Kingdee to target big corporations with its next-generation cloud services

PUBLISHED : Sunday, 20 August, 2017, 3:41pm
UPDATED : Sunday, 20 August, 2017, 11:02pm

Kingdee International Software Group, the biggest enterprise application and cloud services provider to small businesses in mainland China, is looking to target big corporations and state-owned enterprises by providing hybrid cloud services by the end of next year.

“By 2020, we hope that 60 per cent of our revenue will come from cloud services,” said Robert Xu Shaochun, founder and chief executive of Hong Kong-listed Kingdee, in an interview.

“From the start, Kingdee has already provided over 6.6 million clients with accounting software. Now, many of our clients are also using our Kingdee Cloud to better manage their enterprise resources.”

While Kingdee’s customer base is largely comprised of small and medium enterprises (SMEs) in China, it is looking to include larger corporations in the mix.

The company said 45 per cent of customers who use its cloud services were existing clients who were already using Kingdee’s business applications, with the remaining 55 per cent new clients.

Kingdee currently provides public cloud services, but the company said the next-generation cloud services will be hybrid – a mix of public and private cloud – which can better cater to large companies.

Kingdee already counts a number of big companies such as Tencent and Huawei as clients for Kingdee Cloud, but Xu is optimistic that its second generation of cloud will allow Kingdee to target a broader range of corporations, such as China’s state-owned enterprises.

Software group Kingdee targets 2018 breakeven for its cloud services business

Public clouds are typically applications and storage made available on the internet as services for all companies. In contrast, private clouds are proprietary data centre architectures that are tailored specifically to a company. Hybrid clouds are a mix of both, with companies using a private cloud and relying on the public cloud as required.

“By the end of this year, we will conduct trials of [this hybrid cloud] with some of our clients and we will push out more services by the second half of next year,” Xu said.

The company also said it expects to break even on its cloud business in 2019, emphasising that it is currently investing heavily to ensure a strong growth trajectory for Kingdee’s cloud services.

Xu said that Kingdee will continue merger and acquisition activities to boost its current cloud offerings, to ensure that the company stays competitive and retains its spot as one of China’s largest cloud services providers.

He also did not rule out the possibility of providing big data analytics services for e-commerce companies using Guanyi Cloud, a subsidiary of Kingdee that provides cloud services and applications to e-commerce merchants.

Last week, Kingdee reported a 15.5 per cent increase in revenue to 1 billion yuan (US$150 million) for the six months ended June 30, with revenue from cloud services jumping 45.1 per cent from the same time last year to 282.8 million yuan.

Kingdee’s stock has gained almost 13 per cent since the beginning of the year, closing up 4.8 per cent to HK$3.27 on Friday in Hong Kong.