The closure of domestic online storage has made users worry about where the next outlet will be.

【51CTO.com original article】Since last year, relevant national departments have launched a campaign to regulate online disks. Sina Weipan, UC Cloud Disk, Kuaipan, and Huawei Cloud Disk all announced their closure and no longer retaining data at the end of April this year. On October 20 this year, 360 Cloud Disk announced its decision to stop personal cloud disk services and then transform into enterprise cloud services. The official reason given was that "illegal elements have repeatedly used 360 Cloud Disk to store and spread illegal files, infringe on copyrights for profit, spread obscene and pornographic information, and other illegal and criminal acts." In an instant, millions of users became data victims.

At the same time, Baidu Netdisk and Tencent Weiyun both spoke out through Weibo:

Although entrepreneurs are not afraid of being slapped in the face when they speak, everyone knows it clearly when they think of 360's solemn promise.

The first letters of the names of these three movies together are - "Will Not Close"

In the first half of the year before 360 ​​Cloud Disk announced the discontinuation of its personal cloud disk service, seven of the top ten online storage services in China closed or stopped some of their functions. Everyone was panicked, as if they could be affected at any time.

The wave of online storage shutdowns has shifted from scattered to concentrated, affecting almost all online storage services in China, and broke out in the first half of 2016, shocking the industry and users. The real reason is that online storage services are facing the dual dilemma of increasingly stringent content review policies from regulators and the lack of effective profit models to support personal services.

1. Policy level

On March 2 this year, the head of the National Office against Pornography and Illegal Publications stated that in order to effectively purify the online cultural environment and curb the spread of obscene and pornographic information for profit using cloud disks, the National Office against Pornography and Illegal Publications, the Central Cyberspace Affairs Commission, the Ministry of Public Security, the Ministry of Industry and Information Technology, the State Administration of Press, Publication, Radio, Film and Television and other five departments jointly issued a notice to launch a comprehensive special rectification campaign to combat the use of cloud disks to spread obscene and pornographic information, focus on combating the illegal use of cloud disks to spread obscene and pornographic information, and announced 6 cases of using the sale of cloud disk (net disk) accounts and passwords to spread obscene and pornographic information for profit, including cloud storage tools such as 360 Cloud Disk, 115 Net Disk, and LeTV Net Disk.

Baidu Netdisk identifies illegal video files based on the feature code of the video file (i.e. MD5 or sha1).

Of course, the review of online disk content and the punishment of pornographic and other illegal information is not the first special action launched by the regulatory authorities. Since March 2015, the National Office for Combating Pornography and Illegal Publications has deployed the "Net Clean 2015" special action to combat online pornographic information. However, after five months, the National Office for Combating Pornography and Illegal Publications has organized the "Cleaning the Internet 2015" departments in Beijing, Shanghai, Zhejiang, Jiangsu, Guangdong and other places to interview a large number of online disk companies such as LeTV Cloud, 360 Cloud Disk, Cool Disk, Huawei Cloud Disk, 115 Cloud Disk, UC Cloud Disk, and Thunder Quick Disk, requiring them to delete harmful information and make immediate rectifications. Administrative penalties have been imposed on online disk companies with serious circumstances. The high-pressure crackdown will continue, and efforts to rectify online pornographic information will be further intensified.

Later, in the "Net Cleaning 2014" campaign, the Beijing Municipal Cultural Market Administrative Law Enforcement Corps also interviewed relevant Baidu company officials in accordance with the law in response to the problem of some Baidu Netdisk accounts spreading obscene and pornographic information. However, Baidu Netdisk only made corresponding rectifications and did not shut down the cloud storage service.

Jiang Yifan, an analyst at iiMedia Research, believes that the embarrassment of online disk companies in conducting content review is that it is piracy and pornographic content that stimulate the increase in the number of online disk users. "These users are actually not very loyal and are not willing to pay. At the same time, once laws and regulations increase the rectification of pirated and pornographic content on online disks, the risk cost of violations by online disk companies themselves will increase greatly. It is not worthwhile to pay a greater risk of violation for these low-value users."

Although some people point out that profitability is the real reason for the closure of domestic cloud storage, it is an indisputable fact that major cloud storages are weak in regulating content. On the other hand, foreign cloud storages such as Dropbox, Google Drive, and iCloud are still moving forward, so how do they regulate the content of their cloud storages?

Dropbox uses PhotoDNA, a tool for scanning illegal images, to combat piracy and pornographic content through file tagging. Every time a Dropbox user uploads a file, the server will encode it and eventually generate a unique "fingerprint". When Dropbox receives a notice from a copyright owner requesting copyright protection, it will compare the "fingerprint" of the copyrighted file with the "fingerprint" of the user's uploaded file. If there is an overlap, the pirated content can be immediately blocked.

According to a report by American media NBC, under US law, cloud service providers are obliged to promptly remove known illegal files. Of course, problems that can be solved through technology are not a problem. The main thing is whether all companies actively scan for illegal files.

In addition to the reasons of rampant piracy and pornography, the large number of free individual users of online storage has led to huge investments in servers, bandwidth and manpower. With high operating costs and a low proportion of paying users, there is a lack of a suitable profit model and it is difficult to monetize. This has also become one of the important factors for major online storage providers to weigh in their choices.

2. Profitability

After the popularity of foreign box and Dropbox, many Chinese versions of Dropbox also started to follow suit, which led to the Chinese online storage market going further and further down the distorted path. The most representative one is Everbox CoolPan, which successfully raised tens of millions of dollars in a short period of time and was acquired by Alibaba. However, due to its low market share and insufficient income, CoolPan closed its personal user online storage service on October 10, 2015, which may have made Alibaba's tens of millions of dollars investment go down the drain.

Why is it that profitability is a long-standing problem for almost all domestic online storage services? Let’s analyze some of the profit models of domestic online storage services:

Network disk capacity: This is a common and most simple and crude sales method, which is to expand capacity through different prices. However, after the network disk war, if you don’t provide 1TB of free space in China, you are embarrassed to promote it to users, and no one will spend money to buy capacity.

Downlink speed: Selling downlink speed is simply a rogue practice. The only way to enjoy full-speed download is to upgrade to Super VIP. For users who use network disks, downlink data is a must. Even if you have a bandwidth of 1000Mbps, you can't do anything if the network disk implements speed limits. I believe that no one only uploads files but never downloads them, right? However, the devil is always stronger. There are speed limit cracks on network disks and low-priced memberships sold everywhere on the Internet. Who would buy them through formal channels?

Hard advertising: The essence of a network disk is sharing, which is also its greatest charm. I believe everyone has experienced that when you search for resources and jump to the download page, you need to go through countless advertising pages before you reach the download address. But it is understandable. After all, it is free, and people can't help but make some extra money through other channels. However, the effect is minimal, the experience is poor, and the expenses of the network disk server and broadband are very large, which is not enough to cover the income.

Value-added charges: Similar to the model of Dropbox, a well-known overseas online storage service, users are attracted to pay by improving their own product features, such as synchronization, dual data backup, offline download, compressed package preview, security scanning, etc. However, it is obvious that individual users do not pay for it. There is only one reason, that is, the needs are different. Domestic users do not attach the same importance to the value of data as foreign users. As long as the data can be stored and shared, it is completely OK.

Netdisk search: This function is so tempting. If you share the contents of the netdisk, you should know that many resources are basically not available for download outside (you know), but the data on the netdisk is private. It is a rogue behavior to make the content public without the user's permission. However, some netdisks open the content shared by users for search, but the resource coverage is too small, and many resources are fake, even advertisements, viruses...

The deformed domestic payment market

When talking about domestic cloud storage, Cheng Yuan, the founder of Yifang Cloud, believes that Yifang Cloud is of the same type as foreign box/dropbox/google docs, but Yifang Cloud mainly helps enterprises to share team files, collaborate, and provide collaborative editing and other capabilities. However, the domestic users of cloud storage have not yet reached the level of rigid demand, and the payment habits are poor. The market demand foundation cannot support the free value-added business model. As cloud storage, first of all, the components are very expensive. The business of promoting free storage to individuals does not have a very mature business model to support large-scale revenue. Another reason is that the abnormal competition has not formed a subversive business model innovation in China. For example, many domestic entrepreneurial cloud storage can obtain a small number of paying users, but the health of such business has been completely pushed into the abyss by the entry of BAT.

Although domestic online storage is basically copying the profit model of foreign online storage, people cannot see the difference between the domestic network environment and that of foreign online storage, and the cost of online storage is still high. Most companies start to provide cloud services by referring to Dropox. As the first company to enter the enterprise-level cloud storage, DropBox now has more than 39 million registered users and more than 50,000 paid users of organizations. DropBox is famous for its almost perfect user experience, low operating costs and small marketing and big gains. Perhaps seeing the new world opened by Dropbox, almost all domestic Internet companies entered the cloud service at the first time.

The demand base for Dropbox in the United States did not exist in China a few years ago. Around 2010, the information maturity of American users was incomparable to that of Chinese users. In the United States, there were many users, especially white-collar workers and students, who had a rigid demand for accessing, syncing and sharing files anytime and anywhere, and they were willing to pay a certain fee for it.

In China, firstly, the payment habits are very poor. In addition, the user base with such strong demand and willingness to pay is an order of magnitude smaller, accounting for less than 0.1%. The market demand foundation cannot support a business model such as free value-added.

Cloud storage is expensive and has no large-scale revenue support: Compared with local storage, although the unit hardware cost of cloud storage is lower due to economies of scale, you need to understand that cloud storage often requires high storage redundancy. Users store one copy and service providers often need to store three backups. With such a large amount of free storage, who can continue to support such high costs (according to reports, Baidu Cloud's monthly storage costs are tens of millions).

The abnormal competition did not bring about disruptive business model innovation. It is undeniable that BAT launched personal cloud storage mainly because of the huge number of user binding rather than revenue considerations, but the actual result is that on the one hand, the market soil has become acidic to the point where startups cannot survive, and on the other hand, in recent years, the giants have not been effective enough to find other business innovations that rely on huge amounts of free users and traffic.

Such a deformed market has made even many giants (Kingsoft, Huawei, Sina, etc.) unable to support it in the long term or have lost interest in further development. The collective withdrawal of online storage this time was partly due to policy reasons restricting some bad content, but a large part of the reason was that they could not find a long-term business model and had to withdraw to stop losses.

Can SaaS services change the status quo?

As an important entry point for work, domestic SaaS enterprise cloud disk services are gradually reshuffling the Chinese market and occupying the Chinese enterprise market. Cheng Yuan, founder of Yifang Cloud, believes that when he returned from the United States to start a business at the end of 2013, his biggest feeling was that the development of China's mobile Internet has completely changed China's life, and it is even more developed than that of the United States. In the past 20 years, the scale of Chinese companies can be compared with Gome. The main reason for the current situation is that the complexity and cost of the previous generation have deterred more than 95% of Chinese companies from popularizing it. But for SaaS, the scale of China's success may be greater than that of the United States. Because the core of SaaS is mobile, good experience, low cost, no need for deployment, and these features of anytime and anywhere are born for the Chinese market.

When the informatization of small and medium-sized enterprises in China was still in its infancy, SaaS was like Columbus discovering the New World for foreign enterprises. SaaS helped the primitive people of the New World to move from primitive society to the mobile era. The speed of popularization of this process exceeded everyone's imagination, and the obstacles encountered in the practice were relatively few. However, looking at China's medium and large enterprises, from the time of their understanding to the present, there is an invisible wall between SaaS and medium and large enterprises, and this wall is the issue of security.

Cheng Yuan admitted that he was lucky enough to participate in the entire process of a very famous SaaS company in the United States from small to large. From a small team in 2009 to 2013, 82% of them became paying users, and many Fortune 500 companies began to use SaaS. Compared with the SaaS industry of many foreign giants such as Box and Slack, the gap in domestic technology level and market demand is not that big, but the development of SaaS has always been slow. This is because corporate users' concerns about security have hindered the development of SaaS's vertical fields of network disk user data and circulation.

Cheng Yuan joined Box at the beginning of its establishment and was one of the first 30 employees. He is also one of the core technology developers. He was originally the most likely to turn Yifang Cloud into the Chinese version of Box. Why did he suddenly change the direction of entrepreneurship? Cheng Yuan explained to reporters that Box is now a multi-billion dollar company, but so far it has remained in the storage and sharing business. However, American users attach great importance to data storage and are aware of the importance of data to the business, and have a very healthy business model. However, domestic needs are different. Data storage and management are still too basic. China needs SaaS applications that are closer to its needs.

Cheng Yuan believes that as a carrier of core business data and knowledge of enterprises, the storage and management of files on Yifang Cloud are increasingly valued. Nowadays, the demand for mobile office is becoming more and more popular. Enterprises need to access, share and collaborate on work files anytime and anywhere. Whether it is within the enterprise department, between departments or with customers, there are various file-based sharing and collaboration scenarios. Especially in some special industries with dispersed personnel, many files and frequent file collaboration, online file storage and circulation are essential tools for realizing collaborative and mobile office, which has brought considerable market opportunities for enterprise file cloud.

With storage as its core, online disks cannot bring real value to the business of domestic enterprises by truly helping enterprises share, realize real data transformation, and realize knowledge accumulation and value maximization. Yifang Cloud provides personalized and distinctive services, maximizes the value of data and circulates it, faces customer success, provides file management and collaboration solutions for future enterprises, truly cuts into the pain points and needs of enterprise employees, and turns a relatively fixed and rigid model into one that can automatically complete technological innovation as the needs of enterprises change in the future.

The key to building a successful SaaS service

In China's SaaS market, with a completely different market foundation and business operating background, medium and large enterprises need to have several key elements to successfully enter the SaaS market.

First, tailor-made does not refer to development in the traditional sense, customized development of traditional software, but SaaS is essentially an Internet product. It is calculated at a daily speed, so that it can quickly adapt to the needs of the enterprise and changes in enterprise needs. When it is fast, it can truly achieve a tailor-made effect.

Second, differentiated pricing. When SaaS is 20-30% higher than traditional software through a core value service, customers do not perceive it. The reason why SaaS can have a disruptive effect is that it can provide customers with differentiated and service-oriented prices that are 5-10 times higher than products. When the value is large enough, domestic users’ security concerns will be alleviated, and they will have the courage to try SaaS services.

The key to success is focus. Cheng Yuan frankly said that most SaaS companies in the United States did not do more than one category before going public. Because the SaaS industry must be focused, otherwise it will not be able to achieve 5-10 times differentiated prices. Only by focusing on one point can startups make SaaS truly enter the business of medium and large enterprises. Of course, we hope to tailor it for Chinese companies and focus on the field of corporate document management. For us, we hope not only to do traditional software, but to truly help companies aggregate these scattered knowledge and data, and be able to connect the company's employees to the people of the company.

With the rapid development of domestic mobile Internet, mobile office will drive the development of enterprise information construction. Domestic enterprises recognize the advantages of SaaS model over traditional software. At the same time, they pay for 20% of cloud file storage users with office needs. SaaS has gradually become the main service model of network disk products at home and abroad. And through cloud file storage and collaboration, the enterprise's own data brain is built. Compared with the defects of traditional private cloud such as long development cycle, difficult update and high deployment cost, the public cloud storage service of SaaS model is the first choice for large and medium-sized enterprises to enjoy more cloud services in the future.

In other words, the needs of work-related file storage, sharing and collaboration do not need to be solved by individual users who just find a network disk. Business owners who gradually realize that the files scattered on employees' computers are of great value will choose to purchase enterprise network disks with a scalable SaaS model as the cornerstone of information construction in the information layout. For employees, the application is "free"; for business owners, "informatization construction" is improved, and efficient file circulation has achieved business growth. This is a win-win situation.

at last,

Countless lessons have taught us that free is the most expensive, which is clearly reflected in the recent closure of Internet cloud storages. Although some cloud storages with a high market share, such as Baidu Netdisk and WeCloud, have not experienced any turmoil, users still need to be vigilant at all times, because you never know when they will be shut down, so use them and cherish them.

These days, the Internet is reshuffled overnight. This was the case with IM, marriage, travel, taxi-hailing, and group buying.

[51CTO original article, please indicate the original author and source as 51CTO.com when reprinting on partner sites]