Functional subscription models are developing rapidly, and cloud resource subscriptions and SaaS application subscriptions have produced good benefits

Functional subscription is a universally recognized development direction of China’s platform enterprises, or will become the key to sustainable profit in the future. The first is to provide user enterprises with cloud server, cloud storage, virtualization environment and other cloud resource subscription services, through the way of on-demand payment, use of payment to promote the rational use of resources, expand the scope of profit. IDC data show that global shared cloud infrastructure spending in 2022 totaled $61.5 billion, and it is expected that shared cloud infrastructure investment will reach $66.1 billion in 2023, an increase of 7.5% year-on-year. Amazon, Microsoft, Alibaba Cloud, Google Cloud, Huawei and other IaaS providers have vigorously promoted infrastructure services such as servers, storage, and network resources through the “pay to use” model. The second is to provide user enterprises with MES, ERP, PLM and other SaaS application subscription services, with better user experience and higher user stickiness, improve revenue stability and predictability, and bring long-term repeatable revenue. For example, domestic software manufacturers such as Yonyou Network and Kingdee International have taken cloud-based services as a strategic focus of their enterprises, concentrated their efforts and resources on cloud transformation, and achieved rapid growth in revenue from subscription and paid services. By the end of 2022, the annual revenue of Kingdee cloud subscription service reached 2.14 billion yuan, an increase of 36.3%, and the annual revenue of UF Network cloud subscription service reached 2.04 billion yuan, an increase of 23.8%.

Data application models are blooming, and data-based derivative products promote platform value-added

Based on a large amount of data precipitation, platform enterprises innovate and explore a variety of value-added service models based on data. First, based on the massive data of the platform, it provides data analysis and value mining services for the government side, the industry side and the enterprise side, and innovatively explores a variety of value-added data service models such as “data + finance” and “data + consulting”. For example, Lemon Bean relies on the supply chain data assets accumulated by the platform to carry out risk control portraits and approve credit lines, providing enterprises with a full-line, pure credit working capital loan “lemon bean loan”. At present, “lemon Bean loan” has reserved more than 50 users, and the loan amount is expected to exceed 150 million yuan. Second, as a data concentration and sharing center, the platform can provide functions such as data market, transaction matching, payment and settlement, and promote the interaction between data supply and demand sides. The development potential of the platform-based data trading market is huge. In February 2023, the Beijing International Big Data Exchange Industrial Data Zone was established, indicating that the industrial data trading market is accelerating maturity, and the industrial data precipitated by the platform is expected to produce greater value.

Hinder the profitability of China’s industrial Internet platform

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Problems of model innovation and development

Although China’s platform enterprises have actively explored new profit models and made a series of innovative measures, the overall profit situation is still not optimistic. According to the scientific and technological innovation board strategic emerging industry classification on the iFind platform, under the industrial Internet and support services category, a total of 7 companies have released annual report data for 2022, of which 3 companies have a net profit of loss, and the maximum loss value reached 189 million yuan. As of June 30, 2022, the cumulative unmade up loss of the well-known domestic “double span” platform Root Internet was 1.546 billion yuan. The fundamental reason is that China’s industrial Internet platform is still lacking in terms of market share, service capability, user expansion and guarantee mechanism, which hinders the innovative development and landing promotion of the platform profit model.

From the perspective of market share, foreign platforms squeeze the profit space of Chinese platforms

First, in the field of research and development design, foreign platforms occupy a monopoly position in the domestic market. Taking CAD software as an example, in 2021, only Dassault Systemes, Siemens and Autodesk three foreign platforms will occupy 55.7% of China’s market share, and only the domestic market share of Zhongwang software exceeds 10%. Second, in the field of production control, China’s platform has certain technical shortcomings. Siemens, Schneider, GE, Rockwell and other foreign giants master core technologies such as PLC, have deep service capabilities in the field of industrial production control, and have occupied a dominant position in the market. China’s platform enterprises take the digital transformation of the service industry as the starting point, and gradually seize a certain market space in steel, equipment manufacturing and other industries, but they do not yet have the technical strength to directly compete in the field of production control depth. Third, in the field of enterprise management, the proportion of high-end market of China’s platform enterprises is insufficient. Domestic platform enterprises such as UF and Kingdee started from financial management and gradually transformed to the field of comprehensive and refined management of enterprises, and have a certain share in the domestic market. However, domestic platform enterprises have insufficient penetration in the high-end market of enterprise management, and competitive enterprises such as super-large enterprise groups and the world’s top 500 enterprises still tend to purchase the products of multinational companies such as SAP in Germany and Oracle in the United States.