Fu Xunxun, Glenn Solomon: The change and unchanging of the corporate Internet


Editor’s Note: This article is from Jiyuan Capital, and 36 is authorized to be released.GGV Evolving Enterprise is the GGV Enterprise Internet Transformation Conference, which aims to invite leading companies in the field of enterprise services to provide an overview and comparison of Chinese and American enterprise service industries, opportunities and challenges of corporate Internet and industrial Internet, and changes in new technologies to traditional industries.Do deep sharing.GGV Evolving is GGV Jiyuan Capital’s most important brand event of the year, aiming to invite leading figures in the industry to deep share and industry exchanges on topics of industry concern.Since 2017, GGV Jiyuan Capital has held GGV Evolving Lifestyle and GGV Evolving Plus conferences in China.The following is a wonderful speech by GGV Jiyuan Capital Management Partner Fu Jixun and GGV Jiyuan Capital Management Partner Glenn Solomon at the 2019GGV Enterprise Internet Transformation Conference, which was organized by the cloud.Fu Jixun: Good morning everyone, welcome everyone to the annual Evolving event.Our theme this year revolves around the corporate Internet and Evolving Enterprise, and today I am doing a simple opening introduction with my partner Glenn Solomon.Glenn Solomon: Welcome to GGV.I am a partner of GGV. I am very happy to participate in the Evolving event in Beijing today. We generally invest in science and technology and the market is constantly developing. We have seen many opportunities for companies to seize such opportunities.So I came here today and I am very happy to discuss such a topic with you.Fu Jixun: GGV is a global organization. Now there are 5 offices and a management scale of 6.2 billion US dollars. We are not the same as many organizations. We are born from a global team, with a global perspective.Our local understanding and wisdom, to find good companies, good entrepreneurs, and work together.Before and after, we invested in more than 60 unicorn companies, nearly 40 IPOs, and nearly 70 mergers and acquisitions.Glenn Solomon: What happened to the market now, why is there so much value?We consider that there are three factors, and I think that every factor can create trillions of value.The first is the global cloud computing trends, such as Amazon and Amazon cloud services, as well as Google, Microsoft, we found that they are more than trillion dollars, it is estimated that these three companies will have 60 billion dollars in revenue, and their growthThe magnitude is over 20%, which is very shocking.Ten years ago, our cloud services were not so developed, but now many of our software can communicate with each other on the cloud platform, and these service providers will provide more services, so that the platform can be more efficient.We are also increasingly using the cloud as a solution.Fu Jixun: Just mentioned the cloud computing migration, it is a global trend, Alibaba is now the leader in the market, not only in China, but also in the world.Moreover, the development of this service is very fast, and it can also make the Chinese market continue to develop. Therefore, I think that the rapid growth of the market is a trend, and the migration of the cloud is indeed happening, which is changing our lives.Glenn Solomon: The second trend we also see, we can also create trillions of value, software-level services, that is, SaaS, which has been around for more than a decade, and now it is growing very fast becauseCloud services can further free up more SaaS companies, and their costs are steadily declining, because with the advent of the cloud, the cost of using the cloud is getting lower and lower.So I think SaaS is global, including many companies using SaaS, and taking advantage of this opportunity to make this SaaS company bigger.These companies are constantly growing. There were only 19 SaaS companies five years ago. Their market capitalization reached 1 billion, but now there are 30 companies, 11 of which are more than 20 billion dollars.In addition to cloud computing, we found that the transition of SaaS is also a trend. The third trend is a market of trillions of value, that is, many companies have now become technology companies, they will use a variety ofSoftware and development.So we found that this software has also become a core in the industry, we found that developers are looking for tools to make them more efficient.So we are now investing in software developers and developers, one of which is Open Open Source, which allows them to use the business model.What developers really like is an API-based company, and now GGV is also paying attention to this investment.And we are using new technology, we now have a bottom-up approach, and our invested companies will benefit a lot from emerging technologies.We have a lot of opportunities in this area. We are building this modern SaaS. I think the next generation of companies will have a global market. They will benefit a lot from cloud migration and they will grow very it will bring a lot of benefits to the previous generation of companies, and the performance will tell you about the situation in China.Fu Jixun: Let me introduce the situation of Chinese corporate internet. First, let’s compare the Internet market of TO C, the market value of China’s top TO C Internet company. If you look at the heads of these companies, compare these with the US, we areOne-half of them.We use SaaS to make a market estimate. Look at the market size and volume. The true SaaS market in China is probably less than 20 billion today, but it is still very small.On average, each company spends 30 times more on SaaS per year than the US.This also means that in the future development of China’s market, if SaaS spending reaches the level of the United States, the market space is still 30 times, or a larger imaginary market.Looking at another data, that is, IT spending, China is about 1 trillion yuan in 2018, which accounts for only 1.2% of China’s total GDP. Let’s look at the US IT spending, with its scale and body today.In terms of quantity, it accounts for 5.3% of GDP. Therefore, the level of IT consumption in China today is the United States in the 1990s, so we still have a lot of room for growth.Why is it now?I think there are some reasons for the macro market. It is well known that the labor cost has risen. In the past ten years, the average annual growth rate is 10%, and the labor force in China is gradually decreasing.By 2018, the data we have seen is that the labor force is decreasing every year. The new labor force is different from the past. They are after 95, and then after 00, they are aware of the Internet and the mobile Internet.The perception of software consumption is higher.So the next trend, the penetration rate will lead to the acceleration of enterprises when using the Internet, mobile Internet, and cloud services.Let’s look at the comparison between China’s industry and the United States. Among all the Chinese companies, the number is used to see that about 20% are engaged in the circulation industry, which is much higher than the US’s 5%.Most of China’s industries are actually in the flow of goods, and the efficiency of the industry is not high.This means that the reconstruction of the industrial Internet is a great opportunity to shorten the chain of transactions, reduce the asymmetry of information, and allow data and technology to make the circulation more valuable. This is also the characteristics and advantages of China.The world’s factories, our hardware development capabilities, IOT’s trial and error capabilities are much higher than many overseas markets.Therefore, in the future N years, we should be at the forefront of the world in the development of sensors, chips, drones and robots.I think that the future enterprise service is not just software, but hardware and software.Glenn Solomon: There are many opportunities for companies that have never been seen before, including our GGV will also invest in some industries.Going a step further, we now have a lot of investment opportunities, including API-based companies that can make developers more efficient and have a very good model of this consumption.Our partners will also pay more attention to the growth of Chinese companies. This is a very large volume in the global economy. Now the migration of cloud services is constantly reducing costs.So I feel that developers are constantly investing in open source and software to make it easier for everyone to use open source.There are a lot of big companies that are paying more and more attention to software, and there will be a lot of business to develop.Fu Jixun: Artificial intelligence and cloud services are driving the development of software, and also the transformation of many industries, including vertical transformation.I would like to add that the vertical differentiation that has just been mentioned with the industry is what China needs. It is also undergoing reforms in China. We are combining personal verticals and solutions with software and hardware.In terms of software, I think it is also a very good proposal. We are also very concerned about the Chinese market, including IOT. It is also a service, which is also a very big trend.We will continue to invest in these areas, and we are very optimistic about the future of these companies..