Chinese tech titan ByteDance has confirmed that its enterprise unit, Volcano Engine, will roll out new cloud services on December 2. Although the company did not disclose the exact details of the new product, its website suggests that it may concern distributed cloud services.
Volcano Engine was launched by ByteDance – the massive Chinese parent company behind globally popular short-video app TikTok – in June last year. The business unit offers various enterprise technologies, including cloud services.
Recently, Volcano Engine increased its registered capital from 10m yuan (US$1.57m) to 1bn yuan (US$160m), Chinese media reported. Following this latest capital injection, the sub-unit hopes to become “the fourth big cloud provider in China”, it was reported.
At present, the big three dominant players in China’s cloud market are Alibaba Cloud, Tencent Cloud and Huawei Cloud. Among them, ecommerce giant Alibaba is the biggest, with approximately 60% of the domestic market. According to GlobalData’s sector scorecard, it currently ranks sixth in the global cloud industry, closely followed by Tencent.
In September, Chinese media reported that ByteDance had established a new automotive cloud business. The company was also reported as saying that it hoped to surpass its domestic rival Tencent by 2025. As part of its expansion plans, the Beijing-based company recruited experts from cloud giant Amazon Web Services and Chinese ecommerce goliath JD.com.
Distributed cloud is a public cloud computing service that enables operation of public cloud infrastructure in multiple different locations. Rather than only one cloud provider’s infrastructure, it provides options for services on premises, in other cloud providers’ data centres or in third-party data centres or colocation centres. It manages everything from a single control plane and presents a strong foundation for edge computing.
ByteDance also confirmed previously that Volcano Engine would offer other technologies to enterprise clients, such as its successful recommendation algorithm, data analysis and artificial intelligence.
Even though it is secure as the world’s only hectacorn – a private company valued at more than US$100bn – ByteDance has experienced some turbulence recently. Earlier this month, it announced a massive six-way restructuring which will see the company split into the following sections: domestic media, vocational training, enterprise solutions, work collaboration technology, gaming and overseas services.
On top of that, the company’s founder, Zhang Yiming, announced in May that he would step down as CEO to focus on “longer-term initiatives”. Half a year later, he also decided to step down as Chairman.
Currently, the largest chunk of ByteDance’s revenue is derived from consumer-facing products such as Douyin (China’s equivalent to TikTok) and its news aggregator app Toutiao. Following Beijing’s ongoing, intense crackdown on consumer-facing technology, growth prospects for these businesses are likely to weaken. ByteDance has therefore started venturing into other industries such as enterprise services.
The company also has a significant presence in China’s edtech sector, another industry badly affected by China’s crackdown. It recently had to lay off over 1,000 employees in its online tutoring unit. It had already cut its in-house Pre-K tutoring sector in half during August.
In April, the company announced that it was looking at Hong Kong and New York for an initial public offering (IPO). However it was reported last month that any plans to take the company public were suspended until at least late 2022. ByteDance is currently ranked number one worldwide on GlobalData’s social media thematic scorecard.