Industry Insights | Digital Economy Transformation Drives the Flourishing Development of Cloud-native Industries

Cloud-native refers to the design and construction of business applications based on an open and standard cloud technology system. It is a brand-new software development, release, and operation model that can fully leverage the value of the cloud, improve the efficiency and flexibility of enterprise resource utilization, enhance the application iteration speed and business innovation capabilities of enterprises.

During the initial cloud adoption phase, enterprises still use traditional architectures for application development and deployment. This leads to issues such as long application deployment and release cycles, complex development and operations processes, which limit the speed of enterprise application iteration and business innovation capabilities. Due to incomplete integration of infrastructure differences among vendors, applications cannot be built in a standardized manner, making it difficult to share vendor capabilities (such as commercial enhancement), and thus failing to fully realize the value of cloud computing.

In comparison,In the cloud-native phase, with cloud-native platforms, applications can run, monitor, and be governed in a standardized manner. The general capabilities of businesses can be decentralized to the platform side, leaving them under the management and improvement of cloud providers. This enables businesses to have lightweight, agile, and highly automated characteristics, simplifying application development and operations.By leveraging cloud service providers, enterprises can improve resource utilization efficiency and flexibility, fully realizing the value of the cloud. Cloud service providers can also use AI technology to tap into the value of enterprise application data, further empowering enterprise applications and enhancing the speed of enterprise application iteration and business innovation capabilities.

The key technologies of cloud-native include: containers, DevOps, microservices, service networks, declarative APIs, etc. Rational and efficient utilization of these technologies can build loosely coupled systems with good fault tolerance, ease of management, and observability. Combined with reliable automation methods, these technologies also enable engineers to easily make frequent, predictable changes to the system, which is conducive to enterprises developing and running elastically scalable applications in new dynamic environments such as public clouds, private clouds, and hybrid clouds.

• Container:A lightweight, portable, and self-contained software packaging technology that allows applications to run in almost any place in the same way.
• DevOps:A culture or practice that values communication and collaboration between 'software developers' and 'IT operations technicians'. By automating the processes of 'software delivery' and 'architecture changes', it enables faster, more frequent, and reliable software construction, testing, and release.
• Microservices:An architectural style and design pattern that advocates dividing applications into a series of fine-grained services, with each service focusing on a single business function.
• Service network:An infrastructure layer dedicated to handling service communication, which in practice is a lightweight network proxy deployed together with application services and is transparent to application services.

• Declarative API:An API capable of processing multiple write operations at once and having Merge capabilities, which is opposite to command-based APIs, eliminating the need to implement each request individually.

Enterprise IT expenditures mainly include the costs incurred by companies on IT hardware, software, solutions, and other related areas. With the new generation of technological revolution and industrial transformation, digital technology is deeply integrated with traditional industries, stimulating new growth vitality in these sectors. At the same time, it has also promoted the rise of new digital industry formats and created new economic growth drivers. The scale of the digital economy continues to grow, and more and more companies are focusing on digital transformation.

In addition, with the increasing demand for remote work among enterprises during the COVID-19 pandemic and the government's promotion of favorable policies for enterprise digital transformation, Chinese companies have regarded digital transformation as one of their long-term development strategic goals, leading to a steady growth in the scale of IT expenditure by Chinese enterprises. From 2018 to 2022, the scale of IT expenditure by Chinese enterprises increased from about 3 trillion yuan to about 3.4 trillion yuan, with an annual compound growth rate of about 3% during this period.

Against the backdrop of the booming digital economy, enterprises and governments are vigorously promoting digital transformation in order to achieve efficiency improvements in business operations and social governance. Governments and enterprises continue to increase investment in IT products and services to meet the growing demand for business digitization, and the scale of IT expenditure in Chinese enterprises has maintained a high growth trend. It is expected that by 2027, the scale of IT expenditure in Chinese enterprises will reach approximately 5 trillion yuan, with an annual compound growth rate of about 8% between 2023 and 2027.

The overall market scale of public cloud in China has shown explosive growth driven by factors such as industrial digital transformation, reflecting a strong development trend in the cloud computing industry. From 2018 to 2022, the market scale of public cloud in China increased from approximately 60 billion yuan to about 200 billion yuan, with an annual compound growth rate of approximately 35% during this period.

From the perspective of product structure, the public cloud market is mainly composed of Software as a Service (SaaS), Platform as a Service (PaaS), and Infrastructure as a Service (IaaS). Driven by enterprises' increased investment in cloud infrastructure, IaaS accounts for more than 50% of the overall market size, reflecting the current situation where cloud development is centered around 'resources'. At the same time, the scales of SaaS and PaaS are also continuously expanding. Due to Chinese enterprises' significant investment in cloud infrastructure, they aim to convert their initial investment in cloud infrastructure into real benefits for the enterprise. This has led to a gradual shift in cloud service providers' development strategies from the IaaS market towards the rapidly growing PaaS and SaaS markets.

Platform as a Service (PaaS), as an intermediate layer in the cloud computing model, integrates components such as database services, application development process management, application infrastructure setup, and middleware services into a platform as a service that is provided to developers. This enables developers to focus on the resources required for application operation and maintenance without having to worry about them.With the increasing maturity of cloud-native products represented by container clouds, PaaS-layer products can provide enterprises with convenient and efficient IT services, significantly reducing IT costs in software and hardware. At the same time, PaaS-layer products can offer elastic, controllable, and efficient business support for enterprise customers, meeting the growing business development needs of enterprises. They are gradually becoming one of the inevitable choices for enterprises in digital transformation and architecture upgrades.The PaaS market has tremendous development potential. From 2023 to 2027, the scale of China's PaaS market will increase from about 40 billion yuan to about 100 billion yuan, with an annual compound growth rate of about 30% during this period. PaaS will become the fastest-growing public cloud deployment model.

The domestic cloud-native ecosystem is developing towards multi-dimensional openness, ensuring that developers can develop applications more efficiently and conveniently. Container technology from cloud service providers continues to evolve, which is also key to fully leveraging the value of cloud-native and continuously improving container cloud products. The establishment of a cloud-native open-source ecosystem has broadened the space for technological expansion and driven the rapid development of container products. Domestic container cloud providers are actively promoting the development of the open-source ecosystem, continuously increasing the open-source influence of cloud-native and containers in China.

In addition to the open-source ecosystem, cloud-native vendors also maintain an open mindset to build ecosystems for educational and industrial collaboration. This includes actively expanding external partnerships, such as collaborating with universities to enhance talent's understanding of vendor products, improving the compatibility of their own products with other vendors' hardware, and developing in tandem with hardware manufacturers while strengthening product capabilities. By building multi-dimensional open ecosystems, cloud service vendors can not only consolidate their competitiveness but also further develop related technologies such as container clouds.

Containers package applications and their dependencies, reducing the coupling between various components of the deployment architecture. This allows applications to operate without environmental limitations and quickly and reliably across different computing environments.

The components of a container include: the application itself and its dependencies, which are various binary files and libraries of dependencies. The components of container deployment also include the container runtime, a component of container isolation technology used to ensure that the container's operating environment meets expectations, such as Docker container engines.

The advantage of Kubernetes Engine is thatLess resource usage at the underlying layer, which is conducive to the full utilization of resources;High portabilityDevelopers only need to create or run an environment once, package it into containers, and they can run it on other machines. Ops personnel only need to configure the standard runtime environment, making development and ops work more efficient.High agilityThe lightweight packaging method enables containers to have better performance and smaller scale, allowing for quick startup and shutdown, and helping enterprises iterate products quickly.High elasticityContainer scaling-out can be completed in a short time, and since containers are independent entities, reducing one container node does not affect the use of the entire container system.

In the future, service providers need to ensure the security of user assets in containers under different application modes and stages by setting up full lifecycle security management and refining isolation levels. These two aspects will become the main development trends of container cloud technology in the future.

• Full Lifecycle Security Management of Containers

In different stages of container configuration, deployment, and operations, actual business lines have specific security requirements. Security planning needs to penetrate the entire lifecycle of container operations. Therefore, in the future, container security protection systems need to cover the entire lifecycle of container technology, and corresponding dynamic application policies should be set for different stages.

• The granularity of isolation is further refined, and the isolation layer is deepened.

Container application security involves isolation during operation, image isolation, network isolation, disk storage isolation, etc. To refine and deepen the degree of isolation, service providers can ensure the security of container user assets by providing models such as network policy isolation, storage isolation, and image reference isolation.

DevOps is a culture or practice that values communication and collaboration between 'software developers' and 'IT operations technicians'. Automation of 'software delivery' and 'architecture changes' make software construction, testing, and release faster, more frequent, and more reliable. The development of microservice architecture and container cloud technology has driven the rapid implementation of container-level DevOps platforms. Microservice architecture can divide applications into a series of fine-grained services, each focusing on a single business function, running in independently deployed processes, ensuring clear boundaries between services; at the same time, container cloud technology enables rapid migration and replication of applications, solving the problem of tedious initialization of deployed services.

The DevOps standardized process includes automation of integration, deployment, testing, and operations. The ultimate cycle of DevOps is premised on agile business deployment, starts with agile requirements, ends with requirement fulfillment, and ultimately achieves the goal of requirement fulfillment through backend nodes such as operations, monitoring, and data tracking analysis, thus building a closed loop of DevOps.

With the continuous development of DevOps technology,DevSecOps: Integrating R&D and Security OperationsIntegrate security into every stage of DevOps processes to address security risks; meanwhile, manufacturers willBuild a professional DevOps-related training service system, helping enterprise customers quickly complete transformation.

• DevSecOps is an important development trend in enterprise construction of DevOps platforms.

Traditional software security operations are executed separately from other processes required for software development, posing security risks.Developers write code, while the IT team deploys code without considering many security issues. It is only after software has been written and placed into a production environment that security engineers often check for security vulnerabilities, putting enterprises at risk of security threats.

DevSecOps integrates security into every stage of DevOps, automating security operations.Development, security, and operations departments work closely together, emphasizing the enhancement of IT efficiency for enterprises on the premise that security risks are under control, thereby better realizing the integration of R&D and operations. In enterprises using DevOps, more than half have introduced DevSecOps practices.Security has gradually been integrated into various stages, representing an important development trend in enterprise DevOps platform construction.

The cloud management platform is an independent management platform separate from IaaS and PaaS. It manages the resources and environment required for application running based on cloud APIs, managing the OS environment of application running through proxy or non-proxy methods. At the infrastructure level, it supports applications running on various public clouds, private clouds, as well as traditional IT physical machines and virtual machines, and supports applications running on various architectures above IaaS or physical machines.

The cloud management platform is deployed on top of the cloud platform.With complete IT infrastructure service capabilities and Ops management services,It can realize services such as user-based quota and process control, cloud environment operation and maintenance automation, and IaaS/PaaS service governance. It can also support key enterprise business applications such as core databases, ERP, financial systems, and production systems. The value of the cloud management platform is mainly reflected in the following four aspects.

• Unified Resource Management

To meet cost control, compliance, and other objectives, as well as the diverse needs of their own businesses, enterprises typically adopt multiple public or private clouds. However, decentralized governance of cloud resources can lead to uneven resource utilization. A unified resource management platform built on various cloud platforms can manage different clouds, enabling multiple clouds to fully serve business needs.

• Improve cloud resource Ops efficiency

In today's multi-cloud environment, enterprise IT Ops management is becoming increasingly complex. How to make resource deployment, application, and change management easier and more user-friendly has become a key for enterprises to improve Ops efficiency. Cloud management platforms, based on cloud resource management, help users automate and streamline the operation of cloud resources. A unified multi-cloud management platform can also avoid duplicate operations on each cloud platform, reduce Ops complexity, and improve work efficiency.

• Relieving the pressure on IT talent

The multi-cloud strategy increases operational management pressure on enterprises. However, with the empowerment and services of a multi-cloud management platform, enterprises can further integrate IT operations and maintenance tasks, thereby relieving more talent pressure and improving their own business operation and maintenance capabilities.

• Build IT governance system

An efficient automated management platform can effectively enhance compliance and process standardization, helping to improve an enterprise's IT governance capabilities. Cloud management platforms can achieve elastic and unified resource management, and based on the enterprise's business processes and usage habits, they can build a comprehensive cloud service governance system that services resources and manages multi-level, multi-type services uniformly.