As the digital age surges forward, cloud computing has emerged as the new frontier in technology. By 2024, the global cloud computing market is projected to reach $550 billion, marking a 22.7% year-on-year growth. China's cloud service market, with a growth rate of 34.2%, is leading the charge. Amidst this storm, Kingsoft Cloud, a "tech-savvy" company rooted in gaming clouds, stands at the crossroads, grappling with the pain and opportunities brought by industry shifts. According to the latest IDC data, in 2024, Kingsoft Cloud secured a 3.2% market share in China's public cloud IaaS market, ranking sixth. While trailing behind industry leaders Alibaba Cloud (36.7%) and Tencent Cloud (17.8%), its 28.3% year-on-year growth rate surpassed the industry average by 6.5 percentage points.

This set of contrasting data aptly depicts Kingsoft Cloud's current position: a "veteran" in China's cloud computing market struggling to break through amidst giants. From its origins as a "tech pioneer" in gaming clouds to its evolution as an "all-rounder" in industry clouds, Kingsoft Cloud's transformation journey has been fraught with challenges. As competition intensifies, Kingsoft Cloud has failed to maintain its dark horse status, instead exposing weaknesses in technology, ecosystem, and strategy.

Technological Barriers in Distress

Once hailed as a "neutral cloud" champion, Kingsoft Cloud now finds itself like a ship losing steam in the deep waters of cloud computing competition in 2024. Its technological moat has eroded, and its ecosystem stands isolated. As industry competition shifts from single products to integrated "legion warfare" encompassing both technology and ecosystem, Kingsoft Cloud's differentiating advantages are being dismantled by the giants, while its own shortcomings are being magnified.

Firstly, the myth of neutrality has crumbled. Kingsoft Cloud once attracted internet companies with its promise of "not competing with customers," but this label has become a mirage in 2024. Alibaba Cloud, with its "being integrated" strategy, has positioned itself as an infrastructure provider, boasting over 100,000 partners. Tencent Cloud, through its "Thousand Sails Plan," has forged deep ties with 2,000 ISVs, building an extensive financial and retail-focused ecosystem. Huawei Cloud, leveraging government and enterprise channels along with its "Kunpeng + Ascend" hardware ecosystem, has witnessed its market share soar to 12.1%.

In contrast, Kingsoft Cloud lacks both the ecological pull of Alibaba and Tencent and the support of Huawei's government and enterprise resources. Its "neutrality" is but an empty slogan devoid of a technological foundation amidst the giants' ecological onslaught.

Secondly, and more crucially, core customers are accelerating their departure. Financial reports indicate that the revenue contribution of Kingsoft Cloud's top 10 customers plummeted from 45% to 32% in 2024, with ByteDance migrating its overseas business to AWS and Xiaomi turning to Huawei Cloud to jointly build an IoT platform. When "neutrality" fails to translate into customer loyalty, Kingsoft Cloud's moat becomes merely nominal.

Lastly, technological iteration lags behind. Amidst the wave of cloud computing transformation towards intelligence and scenario-based applications, Kingsoft Cloud's technological shortcomings are exposed. Its AI services remain at the stage of standardized tools like video processing and content review, neither offering a general large model akin to Alibaba Cloud's "Tongyi Qianwen" nor providing customized generative AI solutions. In edge computing, Huawei Cloud leads with its 5G base station layout and end-cloud collaboration capabilities, covering 300 edge nodes nationwide, supporting scenarios such as smart factories and autonomous driving. Kingsoft Cloud, however, has deployed only 50 nodes in first-tier cities, mostly focused on single scenarios like video live streaming, unable to meet the real-time computing needs of manufacturing and IoT. In 2024, its market share in the edge computing market was less than 3%, with industry reports criticizing it for having a "fuzzy strategy and single scenario".

Giant Hunting and Emerging Forces Surging

China's cloud computing market resembles a "Three Kingdoms" game without gunpowder. Alibaba Cloud, leveraging the technological barriers of its "Feitian" operating system, launched the fifth-generation Shenlong architecture in 2024, enhancing the pooling efficiency of 10,000-core computing resources to 92% and supporting ultra-large-scale deployments of single clusters with 100,000 nodes.

Tencent Cloud, on the other hand, unveiled the "Connector" strategy, leveraging WeChat and WeChat Work as traffic entrances to penetrate cloud services into small and medium-sized enterprises. In 2024, Tencent Cloud launched the "Thousand Sails Plan," providing free cloud resources to 100,000 SMEs. In the audio and video cloud domain, Tencent Cloud holds a 41% market share, with its TRTC real-time audio and video engine, while Kingsoft Cloud's share in this field stands at merely 8%.

Furthermore, under the giants' shadow, emerging cloud service providers are quietly rising with a "encircling the cities from the countryside" strategy. Leveraging the technical foundation of Douyin Volcano Engine, ByteDance Cloud introduced the "Cloud Native 2.0" solution in 2024, surpassing competitors in the video cloud field. It covers 47% of users in cities below the third tier, while Kingsoft Cloud's node coverage density in the sinking market is only 62% of ByteDance Cloud's.

International cloud giants are seizing the Chinese market with a combination of "technology + localization." Amazon Web Services (AWS) launched the fifth-generation EC2 instances in China in 2024 through a joint venture with SinoNet, enhancing computing performance by 45%. Its "Industry Solutions Store" offers over 1,200 industry applications spanning eight major sectors like finance and healthcare.

Kingsoft Cloud's international cloud service market layout lags behind. This technological barrier results in a 63% higher customer acquisition cost compared to international cloud giants when expanding multinational corporate clientele.

Cloud Top Turbulence, Life-and-Death Race

Faced with the triple dilemma of shrinking market share, giant strangulation, and technological lag, if Kingsoft Cloud aims to carve a path from the cracks, it must abandon the ambivalent stance of "wanting both" and reconstruct its competitiveness with the resolve to cut off one's own arm.

Firstly, abandon the frontal battle with giants in the general cloud market. Instead, focus on niche areas such as video clouds and content security. In scenarios like video processing, live streaming acceleration, and content review, Kingsoft Cloud still possesses technological accumulation and a customer base. By drawing inspiration from Twilio's communication cloud model, it can encapsulate video processing capabilities into standardized API interfaces, providing "out-of-the-box" PaaS services to the education, e-commerce, and pan-entertainment industries, forming differentiating barriers.

Secondly, activate shareholder resources. Construct a synergistic ecosystem of "cloud + terminals" and "cloud + content." As a "related party" of Xiaomi and ByteDance, Kingsoft Cloud has long failed to convert shareholder advantages into business. Addressing ByteDance's cross-border acceleration needs for overseas business, customizing a low-latency, high-stability content distribution network can not only solidify customer relationships but also penetrate the international market with TikTok's global footprint. This ecological binding of "taking customers as allies" is far more compelling than the empty slogan of "neutrality".

Thirdly, fill technological gaps through acquisitions and collaborations. Avoid being eliminated in the AI and hybrid cloud races. As Alibaba Cloud and Huawei Cloud reconstruct cloud computing value through self-developed large models, Kingsoft Cloud's actions in the AI field have stagnated. In 2024, its AI-related revenue accounted for less than 5%, and it lacked customized solutions. Drawing inspiration from Google Anthos' cross-platform management tools, launch a multi-cloud management and control platform compatible with AWS and Alibaba Cloud to attract mid-tier enterprise customers seeking cost-controllable hybrid cloud solutions but unable to afford the millions of dollars charged by giants.

In the cloud computing market of 2025, competition has shifted from a "scale race" to a "life-and-death elimination." Technology, ecosystem, and cost – any shortcoming in these areas can plunge players into the abyss. For Kingsoft Cloud, the once compelling "neutrality" narrative has faded. Whether it can shed the single label of "internet cloud" and reconstruct its competitiveness amidst the wave of AI and the industrial internet will determine its survival.

As the industry transitions from a blue ocean to a red ocean, it's not the strongest that survive but the fastest to adapt by making bold changes. What Kingsoft Cloud needs is not nostalgia for past glories but a self-revolution akin to scraping away poisoned bone and healing the wound. After all, in the world of cloud computing, stagnation means exit, and hesitation means death.