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As the big brother in the cloud industry, Alibaba cloud’s every move has attracted much attention. An unexpected personnel adjustment pushed it to the cusp of the storm overnight.

The matter is simple and clear. It is nothing more than a transfer of troops between the old and the new. From the perspective of good doers, this is called Xinhua “crowding out” the old Huawei people.

It seems that Ali should pay more attention to the recent series of events.

Personnel is a table

The cause of the storm can be traced back to a month ago.

According to media reports, in March this year, Alibaba cloud introduced Cai Yinghua, former president of Huawei EBG China, as senior vice president of the group (M7). This action was extremely rare and caused a discussion in the industry at that time.

During Cai’s tenure, four M6 level core business executives, Ren Geng, President of Alibaba cloud China, Yuan Qian, President of international business, Xu Shijun, President of digital government, and Liu Weiguang, President of new finance, reported to him.

Ren Geng and Cai Yinghua worked together in Huawei. Therefore, at that time, the industry speculated that they would continue to “build a team” in Alibaba cloud.

However, one month later, at the internal management meeting on April 12, Cai Yinghua announced a new round of organizational structure adjustment: Ren Geng (M6), President of Alibaba cloud China, will leave, which will be taken over by Huang Haiqing, vice president of Alibaba cloud China.

Let’s start with the latter. According to public information, Huang Haiqing has rich experience in the to B industry and has worked in Dell, IBM, Oracle and other companies. In 2016, Huang Haiqing joined Tencent cloud and then resigned in 2018 to become the CEO of Detuo information. He once led the company to log on to the science and innovation board in 2020.

As for the former, public information shows that Ren Geng was born in 1983, majoring in computer and technology, and graduated from Chengdu University of Electronic Science and technology in 2005.

Before joining Alibaba, Ren Geng’s resume was mainly in Huawei, including serving as the general manager of Huawei Myanmar branch from October 2012 to March 2015 and the deputy general manager of Huawei Thailand branch from October 2011 to July 2012.

In 2015, Ren Geng suddenly left Huawei and moved to Alibaba. According to Huawei cloud, this was not his personal choice.

After entering Alibaba, Ren genghua was named “second brother”, and his first job was not in Alibaba cloud, but related to his old bank going to sea. From March 2015 to September 2016, Ren Geng served as the general manager of Alibaba’s cross-border business department and was responsible for the work related to cross-border B2B platforms.

Since then, Ren Geng has successively performed his duties as general manager of Alibaba cloud business incubation division and general manager of Alibaba cloud general business division.

The key node occurred in 2017. According to tianyancha data, the legal representatives of several Alibaba cloud subsidiaries such as Beijing Alibaba Cloud Computing Technology Co., Ltd. changed from Hu Xiaoming to Ren Geng, which proves that Ren Geng’s position in Alibaba cloud has risen.

Before this personnel change, Ren Geng’s rank in Alibaba cloud sales system was second only to president Zhang Jianfeng.

It is reported that Ren Geng had already left his job as early as last year, but he remained in office for several reasons. As for the fate of his resignation, anecdote is Baidu intelligent cloud.

Due to the sudden adjustment and the departure of Guo Jijun (M6), head of the ecological and sales management department, and several P9 / P10 middle and high-level backbones under Alibaba vice president Li Feifei and other executives, Alibaba cloud fell into a storm of public opinion under the aggregation of multiple factors.

Strategy is inside

Personnel adjustment is often the appearance of business quality. According to the practice of large factories, the departure of executives in this round is nothing more than related to performance and strategy implementation.

The performance level is the most intuitive. At the end of February this year, Alibaba announced the third quarter financial report of fiscal year 2022.

Subdivided into cloud businesses, before offsetting the impact of cross segment transactions, Alibaba cloud’s revenue increased by 19% year-on-year to 26.43 billion yuan, and after offsetting, the revenue was 19.539 billion yuan, a year-on-year increase of 20%, and the growth rate slowed down. In terms of profit, it was only 134 million, and the profit margin fell to 0.7% from 2% in the previous quarter.

Here’s a detail. Alibaba cloud has never announced the “cross segment transaction” before this quarter, which is rare among domestic cloud manufacturers. Industry stakeholders commented that “this move is easy to be associated with spin off”.

In this financial report, Alibaba cloud attributed the obstruction of revenue growth to “the continuous impact of overseas cloud services that head customers stop using for their business outside China based on non product related requirements, as well as the slowdown of customer demand in Internet industries such as mutual entertainment and online education”.

Considering that Alibaba cloud’s revenue growth was hampered by the high base of existing revenue, objectively speaking, Alibaba cloud’s performance was under pressure in this quarter.

From the perspective of lengthening the timeline, Alibaba cloud frequently encountered other adverse factors throughout 2021.

In the fourth quarter of fiscal year 2021 (the first quarter of 2021), Alibaba cloud’s business revenue increased by 37% year-on-year in the same period, and the growth decline was more prominent due to the loss of a single head major customer (overseas business).

Since then, the growth of cloud business revenue has slowed down for three consecutive quarters. It can be seen that the impact of losing major customers can not be recovered in the short term. To this end, Alibaba cloud is trying to diversify. Customers from non internet industries accounted for 52% of its revenue in the fourth quarter.

The impact of incorporating nails also needs to be considered during the financial year. Since April 1, 2021, the performance of nailing business has been reclassified from innovation business and other segments to cloud computing segment.

After Alibaba cloud president Zhang Jianfeng launched the “cloud nailing in one” strategy, nailing undoubtedly expanded the value of upward and downward extension for Alibaba cloud, and it is also the starting point for Alibaba cloud to extend to the PAAS layer.

Considering that the nail business is still in the investment stage, consolidation will lower the profitability of cloud computing in this quarter, and its contribution to revenue is not significant.

On March 22, 2022, nailing held an annual press conference to announce the company’s strategy for 2022. Ye Jun, President of nailing, first proposed the commercialization path of nailing in his speech. On the basis of the free Standard Version, he launched three commercialized versions: professional version, exclusive version and exclusive version.

Behind the commercialization process, it also proves that Alibaba cloud is in the contraction stage of the spring.

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