The Story Of "One Belt And One Road" Technology: Giant Hit The "Cloud" Southeast Asia Digital Economy Ten Years, Ten Times The Most Global Growth.

With the construction of "one belt and one road" entering a new stage, the digital economy with electricity supplier, mobile payment and sharing behavior represents flourishing along the line. As a combination of digital economic development and the "one belt and one way" initiative, the "digital silk road" is creating and supporting more opportunities.

President Xi Jinping put forward the first "one belt and one way" International Cooperation summit held in 2017, insisting on innovation driven development, and strengthening cooperation in frontiers such as digital economy, artificial intelligence, nanotechnology, quantum computers, and promoting the construction of big data, cloud computing and smart city, joining into the digital silk road in twenty-first Century. In 2019, the second "one belt and one way" International Cooperation Summit Forum, President Xi Jinping further stressed the need to deepen cooperation in frontier areas such as intelligent manufacturing and digital economy, and implement the strategy of innovation driven development.

Southeast Asia is one of the core areas of "one belt and one road". At present, although ASEAN has played an important role in the global economic map, compared with other major economies, its digital economic value still accounts for a relatively low proportion of GDP.

The 2019 report on Southeast Asian digital economy jointly released by Google, Temasek and Bain showed that in 2019, the proportion of GMV in Southeast Asia's economy accounted for 3.7% of GDP, although it had been greatly improved compared with 1.3% in 2015, but it still lagged behind the US's 2016 level of 6.5%.

On the other hand, the growth and potential of the digital economy in Southeast Asia in recent years has been obvious to all. In 2019, the scale of the digital economy in Southeast Asia exceeded 100 billion US dollars, and it is expected to break through 300 billion US dollars in 2025.

Cloud computing is an important component of the digital economy, and it is also the basic support for the development of digital economy. In the background that "up cloud" is gradually changing from one "choice" to "trend", the analysis institution Gartner predicts that the global public cloud market is expected to reach US $266 billion 400 million in 2020, increasing by 17% over the 2019 US $227 billion 800 million scale, and by 2022, the market will grow to 354 billion 600 million US dollars.

Specifically, to Southeast Asia, according to Adroit's previous forecast, the scale of Southeast Asian cloud services market is expected to reach 40 billion 320 million US dollars in 2025, and the composite annual growth rate (CAGR) between 2018 and 2025 will reach 12.3%. A report released in August 2019 by Cushman & Wakefield, an American real estate consultancy, points out that Southeast Asia will be the fastest growing data center market in the world in the next 5 years.

"For the cloud computing enterprises, although the current market size in Southeast Asia is small, it is developing rapidly." "This is definitely a huge incremental market," Pang Yan, director of the business school and Computer Science College of National University of Singapore and director of the business data analysis center, told the twenty-first Century economic report.

Multiple factors superimpose market growth

The series report on Southeast Asia's digital economy jointly released by Google and Temasek is considered to be an important reference for observing the trend of Southeast Asia in the digital economy. Its 2019 report shows that the scale of the digital economy in Southeast Asia is expected to exceed 300 billion US dollars in 2025. As a comparison, the figure was only $32 billion in 2015.

In addition to the rapid economic growth, the potential that Southeast Asia has not yet been fully excavated is also valued by many technology companies. For example, the young population structure, the growth of residents' income and the penetration of mobile devices usually indicate the growth of Internet usage, which is the foundation for the development of cloud services.

Wang Yude, general manager of Ali Singapore, told the twenty-first Century economic report reporter that the most characteristic opportunity in the market is that the population is large enough to support a huge market and is growing rapidly. He said that at present, the Internet coverage rate in Southeast Asia has reached 75%, 50% of the population is 15-35 years old, and the Internet time is more than 5 hours a day.

In fact, just more than 10 years ago, about 4/5 of Southeast Asia still had no internet access. Now Southeast Asian users are one of the most active groups in the Internet world.

Arizton is a research and consulting firm specializing in data center. Sayantoni Das, an analyst with the company's twenty-first Century economic report, points out that the main driving force of demand in Southeast Asia's cloud service sector is the advancement of the digital process of consumption and business environment, which is also driven by the growth of penetration of internetworking and social media.

Another driving factor is that Southeast Asian enterprises are moving their IT system from the local to the cloud. "This trend has increased significantly in the past 2 to 3 years." Sayantoni Das said, "Xiang Yun's migration is a process that will last for several years, which will bring sustained input to the data center."

Liu Jiahao, an analyst at Ji Bang consulting, told reporters on twenty-first Century economic report that the placement of data center is usually related to the development of regional economy. Before 2016, the construction of data center was concentrated in the Americas, 2016-2018 years in the Americas and Europe, and then in the Asia Pacific region after 2020.

Many respondents pointed out that the surge in demand for Cloud Computing in small and medium-sized enterprises is one of the main driving factors for the rapid development of cloud services in Southeast Asia. "Emerging high-tech start-ups in Southeast Asia are rapidly emerging," Pang Yan said. "Their IT systems are often based on cloud services, and this makes the whole market booming."

Southeast Asian governments have also played an important driving role in promoting and supporting cloud computing. Pang Yan believes that this includes extending the universal broadband infrastructure, including promoting the wide use of information and communication technology in all sectors, and training skilled information and communication technology workers.

Tencent cloud Elong Huang, general manager of Southeast Asian business, told the twenty-first Century economic news reporter that from the government level, the attention of Southeast Asian countries to cloud has been very high. For example, Singapore's digital identity cards, digital banking licences, and the digital banking licences that Malaysia is also preparing for. A group of Southeast Asian governments are paying attention to emerging industries and emerging forms, which need to be built on the basis of cloud computing. "From the perspective of the future, the government will pay more and more attention to the cloud."

In addition, the progress of infrastructure such as cable is also an important guarantee. Take Singapore as an example, as the convergence place of Southeast Asia's submarine cable, it has rich network coverage quality and cross domain network resources for neighboring countries. "We have observed about 10 Investments in submarine cable projects, which can connect the Southeast Asian and global networks." Sayantoni Das pointed out that "these projects will be put into use in 2020."

"Mobile priority"

At present, the number of Internet users in Southeast Asia has reached 360 million, of which 90% are mainly connected to the Internet through mobile phones. "From the perspective of industry development, Southeast Asia is now in the rapid outbreak of mobile Internet." Wang Yude said.

A report completed by We Are Social and Hootsuite shows that users of mobile Internet in Southeast Asia, including Thailand, Indonesia, Philippines and Malaysia, rank among the top ten in the world. Data from Strategy Analytics, an industry analyst, showed that from the third quarter of 2018 to the third quarter of 2019, the smartphone market in Southeast Asia accounted for 14.8% to 17.5% of the Asia Pacific market.

"The access to Internet and social media in Southeast Asia is mainly through smart phones, while in other areas, devices such as tablets and laptops usually play an important role." Strategy Analytics senior analyst Rajeev Nair told the twenty-first Century economic news reporter that Southeast Asia has always been a "mobile priority" area, and users have high demand for high quality networks and social media, and this trend is not expected to change.

Arizton also pointed out in the analysis that the development of Southeast Asian cloud services has benefited from the continuous improvement of broadband networks and the widespread deployment of 4G mobile networks in Southeast Asian countries in the past few years.

Southeast Asia's cloud market is also partly based on more opportunities in the future. For example, with the development and landing of a number of new technologies such as 5G and AI, the application scenarios of various 5G+ clouds, AI+ clouds or 5G+AI+ clouds will gradually emerge. "This will increase the demand for cloud services in the whole market." Pang Yan said, "it can be predicted that at least 3-5 years, the cloud service market will continue to develop at a high speed."

However, Rajeev Nair points out that 5G's deployment in Southeast Asia will be slower than other mature markets. In China, the United States, Japan and other places, the 5G boom will come in 2020, while in Southeast Asia, the larger acceptance of 5G will have to wait until the second half of 2021.

Liu Jiahao also said that although 5G and AI will revolve around the existing cloud business development, they are still in the rudiment, and it is difficult to compare the quantification on the numbers. At present, it has not had a solid connection with the growth of the Southeast Asian cloud service market. "This emerging land is still reflected in the development of cloud infrastructure."

Mobile technology in Southeast Asia has brought about the best opportunity for the development of the Internet economy. Meanwhile, it has put forward some unique requirements for cloud services. For example, there are more large file transfers on the PC side, and fewer mobile terminals. Elong Huang believes that the challenge to cloud lies in the need to ensure more stable network services from a technical perspective. "We need another form to serve the users, and there will be more requirements for the coverage and layout of the entire cloud infrastructure."

Giant beachhead

In recent years, Chinese manufacturers including Amazon (AWS), Microsoft (Azure), Google, IBM and other international manufacturers, as well as aliyun, Tencent cloud, UCloud and other Chinese manufacturers have increased their investment in Southeast Asia, and a battle of beachhead is being staged. Pang Yan also admitted in the interview that over the past 1-2 years, competition in the cloud service market in Southeast Asia has become increasingly fierce.

Sayantoni Das bluntly, competition will become more intense in the future. For example, Ali Yun opened the Indonesian area (Region) in 2018, and opened second usable areas (Availability zone) in the region in 2019. After that, Amazon and Google also chose to follow, and the Indonesian region will be opened in 2020.

From the market share of public cloud, according to Gartner data, Ali cloud reached 19.6% in Asia Pacific market share in 2018, ranking first in second consecutive years; Amazon and Microsoft ranked two or three in 11% and 8% respectively. It is worth mentioning that Ali cloud is the first international cloud manufacturer to set up data centers in Southeast Asia.

Wang Yude, general manager of Ali cloud Singapore, believes that although the international cloud computing companies are laying out, their eyes are more focused on the big five hundred companies such as the world's top 10 companies. In contrast, Ali cloud has the unique advantages of Chinese manufacturers. Southeast Asian countries, whether geographically or culturally, share much in common with China. In addition, with the development of Alibaba's maritime policy and business in Southeast Asia, Ali's understanding of the Southeast Asian market has also been accumulated to better understand the needs and pain points of Southeast Asian enterprises in the development process.

In recent years, electricity providers, Internet Finance and social entertainment have been developing rapidly in Southeast Asia. The landing of a series of products has also provided a broad market for providing cloud computing with underlying support. For example, Lazada, a well-known e-commerce platform in Southeast Asia, has introduced the video shopping technology of App to live and consumer interaction in Thailand for the first time by using Ali cloud's video technology.

The data provided by Ali cloud show that during the double 12 period in 2018, more than 2 million Thailand consumers watched the most popular live video broadcast on the Lazada platform, and 1 million 200 thousand points were awarded. The number of merchants participating in the live broadcast business increased 50 times. In addition, Indonesia electric business enterprise Tokopedia, Malaysia electricity supplier PrestoMall also chose to cooperate with ALI cloud in cloud business.

Tencent cloud has also worked with Shopee, a well-known e-commerce platform in Southeast Asia. "(we) have helped Shopee enhance its operational capability in recent years, including double 11 and double 12 activities, because of the support of cloud computing capability, and the whole business data has been well represented." Elong Huang said, "for example, in the past Shopee double 12 promotions, the platform sold 80 million items on the same day, and over 24 hours gained over 80 million browsing."

With the rapid growth of the digital economy, Southeast Asia has become the "blue ocean" in the eyes of entrepreneurs in the Internet field. While a large number of Chinese Internet companies expand their business to Southeast Asia, business models and technology output also inject vitality into the local digital economy. This has also created the unique advantages of Chinese cloud manufacturers in Southeast Asia.

Zhang Xiaoyu, senior architect of Tencent cloud international business, told the twenty-first Century economic news reporter that in assisting China's offshore enterprises, Tencent cloud mainly used Tencent's own technological advantages in the fields of literature creation, social networking and games, and the business environment of opening and cooperation, so as to help seafaring customers to cope with the difficulties of network, security and compliance among different countries in Southeast Asia.

"In fact, in the past year, cyber security attacks in Southeast Asia are frequent." For example, he said, "Tencent cloud's ability to clean and protect the game scenes helps the customers to go to sea, such as the dragon game, to ensure the smooth operation of their business in the promotion process. It also uses the Tencent cloud Singapore and Thailand available area as the core, and Indonesia and other regions to set up the accelerated nodes. It can reduce network jitter among Southeast Asian countries and enhance the user experience through a variety of network accelerated services."

In addition, on the basis of previous technology and mode output such as live broadcast and short video, Zhang Xiaoyu further pointed out that with the advance of 5G in China, more and more new applications will emerge. As an infrastructure, cloud computing technology will also be transformed and iterated, and will be applied to the Southeast Asian market at a faster pace than before.

However, many respondents also agree that the Southeast Asian cloud computing market is still an incremental market. "At a relatively fast growth stage, rather than competing with each other, it is better that everyone is training the market." Elong Huang concludes.

Challenges still exist from the point to the surface.

Singapore is undoubtedly an important data center in Southeast Asia and even in the world. According to Arizton data, according to investment, Singapore still occupied 60% of the data center market in Southeast Asia in 2019, followed by Indonesia, Malaysia and Thailand. Cushman & Wakefield data show that Singapore ranks third in the world competitiveness of data centers and Asia Pacific first, second only to Iceland and Norway.

Pang Yan, director of the business and computer school of National University of Singapore and director of the business big data analysis center, believes that the stability of Singapore's political environment, natural environment and social order is the main reason for Singapore's becoming the world's first class data center. In addition, Singapore's economic development is relatively high and its infrastructure is also perfect. For example, it has the most stable power supply in the world.

"Singapore's territory is small, but the government's good policies make it incomparable to the size of its body." Pang Yan said, "it depends on the whole Southeast Asia, and has a wide range of influence on regional commerce and wide influence." Thanks to this, Singapore has become one of the first choice of the Asia Pacific headquarters of multinational enterprises, which further facilitates the data center's cloud business to serve multinational enterprises.

Sayantoni Das also pointed out that Singapore is the most connected country in Southeast Asia, with a first-class business environment and high quality workforce, which drive the development of data centers. "This is a mature market, while other countries are still in the initial stage."

Now, things are changing. "In the past, the main cloud providers were providing support for the whole Southeast Asian region through Singapore's data center." Sayantoni Das points out, "however, as demand grows, the market is changing, and cloud manufacturers are starting to open available areas in other countries such as Indonesia." He further pointed out that with the improvement of network connectivity and additional government support, Southeast Asian countries are attracting foreign direct investment, which will further contribute to the development of data center markets in Indonesia, Thailand and Malaysia.

However, the Nuggets in Southeast Asia's cloud services market are not smooth. Compared with China, North America and Europe, the cloud giants need to face the imbalance between different countries in Southeast Asia, and the differences in policy, culture and language are also great. For example, as a highly developed and mature country, Singapore's cloud service market is also very mature, and the relevant policies and regulations are relatively perfect. The cloud market in Indonesia, Thailand and Malaysia is booming, while the infrastructure in Kampuchea and Burma is still relatively poor, and the cloud service market is basically not formed.

"When all the cloud service providers enter the Southeast Asian market, there are great differences in the market strategy adopted by each country." Pang Yan said that they could not use the same set of strategies or strategies to cover all Southeast Asian countries. Localization services and operations in various countries were very important.

The challenges of compliance are attracting more attention. Elong Huang points out that in addition to the large number of cultures and languages, the issue of compliance in Southeast Asia will also pose a very big challenge. In this regard, Tencent cloud strategy is relying on Singapore's relatively perfect regional policy, and gradually improving its core content, and then targeted to adapt to the local market. However, he also admitted that the challenges brought by digital compliance will increase gradually in the future.

In recent years, with the spread of the Universal Data Protection Ordinance (GDPR), many Southeast Asian countries have begun to create a local version of data protection law. The government of Thailand has passed the Personal Data Protection Act (PDPA), which will take effect in May 28, 2020. In addition, the Indonesian government is planning similar regulations.

"I believe that many cloud manufacturers, including ourselves, are stepping up their efforts to study compliance and continue to prepare for the corresponding upgrading." Elong Huang said, "in the next 1-2 years, the demand for local resources and local compliance will be strengthened by some changes in digital compliance, and we will take a number of measures to ensure compliance and stability."