If I can sum up Jinshan in one sentence, this sentence is the most appropriate: this is a software company with accumulated technology, which conquered the world with a set of WPS office products and propped up hundreds of billions of market value.
Look at the market revenue first.
In the past three years, several key indicators of Jinshan's revenue, profit, net profit rate and revenue growth rate compared with the previous fiscal year are as follows:
2.26 billion, 870 million, 38.8% and 43% in 2020.
201915.84 billion 25.4% 39.8%
2065438+200811.300 million, 3 1 100 million, 27.5%
High growth rate, high net interest rate, a good company at first glance. In addition, regarding the issue of net profit margin, among the companies we analyzed earlier, the net profit margins of Guanglianda, Iflytek and UFIDA are all around 65,438+00%, and the sales expenses are basically the same as the R&D expenses, while the profit margin of Hang Seng is 30%+, mainly because the sales expenses are greatly reduced.
Jinshan's net profit is so high, let's take a look at its main expenses: R&D expenses 7 1 10,000, sales expenses 480 million, and management expenses 2 1 10,000. In addition, among Jinshan's 2,824 employees, R&D staff is 1923 and sales staff is 695. The other companies we analyzed earlier are basically equal to sales personnel and R&D personnel.
Therefore, if the enterprise software service market wants to improve the net profit rate, it depends on who can beat down the sales expenses. Jinshan office has occupied a huge party and government market with domestic office core products, and constantly improved the product technology moat. Coupled with the blessing of localization of key software technologies, we can have such high-speed growth and net profit margin today.
Next, the core product WPS Office is analyzed.
Most of Jinshan's income comes from WPS Office, and most of its resources are also invested in WPS Office. On the PC side, it supports domestic operating systems and chips, occupying the huge office software market of sensitive institutions such as the party, government and army. On the mobile side, in the early stage of the development of mobile devices, Microsoft and other overseas manufacturers took advantage of the backward development of mobile terminals to quickly develop office products on the mobile side and quickly occupy the market in the world.
All products of Jinshan Department add up to * * * monthly activity of 474 million, including WPS Office desktop version of 65438+85 million, mobile version of 282 million, and others100000.
In the field of application software, the complexity of office products is very high, which will involve many core technologies, such as typesetting, spreadsheet calculation, drawing, rendering, online collaboration, document security and so on.
Many years ago, I interviewed a programmer sister in Jinshan. She is doing typesetting of office products. We talked for over an hour. At that time, we recruited mobile development. Although she has no experience in mobile development, I gave her a high evaluation and let her pass. Because, for a junior engineer, the most important thing is not how many platforms he has contacted and how many technical frameworks he has mastered, but to form a systematic technical thinking in a field. As long as she has this kind of thinking, she can get started quickly and complete in-depth understanding and application in a short time, whether changing platforms or contacting new frameworks.
profit model
Sell the license. This should be familiar to everyone. This model is the mainstream PC desktop tool software that we are in daily contact with. You can pay for the activation code and fill it in the software to activate it before using it.
Internet advertising promotion. This is relatively simple. There are many free users of WPS, mainly individuals and SMEs. You can put some advertisements to make money. But we won't focus on this one, because for Jinshan, this is neither the main income item nor the key development business, and the internal positioning definitely belongs to the marginal business of the marginal department.
Some people may say that advertising is also a very deep technical field. Of course, this is true, but Jinshan has a high probability of not advertising its core products, because I saw such a sentence from the financial report: "The company won the JD.COM 2020 Outstanding Contribution Award, Taobao Alliance Traffic King Award, Pangolin 2020 Most Influential Partner Award and other awards, which were recognized by important partners."
The core of advertising is to aggregate users and advertisers first, and then match them through algorithms. Since Jinshan has chosen to cooperate with Taobao, Pangolin, JD.COM and other platforms to sell traffic to them, it is very likely that it will not aggregate advertisers and do its own algorithm matching.
The revenue from Internet advertising promotion in FY 2020 is negative for two reasons: either the user activity decreases, or the number of free users decreases, and the number of paying users increases, so you can't display advertisements after users pay.
The office software product market has several characteristics.
First, it is a market with relatively high technical threshold and fewer players. Office can be said to be the technical peak of Office software, such as Ali's nail, Baidu's network disk and other product software, which will have the function of previewing and editing office documents. The underlying technology is actually in cooperation with WPS. Without cooperation with WPS, it is really a long story to choose your own Tencent document in Office document processing. It's a curse to search casually on the internet.
Second, with the arrival of the epidemic, the demand for online office has increased sharply, which will bring a great incremental market.
Third, the background of the wave of localization. Information security is no small matter. As one of the most used softwares, the security of office software is the most important. Think about our government, military and security departments. If they continue to use foreign offices, then once their governments ask their companies to provide information, shouldn't those foreign companies have to hand it in? Therefore, Jinshan, a software service provider with prescription intellectual property rights in key technical fields, will have great advantages. For example, Jinshan undertook a number of major national "nuclear high-base" science and technology projects, and WPS Office series completed the system adaptation and application promotion of a number of demonstration projects during the "Twelfth Five-Year Plan" and "Thirteenth Five-Year Plan" period.
We can also see Jinshan's core competitiveness in localization from two other angles: one is the heavyweight technical awards won, such as the second prize of national scientific and technological progress, national key new products, national strategic innovation products, the first prize of scientific and technological progress of Chinese Institute of Electronics, and the technological innovation award of China government information products. The other is those big projects mentioned in the financial report, which are obviously inextricably linked with the party and government organs, such as the enhancement and optimization of office software in the party and government office system, the enhancement and optimization of office software in a safe and reliable office platform, and the research and development and industrialization of WPS domestic office suite for party and government applications.
R&D investment
Of course, this product with technical threshold must maintain a high R&D investment in order to remain competitive.
Let's look at the R&D investment: 7 1 billion in 2020, with revenue accounting for 31%; In 20 19, it was 598 million yuan, accounting for 38% of revenue; In 20 18, it was 430 million yuan, accounting for 38% of revenue, which is quite high in any industry.
Next, look at education: the employees of the company are mainly undergraduate, accounting for 72.22%, junior college 14.53%, master 12.26%, senior high school 26, and doctor only 1. Jinshan describes himself in the financial report as "guided by the needs of end users and downstream partners, integrating customer opinions into product life cycle management, and the R&D department communicates with the sales department and support department synchronously, and goes deep into the whole process of product design, R&D, testing, delivery and service". The WPS office in Jinshan mainly focuses on the development of application-level software engineering, and rarely involves the underlying technology in the computer field. Because they are all application-level software projects, the technical input is mainly at the engineering level, and a large number of undergraduates and masters are enough.
Look at the number of R&D personnel: R&D personnel are 1923, accounting for 70.39% of the total number of the company. Compared with other situations where R&D and sales staff are basically the same, Jinshan is more like a high-tech company.
Next, look at employee salary: the average annual salary of R&D personnel is 294,500. In this respect, there is no polarization that leads to the "average" of low-wage personnel, because the annual salary of several vice-presidents mentioned in the financial report is around 2 million. Of course, there is still a big gap between this annual salary and the Internet giant. Therefore, if you are a top talent in the field of software development, don't go to work in the enterprise software service industry, and go to the Internet giant 996 to be the king.
Become the core competitiveness of enterprise software service market
I mentioned in my previous analysis of UFIDA's financial report that if a company wants to survive in the enterprise software service market, it needs to have three core competencies, namely, customers, services and products. We all know the products of Jinshan. Let's look at the other two core competencies: customers and services.
This is very easy for customers to explain clearly. Jinshan explained his customer resources in the next paragraph of the financial report. You can feel this low-key luxury:
"Jinshan Office's products and services have been widely used in many important fields such as government, finance, energy and aviation. At present, we have served 62 of the 65 ministries and commissions in the State Council and 33 of the 34 provincial governments, covering more than 400 municipal and county governments and central enterprise markets. By the end of February,18 and10 of Fortune magazine, 68 China enterprises and 153 medium and large banks had served 133 customers, including large state-owned banks. There are many large government and enterprise customers such as Bank of China, Agricultural Bank, Industrial and Commercial Bank of China, State Grid, China Petroleum, China Post, National Energy, China Railway Construction, and China Southern Power Grid. "
In the case that the personal market is firmly occupied by Windows, it is these party, government, army and state-owned enterprises and institutions that have propped up Jinshan's 470 million monthly work.
Let's talk about service
We are most familiar with the products launched by toC Internet Company. No matter Taobao, WeChat or Tik Tok, the products provided to users have two characteristics: simple, fast and standardized, so we will not spend any resources on services. At most, we have a manual customer service like Taobao. Tencent's products never look for human customer service. Any questions are submitted, and I will give you a simple explanation after X working days, which makes you speechless and crazy.
However, the enterprise software service market is completely different. There are many things to be done before, during and after sale: BD, POC, bidding, training, customized development, integration, implementation, operation and maintenance, customer service, technical support and so on. These things are closely linked. If a link is not handled well, it will affect the customer experience, and the enterprise service market circle is so big that word of mouth is easy to spread.
In fact, this is also the reason why players in the enterprise software service market generally participate in SaaS transformation. SaaS service model can greatly reduce service investment. Because the essence of SaaS is actually to achieve service standardization through product technology innovation, and there is no need for customized development, integration and implementation.
Finally, I return to the theme of the series of articles-personal growth and career choice.
Companies like Hang Seng, UFIDA and Jinshan, which conquer the world through the core products in one field, can support the old farmers because the depth and complexity of the products are large enough and the development time is long enough. The key is that the product is gradually upgraded and iterated, and it will have a particularly strong continuity. Many old employees can focus on a certain field and grow with the products.
They all do application-level software development, and Internet companies are very different. Although toC Internet products such as WeChat, Taobao and Tik Tok can have a history of many years, because of the standardization and fierce competition of C-end products, the product business must constantly innovate and iterate, and even overthrow the old logic to rebuild a new model. In this fast iterative rhythm, most people always do a lot of work from 0 to 1, from 1 to 10, and from 0 to 1. If employees are in it, they will either be promoted to managers with the rise of products or be eliminated by younger and more capable people.
However, the software development of core products of companies such as Kingsoft will also have a problem, that is, it will be limited to one field for many years. When you want to jump ship, you will find that the market pit is not suitable for you. The golden age of engineers is 3~5 years. All companies like engineers of this age. Experience came up, but physical strength didn't go down. I just worked hard in the front line, and then I had to rely on domain experts or management experience. If you have been developing Office typesetting engine for more than five years and become a technical expert of typesetting engine after the year of death, you will find that there are only a few domestic software companies that want you.
Everyone has different opportunities, but no choice is perfect.