Can Huawei ‘Reinvent Itself’ as a Cloud Leader?

  • 28/04/2021

Huawei’s radio access network (RAN) business is still the largest in the world, but it’s now hedging its bets against sanctions and bans in multiple countries to build a stronger business in cloud computing and software.

The Chinese vendor released some new cloud computing products in a bid to challenge the country’s cloud leader, Alibaba, and improve its position against global leaders Amazon Web Services (AWS), Microsoft Azure, and Google Cloud.

Huawei’s strong legacy in telecommunications and enterprise networking could bolster its cloud presence, particularly among mobile network operators and enterprises that are increasingly moving network functions and core services to the cloud.

However, it’s unclear if Huawei’s gambit for growth in the cloud and software markets will be limited to countries that haven’t imposed sanctions or bans restricting the use of Huawei’s equipment and services for critical network infrastructure. Huawei only highlighted examples of its cloud work with Chinese tech companies alongside its announcements.

Huawei Keeps Broader Strategy Under Wraps

“It’s clear that U.S. sanctions, chip shortages, and general anti-Chinese vendor sentiment are forcing Huawei to find a way to stay in business and reinvent itself. Huawei has to find a new strategy to stay in business, but the management has not shared any details of the new plan,” Stéphane Téral, chief analyst at LightCounting, wrote in response to questions. 

“Keeping the cards close in the high stakes poker game of global trade makes a lot of sense for Huawei. Reading between the lines of public statements and private conversations at the event was often the only option to gain insights into Huawei’s future strategy, which remains mostly unknown,” he added.

Huawei said it wants to increase the amount of revenue that software and cloud computing contribute to its total financial performance. Huawei said its infrastructure-as-a-service (IaaS) cloud business is ranked No. 2 in China and No. 5 in the world and claims it’s “the fastest-growing mainstream cloud vendor.”

The rise of cloud native and artificial intelligence (AI) technologies presents Huawei with an opportunity to earn more business in application modernization, data asset management, and industrial use cases for AI, according to the vendor.

“By 2025, 100% of enterprises around the globe will be utilizing cloud technology. Cloud is the future of the information, communications, and technology industry and the foundation for enterprises’ digital transformation,” Huawei Cloud CEO Richard Yu said in a statement.

Huawei Cloud Off to a ‘Very Impressive Good Start’

While Huawei’s cloud business is significantly smaller than the world’s largest hyperscalers, the company has accomplished a “very impressive good start” thus far, Téral said. “Huawei has developed a powerful ecosystem for its cloud offering and has achieved a remarkable 17% domestic market share in 2020 after competing for only a very short time against its well-entrenched and much older cloud rivals Tencent and Alibaba.”

Huawei also, at its annual developer conference, announced plans to invest an additional $220 million in its Huawei Developer Program this year, with $100 million of that earmarked for Huawei’s software-as-a-service (SaaS) and independent software vendor partners. The company’s developer program focuses on containers and microservices, SaaS, big data, AI, video, and edge computing.

“Developers are the soul of the industry. Huawei will continue to open its technological innovation capabilities and work with developers and partners to accelerate the cloud and intelligent transformation of business,” Yu said. 

China’s 5G Operators a ‘Natural Fit’

New cloud services revealed this week include a “turbo cloud container cluster” for the Huawei Cloud container engine, a programming assistant for developers, improvements to its GaussDB database for distributed infrastructure, and new software for what Huawei calls “diversified computing.”

The company claims its cloud container cluster engine can cut end-to-end connection times in half and reduce latency by 40% by transforming a two-layer network into a single-layer network. These advancements helped Sina Corp. deal with traffic surges and improved Meitu’s resource utilization of container clusters by 40%, Huawei claimed.

Huawei’s GaussDB, which helps enterprises migrate databases to the cloud, can process transactions 54% faster than similar products and do complex queries with an 82% reduction in latency, according to the company. 

The vendor also said it “has built a complete set of basic computing software stacks, including the operating system, enterprise-grade database, and an all-scenario AI computing framework, to enable diversified computing power and support Huawei Cloud innovation.”

Huawei is positioned to make some strong gains with China’s trio of 5G mobile operators, according to Téral.

“Being a computer hardware manufacturer and having very well-established relationships with the three domestic Chinese carriers makes Huawei a natural fit to help those operators establish multi-access edge computing (MEC) and turn their many central offices into edge data centers,” he said. “LightCounting believes that filling those carriers’ central offices with Kunpeng and Ascend based servers for MEC use based on Open Euler (Huawei’s operating system) and Gauss is one of Huawei’s key but quiet strategies.”

 

Source

https://www.sdxcentral.com/articles/news/can-huawei-reinvent-itself-as-a-cloud-leader/2021/04/

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