ByteDance is making a push for further adoption of its proprietary Volcano Engine by enterprise clients. Volcano will be available for broader use in September or October this year, after major corporations in China sought to utilize what was once an internal tool developed and deployed for ByteDance’s own means.
ByteDance’s move to make Volcano Engine available to enterprises indicates it is doing more than offering a platform-as-a-service; rather, it is making infrastructure-as-a-service open for entities that are eager to tap into the data intelligence toolkits, experience intelligence, and cloud-native services that ByteDance has meticulously cultivated over the past nine years.
Apps like TikTok, Douyin, and Toutiao, which were all built by ByteDance to serve up personalized content for users, are leading products in their categories.
During a launch event on Thursday, ByteDance vice president Yang Zhenyuan referenced Amazon’s development of tools for internal use by the company’s engineers that led to the emergence of AWS. Volcano Engine followed a similar trajectory, and it is natural for major tech companies to release their internal applications as enterprise services, Yang said.
For years, ByteDance has received enquiries from would-be clients about utilizing the capabilities of Volcano Engine, according to Yang. Eventually, the company decided to run a trial program with phone brand Vivo. The deployment of an adapted version of Volcano’s recommendation engine led to a 17% bump in ad revenue per user. Volcano Engine has been available to Chinese enterprises on a limited basis since 2019, with Bilibili, JD.com, automaker Geely, China Construction Bank, and ByteDance’s subsidiaries among its users.
ByteDance is seeking to diversify its revenue streams. The company’s ad revenue—a mainstay—was on track to surpass USD 27 billion in 2020. In 2019, the firm also made its internal productivity app, Lark, which blends functionalities of applications like Slack and collaborative environments for documents, open for public use.
For now, ByteDance has one data center in Zhangjiakou to host its IaaS services. The company will need to ramp up its physical footprint to offer broader provisions through Volcano Engine.