Tencent leverages WeChat ecosystem to challenge Amazon, Microsoft’s cloud dominance | Wilnesh News

SINGAPORE – Chinese tech giant Tencent is increasingly leveraging its WeChat super app ecosystem to differentiate itself from major global cloud service providers, Tencent Cloud chief executive Dowson Tong said.

Tong told CNBC on the sidelines of the recent annual Singapore Fintech Festival that more and more customers are interested in participating in creating their own super apps, which Tencent Cloud offers by sharing its technical and operational experience gained in building the WeChat ecosystem. this service.

“Compared to many (other) online platforms, this makes us stand out,” Tong said. Microsoft Azure, Amazon Web Services and Google Cloud Platform are the three major cloud service providers. 68% market share As of the second quarter of this year, according to Synergy Research Group.

Super application platforms are typically developed using cloud infrastructure to provide scalability, reliability, and efficient resource management.

Tong said many Tencent cloud service customers are keen to build their own mini programs on the WeChat network to attract existing users of the super app to use their services.

“Many of our enterprise customers … they want to borrow some of the technology that makes our consumer services successful. They also want to leverage our ability to connect users,” Tong said.

The financial and government sectors make up the bulk of this interest pool, the company said. For example, Canadia Bank in Cambodia has partnered with Tencent Cloud to launch a new mobile banking application in 2023.

Super apps are apps that provide a one-stop shop for a variety of services – from messaging to payment transactions to ordering food and other services. WeChat is the world’s largest super appboast Approximately 1.3 billion monthly active usersaccounting for about 90% of China’s total population.

While global rivals Amazon, Google and Microsoft offer a range of services to their customers, these are often spread across multiple platforms and apps rather than being offered on an all-encompassing platform like WeChat.

For example, Amazon focuses on e-commerce, cloud services, and streaming media, but does not have an app that integrates these services. Likewise, Microsoft offers enterprise solutions like Office 365 and gaming, but lacks a comprehensive super-app for consumers. Google offers search, email, cloud services and the Android operating system, but each service is accessed separately.

2022, Microsoft It is said The company is considering creating a super app covering messaging, web search capabilities, news and shopping, but the company has yet to issue an official statement or follow-up on the report.

Sun Wei, chief analyst of Counterpoint Research’s artificial intelligence team, said that although Tencent’s super application ecosystem is unique, it may not be the be-all and end-all in the cloud space.

“In the cloud industry, super applications are not the core of service offerings. Cloud customers prioritize infrastructure reliability, scalability, security and compliance rather than consumer-facing integrated applications,” Sun said.

She added that while super apps can enhance user engagement and data collection, these features will not directly impact the core services that cloud customers seek.

Sun acknowledged, however, that there is “absolutely huge added value” in having a super app that can accumulate this pyramid of comprehensive user data to enhance the customer experience. data flywheelthe more data the system collects, the more value can be extracted.

She said the lack of super apps among the three cloud giants could also be due to different regulatory issues and market dynamics in the West, where specialized apps are more popular than all-in-one solutions.

Super app gains traction mainly in AsiaIn addition to WeChat, Gojek and Grab have also proven their growing popularity.

The global super app market is valued at US$61.3 billion in 2022 and is expected to expand at a compound annual growth rate of nearly 30% between 2023 and 2030. According to a research reportwhich may increase the appeal of cloud services offered by Tencent to super app developers.

Tong said that in addition to leveraging its super application expertise, Tencent Cloud’s active integration of customers’ public cloud resources with local private resources also helps them compete with international cloud providers, which he said tend to focus on public cloud.

In a public cloud, multiple customers use a shared set of computing resources, such as servers, storage, and network infrastructure. Having private resources on-premises means companies can store their own data centers in their own facilities and manage them independently without having to share them with other customers.

While Amazon and Microsoft offer hybrid cloud options, Counterpoint’s Sun said Tencent may be unique in its ability to provide local solutions tailored to customer needs in the Chinese market, particularly for social media, entertainment, video and Games are customized.

“This further gave its super app WeChat an advantage, creating an upward spiral,” she added.