Power of internet plus： Cloud Computing, Big Data and New Division of Labor Network

This article is excerpted from the latest report of Ali Research Institute "internet plus Research Report".

"the internet+The profound connotation of ".

Mark Wei Ze, the father of pervasive computing, said: The deepest technologies are those that are imperceptible, and these technologies weave themselves into daily life until you can’t find them. The Internet is such a technology, which is imperceptibly infiltrating into our lives. The so-called "internet plus" refers to the diffusion and application process of a set of information technologies (including mobile Internet, cloud computing, big data technology, etc.) based on the Internet in various sectors of economic and social life. As a General Purpose Technology, Internet, like power technology 100 years ago and steam engine technology 200 years ago, will have a huge, far-reaching and extensive impact on human economy and society.

The essence of "internet plus" is the online and data-based traditional industries. Regardless of online retail, online wholesale, cross-border e-commerce, fast taxi, and Taodian, the work sharing is to strive to achieve online transactions. Only when goods, people and trading behaviors migrate to the Internet can they be "online"; Only "online" can form "live" data that can be called and mined at any time. Online data is the most mobile and will not be confined to a certain department or enterprise as before. Online data can flow and exchange at the lowest cost between the upstream and downstream of the industry and the cooperative subjects at any time. Only when data flows can its value be maximized.

The premise of "internet plus" is the widespread installation of the Internet as an infrastructure. British evolutionary economist Carotta Perez believes that every major technological revolution has formed a technological-economic paradigm that is compatible with it. This process will go through two stages: the first stage is the rise of emerging industries and the extensive installation of new infrastructure; The second stage is the vigorous development and harvest of applications in all walks of life (20-30 years in each stage). This year marks the 21st anniversary of the Internet’s entry into China. Up to now, there are 650 million netizens and 500 million smartphone users in China. The progress of communication network and the wide installation of Internet, smart phones and smart chips in enterprises, people and objects have laid a solid foundation for the next stage of "internet plus".

The connotation of "internet plus" is fundamentally different from "informatization" in the traditional sense, or the Internet has redefined informatization. Before, we defined informatization as the process of continuous application and deepening of ICT technology. However, if the popularization and application of ICT technology do not release the fluidity of information and data and promote the extensive sharing and use of information/data across organizations and regions, there will be an "IT black hole" trap, and the benefits of informatization will be difficult to reflect. In the Internet era, informatization is returning to the essence of "information as the core". Internet is the infrastructure with the lowest information processing cost that human beings have seen so far. Internet has the characteristics of global openness, equality and transparency, which makes the huge potential of information/data suppressed in industrial society explode, transform it into huge productivity and become a new source of social wealth growth. For example, Taobao, as a commercial trading platform based on the Internet, has promoted the widespread circulation, sharing and docking of commodity supply-consumption demand data/information nationwide and globally: 1 billion commodities, 9 million merchants and more than 300 million consumers are connected in real time, forming a super online market, greatly promoting the efficiency and level of China’s circulation industry and releasing the potential of domestic consumption.

The Motivation of "internet plus":Cloud Computing, Big Data and New Division of Labor Network

The practice of "internet plus" has greatly changed the face of economy and society, and its inexhaustible power comes from three aspects: first, the formation of new information infrastructure; The second is the loosening of data resources; The third is the transformation of the division of labor based on the first two aspects. The source of internet plus’s power

　2.1Internet plus’s Infrastructure: Cloud Network.

The normal operation of economic and social activities depends on the supporting function of infrastructure. With the accelerated transformation of economic form from "industrial economy" to "information economy", the great changes in infrastructure are increasingly evident.

In just a few decades, the birth and popularization of "Internet" has been upgraded to "internet plus", a new revolutionary force, and the technological boundary has been constantly expanding, which has led to great changes in infrastructure. Only by vigorously improving the level of new information infrastructure can "internet plus" gain an inexhaustible source of power and show its power in economic and social development.

The new infrastructure that internet plus relies on can be summarized as "cloud, network and terminal".

"Cloud" refers to cloud computing and big data infrastructure. The further improvement of productivity and the innovation of business model all depend on the ability to use data, and cloud computing and big data infrastructure, like hydropower, open the door for users to use computing resources conveniently and at low cost.

The "network" not only includes the original "Internet", but also extends to the field of "Internet of Things". The carrying capacity of the network has been continuously improved and the added value has been continuously tapped.

"End" refers to personal computers, mobile devices, wearable devices, sensors and even applications in the form of software that users directly contact. "End" is the source of data and the interface of service provision.

The new information infrastructure is being superimposed on the original agricultural infrastructure (land, water conservancy facilities, etc.) and industrial infrastructure (transportation, energy, etc.), and it is playing an increasingly important role.

1. Strong breakthroughs in cloud computing and big data infrastructure.

In the construction of "cloud" (cloud computing, big data) infrastructure, represented by "Alibaba Cloud", China’s Internet companies have realized core technologies based on independent research and development to provide general cloud computing services. Whether it is in the advanced technology, safety and economy, it is in the leading position in the world, and it is a leader with Amazon and Google.

The construction of cloud computing and big data infrastructure in China is exerting great economic and social value;

Strengthened the professional provision level of computing resources and improved the production efficiency of enterprises;

Transform the "computer+software" model led by international IT giants, which originated from the "industrial economy", into the "cloud computing+data" model that adapts to the characteristics of the "information economy";

It has promoted the development of "Internet" (Internet of Things, mobile Internet and other technologies and industries) and incited China’s market potential and unlimited creativity in "end" (mobile devices and software applications);

It plays an increasingly important role in data storage, processing and analysis, thus becoming the nerve center of society, and working together with the Internet of Things and the mobile Internet to create system-level intelligence;

Breaking the monopoly of large enterprises in computing power, thus becoming a hotbed of innovation and entrepreneurship for small and medium-sized enterprises in this era;

Promote traditional enterprises to embrace the Internet and accelerate the transformation of traditional industries;

Strengthened the efficiency of government affairs and improved the ability of social governance;

The development of "cloud computing" technology with independent intellectual property rights has safeguarded national economic security;

Help to reduce energy consumption and help sustainable development.

2. Rapid penetration of Internet and Internet of Things infrastructure.

According to the 34th Statistical Report of China’s Internet Development by China Internet Network Information Center (CNNIC), as of June 2014, the number of Internet users in China reached 632 million, including 527 million mobile phone users, and the Internet penetration rate reached 46.9%.

The Internet of Things is to equip sensors to various real objects, connect them through the Internet, and then run specific programs to achieve remote control or direct communication between things. Radio frequency identification tags (RFID), sensors, two-dimensional codes, etc., are connected with wireless networks through interfaces, thus giving objects "intelligence", which can realize communication and dialogue between people and objects, as well as between objects. Supported by the emerging "cloud computing, big data" services, the development of the Internet of Things will enhance the problem of lack of capacity in data storage, processing and analysis in the past and glow with new vitality. According to IDC research report, the global Internet of Things solution market will grow from $1.9 billion in 2013 to $7.1 billion in 2020. The global installed capacity of the Internet of Things will grow at a compound annual rate of 17.5% from 2013 to 2020, reaching 212 billion units.

3. Smart terminals and APP software applications have sprung up everywhere.

With the help of cloud computing, big data facilities and application software services, user equipment represented by intelligent terminals is becoming an important source of big data collection and an important interface for service provision.

China has become the absolute dominant force in the growth of global smart terminals, and has led the intelligent evolution of the global mobile market. In 2012, China shipped 258 million smartphones, accounting for more than one third of the world’s total, and the growth rate of 167% far exceeded the global level, surpassing the sum of all previous years in one fell swoop. In 2013, China’s smartphone shipments reached 423 million units, and its global share contribution approached 50%. In the second quarter of 2012, the share of smart phones in China exceeded that of feature phones by 52%, leading the world to complete the historical replacement for a whole year (the world surpassed 50% for the first time in the second quarter of 2013 to reach 52%), and by the fourth quarter of 2013, the proportion of smart phones newly shipped in China had reached 75%.

With the intelligent terminal as the access interface, Internet content has gradually changed from a web page dominated by portal websites to colorful APP applications. APP applications are more supported by cloud computing services, and driven by rich data in the background, the threshold for development and release is lowered, and creativity is greatly stimulated. By the end of 2013, the download scale of Apple App Store and Google Play applications both reached 50 billion times, and the application scale both exceeded 1 million. Tencent, Ali, Baidu and other companies are trying to build a super APP platform in their core application fields by deeply exploring the capabilities of mobile instant messaging, mobile payment and maps.

4. The main body of infrastructure investment turns.

With the rapid popularization of mobile Internet, who brought this kind of infrastructure investment? The answer is hundreds of millions of ordinary users. There are 632 million netizens in China, 83.4% of whom use mobile Internet (CNNIC’s data as of June 2014). According to the 1000 yuan of each mobile phone and the replacement of a mobile phone every two years, people’s investment in mobile devices is huge, which can reach the trillion level in a few years. Similarly, cloud computing infrastructure is also built and operated by private enterprises such as Alibaba, Tencent, Baidu, etc., and it is in the forefront of the world in terms of user scale and technical level.

In this way, the investment in new infrastructure will be dominated by the government or large state-owned enterprises in the past, and gradually turn to private enterprises and individuals. Due to the change of investment subject, the service mode and control right have also changed significantly. Private enterprises engaged in infrastructure services must continue to innovate to expand their scale and obtain potential benefits. The consumer’s dominance is enhanced, and "voting" with the equipment in his hand directly determines the life and death of the enterprise. Therefore, the governance mode of information economy will also change from the original centralized control to relying on mass innovation and common governance.

2.2 "internet plus" new factors of production: data

The activities of human society are directly related to the creation, transmission and use of information (data). The continuous breakthrough of information technology is to gradually break the tight coupling relationship between information (data) and other elements and enhance its mobility, so as to enhance the scope and value of use, and ultimately improve the operational efficiency of economy and society.

Information (data) has become an independent factor of production. After nearly half a century of informatization, the extraordinary development of information technology has contributed to the explosive growth of information (data) volume and processing capacity, and human economy and society have also entered the "big data era".

In December 2012, IDC released the research report "Digital Universe in 2020: Big Data, Greater Digital Shadow and the Fastest Growth in the Far East". The digital universe is a measure of all digital data generated, copied and utilized all over the world in one year. From 2013 to 2020, the size of the digital universe will double every two years. In 2012, China’s total data volume accounted for 13% of the world, and it will increase to 21% by 2020.

As mentioned above, in addition to driving business as an essential component (namely, Data-Driven Application, such as financial transaction data and e-commerce transaction data), the development of Data Products (namely, data product, which creates new value through the expansion of data usage, such as accurate online advertising) has opened up a new source for grabbing data wealth. The accumulation, exchange, analysis and application of massive data in the economic field have produced unprecedented insights and knowledge, greatly promoted the improvement of production efficiency, and provided extraordinary power for fully tapping the value of data elements.

2.3 "internet plus" division of labor system: large-scale social collaboration.

The construction of information infrastructure and the improvement of capacity have accelerated the penetration of information (data) elements in various industrial sectors, directly promoted the significant reduction of product production and transaction costs, thus profoundly affecting the economic form.

The information technology revolution provides necessary, cheap and efficient information tools for division of labor and cooperation, and also changes consumers’ information ability. Their roles, behaviors and strengths are undergoing fundamental changes: from being ignorant to being well informed, from being scattered and isolated to group interaction, from passive acceptance to active participation, consumers’ potential diversified needs are stimulated, and this major change is taking place in the market environment.

The pattern of production and consumption centered on enterprises has changed into a brand-new pattern centered on consumers. The business strategy of customer-oriented and demand-oriented forces the organizational form of enterprises to change accordingly. New forms of division of labor and cooperation began to emerge.

"Small but beautiful" is the normal state of enterprises: because of saving information costs and reducing transaction costs, outsourcing and other methods are more convenient, enterprises do not have to maintain a huge and bloated organizational structure, inefficient and redundant value chain links will die out, while new high-efficiency value links will rise, organizational boundaries will shrink, and small enterprises will become the mainstream.

Production and consumption are more integrated: as a flexible resource, information (data) shortens the circuitous and inefficient production chain, promotes the rise of C2B mode, and production and consumption will be more integrated.

Real-time collaboration is the mainstream: the improvement of technical means, the acceleration of information (data) opening and flow, and the corresponding changes in production process and organization. The production style has changed from the typical linear control of "industrial economy" to the real-time collaboration of "information economy".

More diversified employment channels: information technology provides the possibility of flexible working methods, and the employment situation is diversified. Under the condition of "information economy", due to the lower threshold of communication and cooperation, the improvement of evaluation and credit system, the value of professional skills is further highlighted, personal ability can be fully exerted, and the flexibility of employment is further improved. The younger generation can fully arrange their own time and work place through the internet and outsourcing, and provide services for many enterprises, such as translation, design, customer service, etc. The employment methods and organizational forms of enterprises, people’s employment methods and income structure will all change.

To sum up, the new information infrastructure ("cloud+network+terminal"), new production factors (big data) and new division of labor network (large-scale, socialized new division of labor form) have provided inexhaustible power for the release of "internet plus" energy, reflecting the strong force of "information technology revolution and institutional innovation" to promote "productivity jump". The "internet plus" action will aim at consolidating the new information infrastructure, upgrading the original industrial and agricultural infrastructure, innovating the Internet economy and infiltrating traditional industries, thus opening up a new path for China’s economic transformation and growth.