Competition in the cloud industry is heating up. On China’s Monday, Alibaba announced a $28.2 billion USD (200 billion RMB) investment in Alibaba Cloud over the next three years. On America’s Monday, IBM did its first earnings call with new CEO, Arvind Krishna, who emphasized revenue growth and hybrid cloud customers as the two major metrics to measure the company on in the next few years, a notable shift in priorities from the emphasis on earnings per share under his predecessor, Ginni Rometty.
Both companies are fighting for the third place in the massive and growing global cloud market, which is currently (and tenuously) held by Google’s GCP. And both companies have a chance to do so but in markedly different ways.
Buy vs Build
Alibaba has chosen the road of build. It has always been that way, similar to Amazon’s approach to AWS. This latest investment is an expansion of the initial 10 billion RMB (~$146 million USD) over 10 years investment that jump-started Alibaba Cloud back in 2009, a very risky bet at the time. To put this new investment in context, IBM’s headline-grabbing acquisition of Red Hat was $34 billion USD, a 63% premium of what Red Hat was worth back then (close to $21 billion USD). Note: this $21 billion was public market valuation, not cold-hard cash. And if the IBM-Red Hat acquisition was to happen today, Red Hat would likely be valued less simply due to the COVID-19-induced economic conditions and IBM would probably pay less. This hypothetical underscores just how significant is Alibaba’s new investment; the same money could have probably bought Red Hat today with change to spare.
Clearly, IBM has chosen the road of buy -- a more common approach used by its competitors. Microsoft bought GitHub. Google bought Looker. VMWare bought Pivotal and Carbon Black. And these are just the deals worth more than $1 billion USD. Plenty of small deals and acqui-hires occurred over the last few years as well. All these acquisitions are intended, in one way or another, to boost cloud platform usage in its most basic form: compute and storage. For the most part, all the major cloud platforms are still in “land grab” mode.
Buying companies is typically a quick fix to boosting earnings, but the long-term impact on growth is anybody’s guess. IBM acquired Red Hat for its long-term growth potential and technical competitiveness, especially in container orchestration which has been standardizing on Kubernetes, an open-source container orchestration technology first developed by Google. In fact, the terms “containers”, “Kubernetes”, and “OpenShift”, which is Red Hat’s managed Kubernetes platform, are emphasized in many places in IBM’s most recent Q1 2020 earnings call.
The race between Alibaba and IBM comes down to how fast Red Hat integrates with IBM (or IBM with Red Hat) versus how strategically and efficiently Alibaba can spend its new investment.
And that speed and efficiency is determined by culture.
Macro-Culture vs. Micro-Culture
By “macro-culture,” I mean the macro business environment external to the company. By “micro-culture,” I mean the specific company internal cultures. Alibaba and IBM have strengths and weaknesses along both dimensions.
For Alibaba, “micro-culture” is its advantage. It’s famous for having a tightly-knit, somewhat quirky company culture. Some would call it a big happy family, others would call it a cult. (For example, when Jack Ma was still CEO, he would officiate a special Alibaba-style wedding ceremony for selected employees and their new spouses who got married that year. Happy family or cult? You be the judge.)
This strong internal culture is likely a key driver behind why Alibaba has been opting to build versus buy when it comes to cloud. Building a cloud business is technologically difficult, immensely expensive up-front, and requires more patience than consumer-driven businesses. Having an idiosyncratic company culture also means if you acquire other sizable companies, integrating personnel would be difficult. Adding up all that, doubling down on its strong “micro-culture” with a sizable investment to boot is Alibaba playing to its strength.
The “macro-culture” environment is the opposite story. Alibaba is in a tough global business environment and has been for quite some time. When Trump was first elected president in early 2017, Alibaba made a high-profile overture to create one million American jobs. That promise has since been withdrawn when the bilateral trade war was heating up in 2018. Alibaba Cloud’s expansion plan into the U.S. was also halted in 2018, after spending more than three years and millions of dollars in building two data centers and a full-service American team.
This almost civilizational-level cultural clash between China and the U.S.-led West is only intensifying during this coronavirus pandemic, with both Trump and Biden airing political ads labeling the other person as more cozy with the Chinese government. Election Day is still more than six months away, and the anti-China rhetoric will only grow by then. Stuck and shut out of America, the most lucrative cloud market, are Chinese companies like Alibaba, which need both creativity and patience to achieve growth elsewhere (more on that below).
For IBM, “micro-culture” is its weakness. There is nothing noteworthy to my knowledge that distinguishes IBM’s culture in any way; the lackluster financial performance over the last decade plus probably didn’t help. Contrasting IBM’s blandness with Red Hat, which does have a strong, cohesive culture centered around its purist commitment to open source, and you have a mini-cultural clash waiting to burst. Red Hat’s culture is well-known in the tech community and, some argue, singularly unique and not replicable.
If you are a business management geek, like me, watching the impending integration between Red Hat and IBM is as good as the next hot TV series on Netflix. Since it’s only been less than three quarters from when this acquisition officially closed, it’s too early to tell whether things are going well or not. But with Alibaba’s investment, and the other bigger cloud vendors all growing aggressively, this integration will have to show meaningful progress soon.
IBM would argue it already has, by playing into its “macro-culture” advantage as a trust-worthy brand in enterprise technology products and services, with a long track record of having big companies and governments as customers. In its Q1 2020 earnings call, IBM SVP & CFO Jim Kavanaugh said:
Red Hat signed the two largest deals in its history, leveraging IBM’s deep client relationships. This is a great proof point of the value of IBM and Red Hat together.
While I have no inside knowledge of what these two large deals are and how they materialized, this sounds more or less like a business partnership referral to me; something that happens routinely when two companies in partnership bring each other in on deals to satisfy the customer. We will need more than just evidence of referrals to evaluate whether the most expensive acquisition in IBM’s 100-plus-year history was worth it. I do think both IBM’s and Red Hat’s solid reputation with enterprise customers is a “macro-culture” strength. But they need to forge a new “micro-culture” together to take advantage of it, soon.
Where To Grow?
The question of growth is markedly different for Alibaba and IBM, just like the culture question. For Alibaba, it’s a geographical question. For IBM, it’s a product question.
Alibaba Cloud’s presence will likely expand into Latin America and Southeast and South Asia, while doubling down on its lead in China and avoiding the U.S. market in the foreseeable future.
Latin America is intriguing, because it’s a relatively blank slate; all the other major cloud platforms have only one region currently online in Latin America, while Alibaba has none. According to industry research firm IDC, Latin America’s overall cloud market is also projected to grow 38.3% CAGR between 2018-2023, albeit from a small base. Alibaba and other Chinese tech companies, like ridesharing platform Didi Chuxing, have also made inroads in that continent’s various markets with other consumer businesses, so the local political and cultural resistance may not be as strong as in the U.S. Southeast and South Asia are natural extensions of Alibaba, because the region has a booming Internet economy and Alibaba already owns several important companies there like Lazada and Paytm. Of course, China is where Alibaba Cloud is leading, and considering how China's cloud spending is now the 2nd largest in the world with lots of growth potential ahead, doubling down not only makes sense but may even yield tangible results soon. Announcements of new data center and region locations are signals worth monitoring.
As for IBM plus Red Hat, it’s betting heavily on hybrid cloud to resurrect its growth. There are a lot of confusing marketing terms in the cloud industry, hybrid cloud being one of them. In the plainest of terms, hybrid cloud means running your IT in a mix of traditional non-cloud infrastructure and a cloud platform, thus hybrid. In the IBM case, the hybrid likely means long-time IBM customers mixing its existing mainframes with OpenShift to become one hybrid platform. In other words, IBM has an existing customer base to “cloudify.”
How big will hybrid cloud be in the entirety of cloud computing is an open question, but it should be significant. AWS used to see the term itself as a threat enough that the company banned it from all partnership branding and user conferences only to somewhat relent recently, accepting the reality that hybrid cloud (along with multi-cloud) cannot be wished away.
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阿里巴巴 vs IBM：争夺云市场第三
云计算市场的竞争正在极度升温。中国时间的本周一，阿里巴巴宣布在未来三年内给阿里云投资2000亿人民币。美国时间的本周一，IBM的新CEO Arvind Krishna首次参与季报电话会议，强调了收入增长和混合云（hybrid cloud）客户是衡量公司未来几年进度的两大指标，与前任CEO Ginni Rometty 强调的每股收益指标明显不同。
两家公司都在争夺庞大且不断增长的全球云计算市场的第三名。目前的第三名是谷歌的GCP，但位子坐的并不稳。两家公司都有机会赶上GCP，但方式截然不同。
买别人vs自己造
阿里巴巴选择了“自己造”这个路线。阿里团队一直如此，与亚马逊打造AWS的方式很像。这次新投资是对阿里最初十年100亿元人民币投资的肯定和延伸。阿里云从2009年起家，当时这项对云的押注风险很大。我们先好好思考一下这次2000亿人民币的新投资（大约282亿美元）的厉害程度。IBM收购Red Hat的价格是340亿美元，比当时Red Hat的估值（接近210亿美元）高出63%。要记住，这210亿美元是华尔街给的估值，不是现金。如果IBM对Red Hat的收购发生在今天，Red Hat的估值应该会因为新冠疫情所影响的经济状况而低一些，IBM要买的的话也会便宜些。这一假设突显出阿里的新投资有多重磅；同样的钱今天很有可能买得起Red Hat，还能剩点零钱。
显然，IBM选择了“买别人”这条路。这也是竞争对手使用的更为常见的方法。微软收购了GitHub。谷歌收购了Looker。VMWare购买了Pivotal和Carbon Black。这些都是价值超过10亿美元的交易。在过去的几年里，大大小小并购和并购雇人的做法发生过许多次。所有这些收购都是为了提高对一个云平台的基本使用形式：计算和存储。在很大程度上，各大云平台仍处于“抢地盘”的状态。
收购公司通常是提升盈利的捷径，但对业务增长的长期影响业界里并没有公认结论。IBM收购Red Hat是为了长期增长的潜力和技术能力，特别是在容器编排方面。绝大部分云平台已经围绕着Kubernetes开始标准化，这是一个开源的容器编排科技，最初缘由与谷歌。IBM最近的Q1 2020季报电话会议中，已经在很多地方强调“容器”、“Kubernetes”和“Open Shift”这几个关键词。Open Shift既是Red Hat托管的Kubernetes平台。
阿里和IBM之间的竞争归根结底是在Red Hat与IBM（或IBM与Red Hat）的整合速度，和阿里能否有战略性和效率地花掉新的投资之间。
而这个速度和效率取决于文化。
宏观文化与微观文化
所谓“宏观文化”，我指的是公司以外的宏观商业大环境。所谓“微观文化”，我指的是公司内部特有的企业文化。阿里和IBM在这两个方面都有优势和劣势。
对阿里来说，“微观文化”是它的优势。它以组织严密、有点古怪的公司文化而闻名。有人觉得是个幸福大家庭，也有人觉得是门“邪教”。（举个例子，在马云还是CEO的时候，他会每年挑选一些新婚的员工为他们特别主持一场阿里巴巴式的婚礼。幸福家庭还是邪教？你自己决定。）
这种强大的内部文化可能也是阿里在云计算领域选择“自己造”的关键驱动力。打造一个靠谱的云业务在技术上很有挑战性，前期成本非常高，而且需要有打持久战的耐心，收益要比to C产品来的慢得多。拥有独特文化的公司也意味着如果你收购了其他规模较大的公司，整合双方人员将极为困难。阿里在自己的“微文化”基础上下赌注，并投入大量资金来支持，正是在发挥自己的优势。
“宏观文化”环境则恰恰相反。阿里正处于一个艰难的全球商业大环境中，这个状况已经持续一段时间了。2017年初，特朗普刚上台时，阿里高调提出要创造100万个美国就业机会。自2018年中美贸易战打起来以后，这一承诺已被撤回。阿里云进军美国的计划也在2018年被叫停，此前花了3年多时间和数百万美元建了两个数据中心和一支全方位服务的美国团队。
在新冠疫情的大势期间，中国与美国为首的西方社会之间的斗争已经到了一个“文明之间”的矛盾，而且愈演愈烈。特朗普和拜登都在播放大选广告，指控对方对中国政府更友好，自己对中国政府最强硬。我们离大选日还有6个多月，反华言论的声音只会越来越响。像阿里这样的中国企业则基本无法在美国这个目前利润最高的云计算市场中做生意，而需要耐心地在其他地方创造增长机会。
对IBM来说，“微观文化”是它的弱点。据我所知，IBM的企业文化没有什么有特点的地方；过去十多年来低迷的业绩也对打造文化有影响。Red Hat的文化则是个鲜明的对比，非常强大、有凝聚力，这与Red Hat多年拥抱开源软件文化有很大关系。Red Hat的文化在科技界是众所周知的，有些人认为甚至是独一无二，不可复制的。不难看出，这两种“微文化”很有可能演变成一个即将爆发的文化冲突。
如果你和我一样是个对商业管理很投入的人，那看Red Hat和IBM整合这场戏就像看Netflix上最火的电视剧一样精彩。现在判断进展是否顺利还为时过早，毕竟既收购正式结束后才过了不到三个季度。但随着阿里的大手笔投资，以及其他公有云供应商为发展而进行的努力，这个合并必须尽快展现出有意义的进展。
IBM也许觉得合并已经有了效果，而且体现出了自己在“宏观文化”作为一个企业技术老品牌的优势。毕竟IBM是老字号，已经拥有许多大公司和政府作为客户。在其Q1 2020季报电话会议中，IBM SVP兼 CFO Jim Kavanaugh 说：
Red Hat签署了其历史上最大的两个单子，利用了IBM深厚的客户关系。这是IBM和Red Hat共同价值的有力证明。
虽然我不知道这两个大单子是和哪两个客户签的，以及它们的来源，但这种说法听起来更像是一个商业伙伴之间的介绍。这种介绍在两个有合作伙伴关系的公司之间经常发生，从而满足客户的需求，不是什么特殊的事情。如果要评价IBM百年历史上最昂贵的收购是否值得，光以互相介绍客户来做证据远远不够。我认为IBM和Red Hat在企业客户中的良好声誉是个“宏观文化”优势。但他们需要打造一个新的携手企业“微观文化”，才能尽快的把优势利用起来。
业务增长从哪里来？
阿里和IBM的增长来源很不同，就像彼此的文化差异一样。对于阿里说，增长是个地理问题。对于IBM来说，增长是个产品问题。
阿里云未来可能会扩大的地域是拉丁美洲、东南亚和南亚，同时会在中国巩固自己的领先地位，并避开美国市场。
拉丁美洲很有意思，是一块相对空白的画布；所有其他大的云厂商目前在拉丁美洲只有一个数据中心地区上线，阿里一个还没有。根据行业市场研究所IDC的统计，预计2018-2023年间，拉美整体云计算市场的复合年增长率（CGAR）将达到38.3%，尽管基数比较小。阿里和其他中国科技公司的to C业务，比如滴滴出行，已经在拉美许多市场取得了突破，因此当地的政治和文化阻力可能不会像在美国那么严重。东南亚和南亚则是阿里的自然延伸，因为该地区互联网经济在蓬勃发展，而阿里也已经拥有了像Lazada和Paytm等几家当地的互联网巨头。在中国的云市场里，阿里云是领头羊，而且最近中国的云计算总开销已经达到全球第二，还有许多增长空间，加倍巩固自己的领先地位不仅是正确的长期战略，甚至可能在短期就会产生切实的成果。未来新数据中心和地理位置的公布是值得注意的信号。
至于IBM加Red Hat，这个组合正在大力押注于混合云产品技术，以促进恢复增长。云市场里有很多令人困惑的营销行话，“混合云”就是其中之一。最简单地说，混合云就是在传统的非云基础设施和云平台的混合使用中运营公司的IT，因此是混合的。从IBM的角度看，混合云很可能意味着把IBM的长期老客户现有的mainframes和OpenShift混合起来，成为一个新的混合云平台。换句话说，IBM有许多现有的客户群把它们“云化”。
混合云在整个云市场中的规模有多大还是个未知数，但应该不少。AWS曾经将这个词都视为一种威胁，禁止所有合作伙伴和在用户大会上用这个字眼，直到最近才稍有所松懈，低头接受了混合云（以及“多种云”，multi-cloud）不可被忽视的存在和现实。
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