The industrial internet is dead again? From two IPO Failure and exit of Alibaba

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Failed IPO

The IPO plan of "Shu Gen Hulian, https://www.rootcloud.com/" which was developed based on the business of Sany Heavy Industry, was changed from suspension to termination on August 22, 2023, sounding the death knell for the industrial Internet platform.

On June 2, 2022, Shu Gen Hulian submitted an IPO application, with an original plan to raise 1.5 billion yuan. Of this, 600 million yuan was intended for the industrial Internet platform upgrade project, 300 million yuan for the industrial Internet industry scenario application project, 300 million yuan for the marketing and customer success system construction project, and 300 million yuan for supplementary working capital.

Although the listing process of Shu Gen Hulian has been submitted for one year, there has been no progress, and it has been suspended twice during this period due to expired financial reports. After enduring all the inquiries about the core business, it was unable to justify the 1.7 billion yuan loss in the past three years and the over 60% related party transactions.

On November 9, 2023, "Langkun Intelligent Technology," with revenue of over 400 million yuan and a profit of nearly 80 million yuan, reluctantly withdrew its IPO application after repeated questions about topics related to commercial bribery. The hope of the industrial Internet platform village was shattered for the second time.

Alibaba exit

In 2023, after Zhang Jianfeng and Zhang Yong, Wu Yongming personally took charge of Alibaba Cloud and comprehensively reorganized its business. The strategic positioning of Alibaba Cloud is "AI-driven, with a priority on public cloud". Without hesitation, they made decisions on pseudo-proposition businesses discovered through continuous trial and error and expansion. As a result, Alibaba Cloud's industrial internet platform also bid farewell to the stage of history.

Over the past few years, Alibaba Cloud's industrial internet platform has played a role in exploring the industrial field for Alibaba Cloud and seeking the integration of IT and OT. It has also made significant contributions in industrial breakthroughs such as AI vision. However, as time went by, at the end of 2023, Alibaba Cloud made the difficult decision to shut down the industrial internet platform business, even at the cost of offending major industrial customers. Only a minimal closure team was retained, bidding farewell to this heartbreaking field without any regrets.

Compared to the unsuccessful IPO attempts of Shu Gen Hulian and Langkun Intelligent Technology, Alibaba Cloud's proactive abandonment of the industrial internet business has a more profound impact.

Who exactly is the builder of the industrial internet platform?

By the end of 2023, in the era when the bubble of the industrial internet platform burst, the answer has gradually become clear—a third-party industrial internet platform company also had no opportunity for trial and error. The know-how required for building such a platform cannot be achieved simply by recruiting a few experienced professionals. Only the enterprises themselves are the true builders of intelligent manufacturing digital platforms.

The industrial internet platform companies that originated from large manufacturing enterprises, such as Meiyun Zhishu, Ka'ao Si, and Gechuang Dongzhi, have a deep understanding of processes, manufacturing, and IT. As long as they stay within their own industry, they are virtually unbeatable. However, once they venture beyond their industry, especially when their own competitors enter the same market, they naturally struggle. Intelligent manufacturing platforms embody the know-how of the enterprises themselves, and no company would be willing to deposit their unique expertise on an industrial internet platform built by a third-party cloud provider.

We can review the performance and latest financial reports of 10 companies over the past decade, including Siemens, Schneider Electric, Honeywell, ABB, Mitsubishi Electric, Emerson, Rockwell, Omron, Fanuc, and Huichuan Technology.

(colors in the chart: Siemens, Schneider Electric, Honeywell, ABB, Mitsubishi Electric, Emerson, Rockwell, Omron, Fanuc, and Huichuan Technology.)

In the field of intelligent manufacturing and industrial Internet, the opportunity for third-party companies, including giants like Siemens, Hui Chuan, and basic equipment manufacturers like SKF and ABB, as well as start-ups like Rongzhi Xin, Mogu IoT, and Deep Intelligent Control, is to provide "integratable" modules in a specific field. This allows the builders of digital platforms to quickly, accurately, affordably, and easily implement applications in a specific scenario or direction, which can bring vitality to the forefront. Every steel company knows how to produce and produce good wires and plates, and every car company knows the process of their own welding and coating. However, they do not have the energy or ability to perform bearing flaw detection on servo motors, insulation aging in transformers, or particle analysis of lubricating oil. These applications require expertise in specific scenarios.

The conclusions of these segmented scenario applications must be open and standardized enough to interact with the enterprise's intelligent manufacturing platform, where the enterprise itself proposes needs and application scenarios, and the digital system integrators cooperate sincerely with the enterprise's digital departments. They use appropriate modules to build a digital platform exclusively for the enterprise, which is continuously iterated and improved by the enterprise's operations and maintenance personnel.

Those IT/OT integration talents who have experienced the industry shuffle but have remarkable courage and true skills will embrace the best entrepreneurial opportunities in their lives.

This article is translated from Zhihu: "Digitization Transformation Study Society" Source