The Future of the Industrial Internet
Plus: Alibaba's contributions to China's SOE Cloud
Private involvement in Hubei’s state-owned enterprise cloud
At the end of last week, Alibaba Cloud and Inspur were announced as the winners of their respective bids for the first phase of a project building Hubei’s provincial state-owned enterprise (SOE) cloud platform. Together, their bids totaled just under 9 million yuan (with Alibaba taking a slightly larger chunk of 4.7 million).
Described as “supporting and driving the digital transformation of Hubei’s state-owned assets and enterprises,” the project consists of the construction of the platform and its accompanying products and services.
The construction of China’s state-owned enterprise cloud1 was spurred in part by a 2020 announcement by the State-owned Assets Supervision and Administration Commission of the State Council (SASAC) calling for increased digitalization of China’s SOEs. While the concept of an “SOE cloud” was not explicitly named, enterprises were urged to build out “platforms” for hosting big data and services, to construct modern technological infrastructure, and to “accelerate the formation of a conglomerate-grade platform powered by digital technology.”
The SOE cloud, in short, refers to the regional cloud platforms constructed through SASAC investment to bring SOE data together under centralized systems for management.
While one might expect these cloud platforms to be built by SOE in the IT industry (similar to China Telecom’s role in SASAC’s national cloud project), Alibaba Cloud’s role in this project makes a point for the involvement of private companies in the construction of the SOE cloud.2
Sources
上云无忧：阿里云中标湖北省国资云建设项目！
Baidu Baijiahao: 谁说民营云厂商不能参与国资云建设？阿里云中标湖北省国资云项目
SASAC: 关于加快推进国有企业数字化转型工作的通知
Thoughts on the industrial internet’s future
Zhang Jianfeng, president of Alibaba Cloud Intelligence, discussed the future development of the industrial internet at this month’s World Internet Conference in Wuzhen. Some key takeaways from Zhang’s talk:
The industrial internet will require a robust “application ecosystem” (应用生态) to reach its full potential.
The construction of this ecosystem will require mass participation, and it will benefit from the spread of low-code software. Zhang believes that assembly line workers will increasingly be responsible for the development of these tools.
The industrial internet’s development will begin with factory equipment, which can be digitized through AIoT (artificial intelligence of things) tech.
Zhang named several examples of the benefits of industrial digitalization:
State-owned auto manufacturer FAW Group, based in Changchun, has brought over 20,000 IoT-powered factory devices online. This has allowed for the digital twinning of the full manufacturing process.
Another example was the Port of Ningbo-Zhoushan, regarded as the world’s busiest port. Thanks to the port’s digital brain, which is capable of intelligently allocating berths to incoming ships, the port was able to save around 1 billion yuan in berth construction costs.
Zhang also stated that the industrial internet could expand into other industries. He cited Alibaba Cloud’s contributions to building the infrastructure for a service and transaction platform for PipeChina (aka China Oil and Gas Pipeline Network) as one example.
Echoing his earlier prediction about low-code development, Zhang mentioned that 90% of the 9,000 low-code developers at FAW-Volkswagen are assembly line workers.
The Paper quoted several other notable figures who spoke on this topic at the conference.
Chu Jian, founder of automation company SUPCON:
There are more than 3 million manufacturing companies in China. At a scale of this magnitude, the industrial internet must be built through the low-cost, large-scale spread of applications. For some companies, successfully implementing smart technologies and modernization is easy enough; it just requires some investment. For 3 million companies to achieve digitalization, the implementation of smart technologies, or Industry 4.0,3 on the other hand, is quite difficult...
[With many companies in the manufacturing industry unable to turn significant profits], it isn’t realistic to invest a great deal into digital transformation. It should be carried out by promoting the industrial internet through forms such as industrial software.
Yu Xiaohui, head of MIIT-affiliated think tank CAICT:
In the past, we used cloud migration and platforms to provide small-to-medium enterprises [SMEs] with low-cost tools for digitalization and informatization. This was the mainstream method. Further expansion will require more than low-cost digitalization tools; what’s more important is how to obtain the crucial resources for development: purchase orders, capital, and supply chains.
Yu Xiaohui added that the transformation driven by the industrial internet would have an important impact on SMEs in particular, as it would integrate them into a comprehensive socialized production network, allow them to keep pace with digitalization, and help transform scattered SMEs into strong industrial clusters.
Sources
Alibaba Cloud (WeChat): 阿里云张建锋：工业互联网应用将更多由生产线工人开发
The Paper: 阿里云智能张建锋：工业互联网应用或将主要由生产线工人开发
China’s SOE cloud was touched on very briefly in this previous Cloudology article about SASAC’s “national cloud” project (国家云).
The omission of Inspur here is intentional. While Inspur is not officially a state-owned company, SASAC is a controlling shareholder.
“Industry 4.0” refers to a developing industrial paradigm characterized by automation and interconnectivity — essentially the type of transformation that these WIC speakers are referring to.