This week’s podcast is about cloud business models. It’s a complicated and evolving subject. But I am trying to identify good cloud business models that aren’t obvious (like AWS, Azure and Google Cloud). Alibaba Cloud and Snowflake are examples.
Here is an example of an Innovation Platform.
Here is an example of a Coordination, Collaboration and Standardization (CCS) Platform:
Here are four sub-types of Coordination Platforms.
- Communication. Zoom, Slack, etc.
- Data Intelligence. Snowflake and Confluent.
- Team Projects. Manual and complicated projects like architecture, media creation, software development.
- Operational Automation.
Here are cloud business models I like:
- Innovation platforms
- Coordination platforms (especially when combined with innovation platforms).
- Vertical solutions
- Why I Really Like Amazon’s Strategy, Despite the Crap Consumer Experience (US-Asia Tech Strategy – Daily Article)
- 3 Big Questions for GoTo (Gojek + Tokopedia) Going Forward (2 of 2)(Winning Tech Strategy – Daily Article)
- Why Netflix and Amazon Prime Don’t Have Long-Term Power. (2 of 2) (US-Asia Tech Strategy – Daily Article)
From the Concept Library, concepts for this article are:
- Platforms: Coordination
- Platforms: Innovation
- Cloud services
From the Company Library, companies for this article are:
- Alibaba Cloud
Welcome, welcome everybody. My name is Jeff Tausen and this is the tech strategy podcast where we dissect the strategies of the best digital companies of the U S China and Asia. And the topic for today, Snowflake, Alibaba, and my three favorite cloud business models. Now, for those of you who are subscribers, you might’ve noticed that I sent you two emails in the last week, kind of about Alibaba, but really about cloud. and I kind of went down the rabbit hole. I mean, those were kind of ridiculously long emails. It was a lot of basically strategy thinking of me sort of teasing apart and trying to get at what I thought mattered most. So if you went, I thought they were very, very good. I just thought they were very long, which is, you know, sometimes that’s a bit daunting when it gets into the email box. And sometimes I find myself when I get really sort of long, in-depth things, Sometimes I’m just not mentally there for it. Like I’m not in the right mood to really just dig into something like that. So anyways, today’s podcast will be sort of a shorter version of some of that, which I thought was within all of that. The part that I thought was probably the most important was look, cloud is big. It’s hard to figure out a way to think about it. I’m going to give you a couple of frameworks to think about cloud, but at the end of all of it, net net. here’s three business models I do like within all of this, even though it’s still sort of emerging and evolving. So that would be sort of, I guess, call it the so what of all of that. But yeah, I did think that those were kind of a bit crazy long and in depth, but I liked them. But yeah, a bit long. Anyways, okay, so that’s going to be the topic for today. And let’s see, housekeeping stuff. As I mentioned last week, we’re rolling out the Asia Tech Tour. which is what we’re calling it now, which is going to be in March. We’ll probably do a couple of weeks, but it’ll be sort of a five day deep dive tour, probably mostly Southeast Asia. The working plan is Jakarta, Singapore and probably Thailand. We may swap in South Korea, but then the flight becomes problematic. And but basically, you know, doing a sort of executive tour, either for individuals or for companies. take the whole management team, take everyone out, do sort of company visits on the tech companies of those regions that are worth paying attention to, and then a lot of sort of lecturing and speakers. So it’s sort of, let’s say, 50% training, 50% visiting companies, and let’s say another 50% just having fun because Asia’s awesome, and it’s open for business again, and it turns out to be a bit of a vacation as well. Anyways, that’s the plan. And if you’re interested in that, send me a quick email and I’ll send you the basics. If you think it’s right for your company, definitely let me know because that is probably where we’re focused more so. Anyways, if that’s of interest, let me know. And the email is always info at TowsonGroup.com or just reply to those emails I send you. Okay, other stuff. Standard disclaimer, nothing in this podcast or in my writing or the website is investment advice. The numbers and information from me and any guests may be incorrect. The views and opinions expressed may no longer be relevant or accurate. Overall, investing is risky. This is not investment advice. Do your own research. And with that, let me get into the topic. Now, as always, there’s two concepts for today. And the concepts for today are innovation platforms and coordination, collaboration, and standardization platforms, CCS platforms, also called coordination platforms. Now, both of those are really important and they’re really important ideas. And I think that is a very good way to view cloud as a business model. So I sort of, the reason I wanted to talk about this was I think people don’t talk about these two types of platforms nearly enough. Like if I talk about marketplace platforms, people kind of know that stuff. Then you think about products versus services and so on. And if I talk about audience builders like YouTube, people kind of are familiar with that. But when you get into coordination platforms and innovation platforms, there’s as much complexity in these two types of platforms as there are in say marketplace platforms. But usually people don’t have that depth of understanding of these. So this is sort of an opportunity to talk about those two concepts, which I think are really important. Really, they’re business models. And those are the two concepts for today. So they’re in the concept library as always. And Cloud is a great example of this. As is Alibaba Cloud, a company I’ll talk about. As is Snowflake, which I’ve talked about before. Two of those businesses are based on these two types of platform business models. So I’ll sort of go into those. But yeah, I think there’s some really good lessons in this one and there’s some really good theory, which I really don’t hear people talk about very much. But I think it’s important. Okay, so we can sort of start with Alibaba. And Alibaba’s core business has always been e-commerce. That’s the engine that makes the car go. And everything they build is a platform business model so that when they go into cloud, you know they’re building a platform business model almost for sure. Okay, but Marketplace, you know, they basically built four Marketplace platforms in e-commerce. You could call it two, you could call it four, but you know, there’s the B2C platforms, which are Taobao and Tmall. You could consider that one platform or two, but it’s connecting merchants with consumers. Marketplace, fine. And then they have the B2B e-commerce platforms, which you could call wholesale versus retail. And that’s alibaba.com and 1688.com. You know, that’s really where they got their start was doing cross-border, wholesale e-commerce connecting Chinese manufacturers with merchants around the world, but not dealing with consumers. You know, the history, which I’m sure people are familiar with this, Alibaba didn’t get into B2C, which is now the engine of their business by a mile, uh, until eBay really started getting active in China. And they thought, you know, if eBay goes in after B2C, they’ll eventually go B2B. So we have to move into B2C to protect our core business, which was B2B. And hence they launched Taobao and then Tmall, which stands for Taobao Mall as a defensive move. And then it turned out it was a much better business and now nobody talks about 1688.com and Alibaba.com, even though they’re both pretty cool actually. Okay, but you’re talking about platform business models as always, cause that’s Alibaba. And when they talk about all the initiatives they have, logistics, I don’t know, video sharing, they have a movie production pictures department, Alibaba Studios, or Alibaba Pictures, I’m sorry. When you look at all that stuff, they kind of give you a hint very loudly of where they’re going and generally speaking, if e-commerce is number one, two, and three, number four is cloud. They will also point to Tsai Niao and logistics. But generally speaking, cloud is right up there is the next major thing. You could also put Ant and financial services right there too, but since they’ve pulled that out and they really argue that it’s a different business now, which they argue a lot. If you ever say like it’s part of Alibaba, I get a little correction from someone saying, no, no, it’s separate now. And I’m like, yeah, okay, uh-huh. I mean, there’s degrees of separate in this world then. when you’re just down the street and it’s all the same, okay, you’re separate, I get it. Legally, you’re separate, fine, fine, fine. Anyways, we’ll put Ant aside, but it’s also, at least two, probably three platform business models as well. But the so what is look, they like to launch platforms. Cloud is a very big platform initiative. It’s arguably their biggest long-term trajectory outside of e-commerce. maybe financial services and, but that really depends on regulatory issues. And you can look at that for China. If, if the government of China is a headwind against their financial services ambition, you know, slowing them down, get approval, you need a license on the cloud side, the government is a tailwind. You know, Google is not going to be doing cloud in China. Neither’s AWS, neither’s Azure. the government is going to be a tremendous benefit to Alibaba Cloud. So the politics cuts multiple ways. But let’s assume they’re basically going to build a platform business model here, Alibaba Cloud, depending which numbers you look at. Probably number four in the world after the three majors out of the US, which I just mentioned. Number four and number five is it’s Alibaba Cloud or maybe Tencent. Some people would put Huawei, but I think everyone agrees Alibaba Cloud is number four. But that’s globally. If you actually look at it within China, they’re clearly number one. And if you look at it in Asia, they’re a major player in Asia. Big surprise. Okay. So then you start to think, all right, that’s a good company to study. The problem, of course, is it’s hard to get real numbers about Alibaba Cloud because it’s buried under Alibaba. So those of you who are subscribers, you know… I’ve written about Kingsoft Cloud, which is another Chinese cloud company, which is under Kingsoft, which is really under Xiaomi, because the head of Xiaomi, Lei Jun, was chairman of Kingsoft. Kingsoft Cloud, which is separately listed, and you can pull the financials, provides cloud services for Kingsoft and Xiaomi. It’s all Lei Jun, basically. So we can get some viewpoint there because it’s a pulled out company and get some real details. But Alibaba Cloud is unfortunately buried within Alibaba. It’s hard to get great numbers. But I’ve been looking at both of those for quite some time, and then also looking at companies like Snowflake. And so trying to take apart how to think about this business. And a lot of the problem is it’s just still evolving. What happened with, let’s say, PCs or smartphones is… A couple leading companies really sort of put together the infrastructure, put together the tech layers, the tech stack. If you were a developer writing mobile apps, the iPhone was already done. It had the hardware, it had the software, it had the semiconductors, it had the app store. The tech stack was done. You can call that the tech stack. You can call it infrastructure. But that bit was already done when they started to write mobile apps that could run on the iPhone. And then the tech stack evolved. We added GPS and some other things. And you could kind of point to the same thing in the personal computer era, which is Windows, Intel. You know, they built the laptops and they built the desktops. And then software developers could start to write and build on top of that. And that’s kind of the first way you want to look at it, which is… What is it that developers are building upon? Where is everyone? Following developers is a really good idea. Just watch where they’re all going. But what are people building upon? What is the new paradigm that everyone wants to build their business on, build their software on, build their technology on, build their content on? Where is everybody going? And you can clearly say, okay, in the 1980s to 90s, the dominant tech paradigm that everyone was building upon was and servers located in companies. Now, the difference between that and the cloud is the infrastructure and the tech stack was already mostly done, and you could just start to build upon it. One of the reasons cloud is confusing is the tech stack is still being built. At the same time, people are trying to build upon it, the core infrastructure is still developing very, very quickly. I’ve used this analogy before. That’s like being a software developer, and you’re trying to build a mobile app for the iPhone, but the iPhone only 60% works. The screen works and the battery works, but the keyboard doesn’t work yet. So you don’t have a completed architecture to build upon. So people are building the infrastructure, as well as the software and the services, all at the same time. And the same thing is happening in Web 3, but it’s much more primitive. So that’s why cloud is a little different than say PCs or smartphones. Okay, so, but you could say 1980 to 2000, the primary architecture all the developers and all the other creators were building upon was PC and servers. Let’s say 2000 to 2008 or so, people start shifting their attention from writing apps that run on Windows to writing stuff that runs on the web. And everyone starts building on the web. Everyone starts doing HTTP. That’s where all the building was being done, and then you access it by a browser. The attention shifted significantly, and then the smartphone comes out and everyone starts building there. Each generation was fairly different. The thing you look for, or at least the thing I look for, is the two fundamental secular trends in my opinion of technology is… Where is the computer power increasing and where is the connectivity increasing? You know, laptops got better and better every single year from 1980 till now, right? Connectivity got better by the web. Those are sort of the two drivers of everything. And when they moved to smartphones, you got a massive jump in connectivity. Everyone was connected to everybody. But you took a major hit in computing power because I… smartphone can’t do anything like a PC can do. Okay. So one of the reasons like everyone looks at cloud early on is like, this looks like a massive increase in computing power. You know, we’re not going to have all the computing power of your laptop or if your smartphone, we’re going to have distributed computing power across the whole web that anyone can access. I mean, that’s a massive… the wealth of computing power that everybody can access, the data centers, the edge computing, all of it. It’s also a massive increase in connectivity because it’s cloud plus 5G plus edge computing. So suddenly everything is connected to absolutely everything. So that’s sort of, you know, why does everyone think the cloud is gonna be the major paradigm that everyone will build on? Well, because the connectivity and the computing power are taking a massive jump forward. I mean, this is a global, infrastructure that is being built. Okay, so you can kind of look at it that way. And I think that analogy is fine for how to think about cloud. But then a bunch of stuff when you start thinking about it doesn’t really make sense because you think, okay, what is the cloud being used for? And there’s just massive list of services and technologies being built on the cloud. and the list is very long and it keeps growing. And it’s, you know, the simplest thing was always, you can access computing and you can access storage. You know, that’s AWS, that’s Dropbox or whatever. I mean, that was sort of the intro service for a lot of companies, but then it quickly becomes the database, the data lake, the data warehouse for companies, mostly for companies. Then it starts becoming the home of data. and big data analytics and predictive analytics and AI and machine learning. And then suddenly all enterprise grade software is running on this stuff and then consumer software and then network devices. Oh, and then we’ve got IOT devices going everywhere. And we’ve got operating systems that work in these sensors in the factory and they connect with the phones and they connect with the cloud. And I mean, the whole thing is just super complicated. Then you add in things like 5G. Oh, and then we’ve got robots and autonomous vehicles, and they all run off the cloud with rapid connections, but there’s some edge computing there. Oh, and then we got cyber security as well. I mean, the whole thing is just massive. It starts to look not like the PCs at all, and it starts to not look like smartphones at all. It looks more like building an entire country than just a device. So… I think that analogy of the PC and the smartphones is fine, but very quickly you realize this is something much bigger. That’s one take on this. Another way you can think about it, which I play around with this idea of all the time, is what’s the difference between a platform and an ecosystem? I always talk about platforms, which I consider very simple versions of ecosystems. Ecosystems kind of this vague word that people use for a lot of things. A jungle is an ecosystem, a city is an ecosystem, the semiconductor industry is an ecosystem. But it’s basically any time you get a large number of companies all operating in a coordinated fashion to create something larger, arguably that no company could do on its own. Now this is very common in technology because everything has to work with everything else. If you’re making soda, you don’t have to be part of an ecosystem. Your can of soda functions quite well if it doesn’t connect with 20 other types of companies. But if you’re making semiconductors, well, the design language has to meet with the semiconductor foundry, and it’s got to work on the chip, but it’s got to tie into ARM. And everything has to work together. And then all the software that… Once you build the chip and it goes into say a laptop, well then all the software has to be exactly set so it runs on these chips. Everything has to connect. So ecosystems are talked a lot when you’re building out technology paradigms, technology infrastructure, things like that. When you have higher up the tech stack to services like, I’m doing a call on Skype or Zoom, well now you’re a platform that sits on top of the tech stack. And the platform is a simple type of architecture, a simple type of platform that just connects a couple users. But I’m not connecting 10 to 20 different types of companies in a coordinated fashion. And we all have to work together as an ecosystem for this service to function. So there’s pretty good books written about ecosystem strategy. I don’t talk about it very much because it’s actually pretty rare. It’s very complicated. There’s a great book called Ecosystem Edge by Peter Williamson up at Cambridge. Very good book. He’s a very good thinker on this. There’s a guy named Michael Jacobydes. I always say his name probably wrong. J-A-C-O-B-I-D-E-S. Very good thinker on ecosystem strategy. But one of the places I think everyone agrees ecosystem strategy becomes important is when you’re launching a new type of technology. because for the first version of that technology to function, you have to get everyone to work together for the first time. That’s why when Android was launched, Google put together the Android Alliance, which was an ecosystem strategy. Get all the carriers, get all the smartphone makers, get the chip makers, get them together. We all agree on the standards. We launch Android. at innovation, that when you’re creating something new in the world, it’s usually too difficult for any one company to do. It usually requires more money because you don’t just make your one component. You have to make the whole thing. You have to make the supply chain. You have to make the component parts. You have to make all the parts that are needed for the new technology and the supply chain. You have to make all of them, which is very, very difficult, unless you have an ecosystem and everyone works together. It also tends to be a very good approach for innovation where it’s not clear what the right answer is, where you’re creating new things like a smartphone or an electric vehicle, and it’s not clear what the winning product is gonna be. So ecosystems tend to be very adaptive. They’re like amoebas. All the six or seven or 10 or 20 companies work together, and as they get market feedback, they can adjust very quickly like an amoeba and find the right product. Most new products are created in this way when they’re entirely new in terms of technology. It’s either an ecosystem or maybe you get a guy like Steve Jobs who’s so good at seeing the future that he can jump to the right answer just by his gut. But most of the time that doesn’t work. So do we need to look at the cloud as really just a giant ecosystem strategy? and it’s a lot of businesses and they’re all working together and people making the servers and the chips and the AI chips and the 5G connectivity and the edge computing. And then there’s Amazon Web Services and Azure and they’re all kind of working together in a collaborative force and to create this new infrastructure and to get it to work. That’s another way to think about it, that maybe this is an ecosystem strategy and not a platform strategy. I think that’s a pretty I think there’s a lot of truth in that, and I sort of struggle with that as an idea. Okay, so there’s two different ways of thinking about the cloud. Now let me sort of jump to the so what, which is what do I think really is understandable and what are the three business models I personally like? I think these are winning business models. I think we can see it clear enough that this is a winning business model. innovation platforms, coordination platforms, and vertical solutions. Like when I’m looking at businesses, those are the things I’m looking for. Now, we could take all these businesses that are out there, like everything from Huawei, Nokia, to Alibaba, cloud, to Kingsoft, to Azure, to all of them, and you can kind of put them, I think, in three buckets. You can say, look, certain companies are just building infrastructure. That’s what they’re doing. That’s Huawei, that’s all the data centers, that’s a lot of the core cloud computing, that’s the connectivity, that’s the chips, all of that. I don’t usually focus on that sector because I don’t feel like I understand the engineering well enough. I’m more up at the business models based on software and services. So the first level infrastructure services, I don’t really pay that much attention to that, not that interesting. The next level up would be platform business models. I love platform business models, so there’s two there I like, innovation platform, coordination platform. And then the next level on top of that would be vertical solutions, which I’ll talk about that. That’s generally what I like. So those are the three, and let me sort of get into the details of those. Now, I think innovation platforms are easier to understand. Platform business model. I’ve always laid out five types of platform business models, marketplaces, payment, innovation, and audience builder, coordination, and learning. They’re in the interactions business. That’s what they do. They’re trying to facilitate and enable interactions by lowering the CoSien transaction coordination cost. If you can do that, you have a lot of the benefits of platforms. They grow very rapidly. They don’t require a lot of assets or capital to grow. They tend to be very powerful, which we’ve talked about before. You start to get network effects. There’s a lot to like about them. Innovation platforms, you know, that’s the simple example everyone always points to is, you know, it’s Bill Gates. Windows is an innovation platform. What is the type of interaction it’s facilitating? It is helping, in this case, software developers. innovate on this platform and connect with users, which could be businesses and it could be consumers. So if we draw this as sort of a blue diamond, my standard little blue diamond, one user group would be application and software developers and the others would be users of personal computers, which could be businesses or whatever. Fine. That’s an innovation platform. You could point to a third user group, which is hardware, software, and peripherals. I’ll put in a slide for this in the show notes. And if you get more of them, you get a nice network effect between the two main user groups, but the interaction you’re facilitating is mostly about innovation. It’s a space for creators to build upon and then interact with their users. And that could be software, it could be apps, it could be games, it could be videos, it could be content, it could be intellectual property. but that’s what they build upon, and then you interact with their users and you can distribute to them and monetize. So we could say Microsoft Windows is an example, Android’s an example, the Google Play Store is an example, a lot of gaming platforms are like this. And you could argue that content platforms like YouTube and TikTok are a subtype, but I usually call them audience builders. And I think, you know, within all this cloud talk, it’s clearly that’s a lot of what’s going on. That’s what Alibaba, Azure, Google, they all wanna be the innovation platform that everyone builds their business on for the most part. B2B, B2G, business to business, business to government. They want everyone to build and innovate on this. So they’re trying to recruit developers as much as possible. They’re trying to get everyone to build on their platform. And that makes the process more robust, the product is better. Small cloud services like let’s say, Kingsoft. Are they going to get a lot of developers writing on them? Well, it depends how much of this is going to be open source and whether, you know, if the developers build for one thing, it works on all, which I suspect is not going to be the case, or it’s going to be another version of Microsoft Windows, iOS, Google Play, you know, Android and so on, which is, you know, these innovation platforms, generally speaking, if you put platform business models, like certain people argue there’s only two type of platform business models. There’s marketplaces for transactions and there’s innovation platforms. Innovation platforms tend to be rarer but far more powerful. There’s only a couple. I mean, there’s Android. Everybody’s phone runs on Android or iOS. Everybody’s laptop runs on pretty much Windows. On-premise it’s the same thing. Innovation platforms tend to be more attractive. So you could argue that’s a lot of what’s going on here. That’s at least 50% of the equation. And I basically buy that. So let’s say innovation platform is what we’re looking for and therefore we can look at all the standard metrics for an innovation platform. How many users, what type of engagement, what kind of data, how much lock-in, switching costs, things like this. Okay, the other type of platforms, that’s business number one I like. Business number two, coordination, collaboration, and standardization platforms, CCS platforms. Basically in this case, the primary interaction that you’re enabling between different user groups is the coordination and collaboration on complex tasks. So the standard examples are Zoom and Slack. We let people host their discussions in this forum and interact and they can start to talk about more complicated activities without the need to come together in person. Okay. Microsoft Teams is obviously the big one. I mean, there’s a reason it’s called Teams, which we help teams work together and work on more complicated projects together. We create the tools that let you do that even when you’re not in the right room. GitHub is one that I like, where you help developers come together and create one piece of software. You’re enabling the collaboration and the coordination. The easy type of this, I call it CCS, collaboration, coordination, and standardization. Standardization is the easy part. If everyone in Thailand speaks Thai, that’s a standardization. It enables everyone to collaborate and communicate better because we’re all using the same language. Well, I’m not, but… So a language, anytime you standardize something like PDF, a programming language, that tends to be a form of collaboration and coordination. And it’s a very, you know, it’s a nice business. If you can get become a standard for JPEGs or PDF or anything like that, those tend to be very nice businesses. Um, but I generally think there’s four types of CCS platforms based on the type of interaction they facilitate and the four, and I’ll put these in the show notes are communication that’s zoom, that slack, that’s Reddit, whatever. Um, well, not really read it, but. Data intelligence, that’s Snowflake, that’s Confluent, pretty interesting companies. Team projects, that’s when you’re taking, complicated projects like say in architecture, designing a building, software development, media creation, where all the participants can work together on a team to create this project, GitHub. And the fourth one is operational automation. when you’ve got entire factories that have been digitized and they’re all working together in collaborative fashion to create a car or a logistics hub at Alibaba and you’ve got all the robots moving around the logistics hub in a coordinated fashion to accomplish a task which is moving boxes in and out. So all of those I would call them CCS platforms. I wrote quite a lot about Snowflake last year which I basically argue that Snowflake, which is the, they’re the data intelligence firm. Any business can go sign up for Snowflake. You can do it within a couple hours, upload your data, and it will start doing analysis of your data and start to give you intelligence. So it’s like you put the data there, that’s storage. and then it starts to run data analytics on that and give you feedback almost immediately. And then it moves quickly into more advanced analytics, predictive analytics versus historical analytics, so AI. It starts to move there. It’s a very good business model. And they sort of surprise AWS, Google, and Azure by jumping out in front of them in this area and specializing in data intelligence. Now, I think what Snowflake is, it’s a coordination platform in data intelligence. it, the two user groups you’d look at for Snowflake are those that provide data, that would be a user group, and those that use data. And it basically connects those two. So everyone is providing data and everyone else is using the data and those interactions become easier and easier and easier and everything gets smarter. Now, what is a provider of data? Well, that’s when it gets kind of interesting because… It turns out humans can provide data, but software and digital agents can also provide data and use data. So when you talk about user groups for a group like Snowflake, the users don’t have to be human. They can also be digital agents as well as human agents, which is kind of an interesting thing that’s happening. Anyways, so you could argue that Snowflake, and when you look at Snowflake, that’s one of the coolest business models for cloud. Snowflake, let’s say Microsoft Windows, very cool business model. That’s something that’s going to happen on the cloud. Innovation platform, I really like that business model. Snowflake, another example, coordination platform. That’s also something we’re already seeing on the cloud. We can point to Snowflake’s data intelligence as an example. And then what Snowflake is doing next is it’s basically combining a coordination platform with an innovation platform. basically complementary platforms, which if you look at my six levels of competition, at the very top of that, number one, fortresses, competitive fortresses, complementary platforms is one of my four favorite business models anywhere. So that’s kind of why I like Snowflake. But in theory, we will see the same thing in Alibaba Cloud, we’ll see the same thing at AWS. Like that would be the business model I look for is two complementary platforms, an innovation platform. plus a coordination platform. Okay, last one, because my voice is kind of going here. All right, third business model I like, vertical solutions. Highly specialized vertical solutions. Now, if you actually look at what Ali, I mean, if you look at Alibaba Cloud stuff, they publish stuff on what they’re doing. It’s a sea of complexity. Very hard to figure it out, in my opinion. One of the areas you can clearly see is their vertical solutions. And some of the ones they talk about, they talk about full cloud services for online education. And they’ll provide case studies and they point to TAL education group as a Chinese education group that is using this. That’s when, okay, you’re not just a general provider of innovation and coordination. You’re specialized to a certain industry and you’re going to provide sort of end to end vertical solution for everything you need. Now that’s not going to work in a lot of business because a lot of business is pretty general, but there’s a couple verticals where this really makes sense. Education is kind of interesting. Doesn’t knock me over. It’s kind of interesting. Financial services is really interesting because you’re going to need very specific architecture, security, and services to do full-end vertical solution for… financial services, banks, things like that. And if you talk to Huawei, they also talk about we’re a cloud provider, but they’re mainly doing infrastructure. They provide data centers, they do 5G connectivity, and then they do some edge devices, although not as much as they used to. But they will also point to vertical solutions that work across all of that. airports, railroads, or number two on the list is financial services where they provide very specialized services. So you hear kind of the same story from Alibaba Cloud and from Huawei in the area of vertical solutions. Public services is actually pretty interesting. Alibaba talks about this. They work with like Jijiang province on doing some sort of, you know, public service, traffic management. Jijing is the, you know, it’s near Shanghai based. Hanzhou is in Jijing, Alibaba is based in Hanzhou, right? So Hanzhou traffic is managed by an Alibaba solution. They’re smart cities thing. So they talk about sort of public services, municipal services, using DingTalk, which is their communication app. Government employees can use that, things like that. Pretty interesting. Manufacturing. tends to be a pretty interesting vertical solution. A lot of that is happening in China. There’s a lot of IoT. If you’re doing retail, you’re not doing a ton of IoT. If you’re doing online education, you’re not doing a ton of IoT. But if you’re doing steel manufacturing, you have very specialized IoT edge computing that has to tie in. So you get a more specialized solution. So anyways, vertical solutions is really interesting in my opinion in about five different industries where we’re going to see a lot of specialization and having an end-to-end solution adds a real benefit. And that’s a lot of what you hear about from Alibaba Cloud and Huawei. And Huawei Cloud is a competitor in this space, which I haven’t talked about. Anyways, those are kind of my three business models that I really pay attention to. Innovation platform, coordination platform, and especially a combination of an innovation and coordination And then about four to five vertical solutions. That’s kind of what I keep an eye out for. And you can find this on a regular basis. And then the two concepts for today, again, innovation platform, coordination platform. That’s the theory for today. And I think that’s it for the content. As for me, I’m back in California, seeing my family, which is nice. I was a little bit worn out. I was… been running around Brazil a lot. I’d been on the road for three months. I was kind of getting a little tired so I’m kind of happy to be back. Maybe you can tell I’m a bit more energetic today than I have been in the last week or so. I also got a COVID booster about two hours ago so I’ve been trying to get this podcast done in case it hits me like, I don’t know if this is like number four which is crazy, but just in case this knocks me out in a couple hours I figured I better get this done. So we’ll see how I’m doing. I don’t know, I don’t know. The first one wasn’t a big deal. The second one really took me out of action for a day. Third one not so bad. So yeah, I guess I’ll know in a couple hours how the fourth one is. Yeah, so we’ll see. So far I feel pretty good, but yeah, we’ll see what happens in a couple hours. Anyways, that’s it for me. I hope everyone is doing well. If you’re interested in the Asia Tech Tour, send me a note or if you have a company to recommend, please let me know and I’ll reach out to them personally. But yeah, that’s it for me and I will talk to you next week. Bye bye.
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