their cloud services segment will grow further.
The above personal views are for reference only.
Yang Jianyong is a Forbes China contributor who provides insights into cutting-edge technologies such as the Internet of Things, cloud services, artificial intelligence, and smart homes.