Do not take Dropbox road, how do cloud storage?

A cat walked in front of the camera, and Tianbo's phone immediately synchronized the image of the cat. He looked down at the surveillance video on his phone, a little complicated. "The product is very successful. But the number of users, so many videos, storage is a big problem. ”

Tianbo is the head of ZTE (17.36, 0.03, 0.17%) internal entrepreneurship Project "Home Networking Team". From March 2014 onwards, he led the team to develop a family of intelligent surveillance camera products "Xiao Xing look." "Xiao Xing See" Can monitor the video upload to the cloud, let the user through the mobile phone to see the situation at home. But it also means that each camera can upload video streams 24 hours a day. General 1-minute 720P video size will produce nearly 100m,24 hours of video files will be over 140G. When the number of users reaches a certain scale, the Tianbo team faces very large storage pressures.

The solution they were able to take in the past was to constantly buy servers and expand the capacity of their own storage. This approach, in addition to spending a lot of money, but also a lot of additional personnel Management Server.

For the seven-Neu Yun storage, the problem with Tianbo is the company's business opportunities. As a company to provide cloud storage services for enterprise customers, seven of cattle now have 150,000 enterprise users, of which more than 100,000 are internet companies, including the United States Mito, peas, etc. 2014, seven cattle revenue scale is expected to reach 800 million yuan, after Aliyun.

Lu Guihua and Xu Xiwei, the founder of the seven cows, are technically born. Xu Xiwei is China's first batch of cloud computing researcher, is responsible for the Jinshan Storage Laboratory and the Royal Network disk, in the storage industry has little reputation. Lu Guihua also in Jinshan and grand work for many years. But unlike Xu Xiwei, Lu Guihua began with technical staff and later shifted to management and marketing.

In 2011, Lu Guihua and Xu Xiwei found 3 other core team members and decided to start a business with 5 people. The first question they think about is, "What are our people good at?" What are we good at, and what products are being welcomed in the market? Just a team of 5 people are technical origins, has accumulated seven or eight years of experience in storage products, they will soon be the cloud storage to determine their own entrepreneurial direction.

Because Xu Xiwei in the storage industry has a certain degree of professional influence, when he came out of the news of entrepreneurship, several investors came to the initiative to come to the door. Xu Xiwei finally selected Jingwei Venture investment [Micro Bo], in the company shortly after the establishment of a millions of yuan to obtain a round of financing.

"Although Jingwei Ventures were bullish on us, they didn't quite understand what we were doing," he said. In fact, we are also vague, just feel that the cloud services can be up. Our team believes that the market has come to an almost explosive time. At that time Dropbox was very successful, and we were able to achieve 1/10 of their success. Lu Guihua told the first financial weekly.

Dropbox is the first goal that Lu Guihua and Xu Xiwei want to imitate. They chose to use the personal network as the first cloud storage product of seven cows, which is equivalent to copying the Dropbox model directly to the Chinese market. Before starting a business, seven of cattle team members once created two personal network disk products-Jinshan fast disk and Shanda network, which makes them confident to quickly do a similar product. And with Dropbox's success in foreign markets, they speculate that personal nets will also make a good profit in the Chinese market.

Lu Guihua and Xu Xiwei from May 2011 onwards to lead the team to develop personal network. 4 months later, seven cattle of the first product personal network disk "Q disk" officially online. But after the product was launched, they found that the reality was completely different from what they had expected-they overestimated the willingness of individual users to pay.

In the Chinese market, it is very difficult to make profit through personal network. Lu Guihua and Xu Xiwei were referring to Dropbox's earnings, but there was considerable difference between the US market and the Chinese market. The most deadly of these is the fact that Chinese individual users are far from being paid for software, and they are particularly reluctant to pay for low-value-added products. In addition, if you want to face the personal consumer market, the core competitive advantage of the enterprise is not technology, but how to guide users through the operation. Therefore, seven cattle also need to invest a large amount of money for product operation and promotion.

The product is not profitable, but also to continue to invest a lot of money for operations, which will obviously lead to long-term loss of the company's status. So there are few startups in the Chinese market that are making personal web products. The rest of the personal network disk products are provided by some large companies, in order to the strategic value of the network and willing to burn money to continue. The reality of the market allows Lu Guihua and Xu Xiwei to realize that the product direction of the personal network disk is a wrong choice for seven cows.

"We were trying to get the company from 0 to 1 through a personal network, but we didn't make 1," he said. Because our competitive advantage is technology, not business or operation. And we think business is a must to make money. A personal network is a product we make based on unrealistic assumptions, so it's going to hit the wall. The impact of this lesson on the entire company is far-reaching. "Lu Guihua said.

Lu Guihua and Xu Xiwei decided to abandon the personal consumption market and turn to the enterprise user market. Because technology is the key factor in deciding whether or not to buy a service for enterprise users, it doesn't matter if the marketing ability is weaker. And the technology is precisely seven cattle team best at. As a result, they have spent half a year developing cloud storage products for enterprise users, starting at the end of 2011.

May 2012, seven cattle enterprise cloud storage products to the market. But Lu Guihua and Xu Xiwei found that, although the product was made, it is difficult to sell. Businesses use seven of cows ' cloud storage products for a lot of pain. Because the original practice of the enterprise is to EMC and other traditional hardware enterprises to purchase storage hardware devices, this storage hardware with other hardware to form a complete system. But seven cattle cloud storage is a single product, no supporting services can not form a smooth system, also can not solve the user's needs at a one-time.

To solve this problem, Lu Guihua and Xu Xiwei found their first seed enterprise user Camera360. They hope to understand the needs of enterprise users by customizing a cloud storage System for Camera360. The 2012 cloud storage market, audio and video is not popular, 95% of the storage files are pictures. Camera360 is a typical representation of this storage requirement as a camera application.

The number of Camera360 users has increased very quickly, while the original users are constantly uploading new photos every day. If there are 1 million active users, each user new upload 10 photos each day, each photo 10M, the new increase in storage every day is billion m. Users have a high demand for uploading and downloading photos, and they want to be as quick as possible. At the same time, users also have a lot of processing picture requirements, such as mobile phones and computers using the same photo, due to different screen size, the size of the picture requirements are also different. If you can help users on the phone on the image compression, it can be opened faster, less traffic, so that users can get a good experience.

These new features are quickly applied to all the products that are stored in seven cattle cloud. With the popularity of rich media such as audio and video, seven Neu Yun storage has also increased the acceleration and processing of rich media files. Seven Neu Yun storage after the first iteration of the product, including "Storage + acceleration + processing" 3 core functions, launched by the user's welcome. Even many users use seven of cattle cloud storage not because of the need for storage space, but for additional acceleration and processing capabilities.

"After the logic has been figured out, we know what to do afterwards." We define ourselves as data processing providers, which are ' store + compute '. Instead of selling a cloud host, leave it behind and keep it with you. We have more than half the machines that are doing the calculations, and the data above is running with our ability to handle it. The ability to handle data is very important to us. Lu Guihua told the first financial weekly.

Lu Guihua and Xu Xiwei are considering how to create revenue from the first day the product direction is adjusted to business-to-business. In their view, the creation of revenue is a company's most important purpose. "At present, the situation of 2C is not very healthy, rely on burning money to attract customers, but may not even how to profit is not good." This is very related to the capital environment. The company doesn't care if the investor doesn't care about profitability. But we do not want to burn money, the future of the company should not be in the hands of the people who give you money, the essence of business is not the company's market value. ”

Lu Guihua and Xu Xiwei the seven bull's profit process into two stages, the first stage of revenue is important, the second stage of profitability is important. They believe that if the natural growth rate of revenue can be maintained at a level, the growth rate of costs will gradually decline. So as long as the future slows investment, profitability will not be a problem.

The main business model for the current seven-cow cloud storage is to allow corporate users to pay for cloud storage services. This payment mode is similar to the previous hardware lease of the enterprise and how much resources are paid for it. Therefore, the cost of different users varies greatly from dozens of to hundreds of thousands of yuan per month. Lu Guihua said that today, seven of cattle 150,000 of corporate users, paid users accounted for 30% of the total number of users.

As incomes climbed, seven of cows suffered a global price war on cloud storage. At the beginning of 2014, Amazon [Weibo] and Google, the two big cloud-storage giants abroad, sharply lowered their cloud-storage prices. In some services, the price is even more than 50%. Seeing this, China's cloud storage service providers have to follow up on the price reduction. If not lower prices, the domestic cloud storage service providers will not only lose the competitive advantage in price, will also appear to be behind the technical level, can not reduce costs through technology. "If not prepared beforehand, follow the price will make the enterprise's gross margin instantly from positive to negative." This is a terrible thing, will eliminate many enterprises. "Lu Guihua said.

Fortunately Lu Guihua and Xu Xiwei two years ago have been studying how to reduce the cost of cloud storage. They realised that cloud storage was a basic service product similar to rice and cooking oil. For basic services, price is an important competitive force. For example, people buy rice and cooking oil, as long as the quality is no problem, the price will be their focus on the consideration of factors.

and to achieve price reduction, but also to ensure that the company's gross profit margin remains unchanged, the key is to reduce costs. For example, the original storage of 1G data requires 5 cents of hardware equipment, now should be replaced by 5 cents hardware equipment.

But the risk is that, with cheap hardware devices, how to ensure the same stability and transmission speed. This can only be done through continuous updating of technology. After more than a year of cost-cutting technology research and development, in the first half of 2014, seven Neu Yun storage has lowered its own price by 70%. "We are technically ready to cut prices, just in the face of the global cloud storage price reduction, so price reduction is a natural process." "Lu Guihua said.

With more and more customers using seven of cattle, seven cows have become a large data platform with massive data. However, the data itself does not make sense, and what is valuable is the laws and phenomena found in the data. Therefore, many enterprises have the algorithm needs to analyze and process data. Although the seven cows themselves do not have algorithm team, but many seven of cattle customers have a very strong algorithm team, and these algorithms are often the leader in the field of subdivision, such as face++ face recognition technology, beauty Mito image beautification technology. If we can make these advanced algorithms open to other enterprises in seven of cattle, the algorithm can also charge a certain amount of money for the enterprise.

Lu Guihua and Xu Xiwei see the possibility of a seven-cow fight as a cloud-storage ecosystem. They plan to develop seven of cows into a large data platform to provide value-added services for data analysis in the future. The seven bulls will set up a service store similar to the App Store, where companies can freely upload and develop data Analysis Services, and other customers can buy services freely. For example, a photo album application, if you want to use face recognition to classify photos, the original may have to look around to find algorithms, and the effect is not necessarily good. But on the seven-cow platform, he can directly buy face++ to provide the face recognition algorithm, immediately realize this function.

This ecosystem is one of the reasons to attract qiming ventures to invest seven of cattle. In the future, cloud storage is becoming more and more important for data analysis and processing. Everyone's data can be just as massive, and it's important that you get something personalized from it. But the data processing is not a can do, seven cows will be made into a platform. In the long run, seven of cows are doing high value-added storage, and the whole vision of the plan is exactly the same as the cloud storage we envision. Mao San Bo, vice president of Qiming Venture, said to the first financial weekly.

In the August 2014, seven Neu Yun stores received a tens of millions of dollar C-round financing from broadband capital-led, Jingwei and Qiming Ventures. Prior to this, seven Neu Yun storage at the end of 2012 to obtain qiming venture investment of tens of millions of dollars. Lu Guihua said the new financing will continue to build the cloud storage ecosystem in addition to its investment in research and development and expansion of infrastructure.

"The future of the cloud platform will be a social infrastructure like water, electricity, coal and the internet," he said. There are still a lot of company's systems running on hardware, but in the future all Internet companies will be running on cloud platforms. What we want to do is that companies put their own data up, this life without the data removed, any processing can be completed on the above. "Lu Guihua said.