Service Provider Cloud

Huawei Bets on Massive Shift to Cloud

Huawei is on a different trajectory from other vendors.

After steamrolling its way through the global telecom industry, the Huawei Technologies Co. Ltd. juggernaut is re-aligning itself to take on the IT industry as well.

This week it has gathered 20,000 of its enterprise and carrier customers into a stadium in Shanghai to deliver its view on where the businesses are going.

It's not a complex message. The cloud is eating everything, according to Huawei. In what it describes as "Cloud 1.0," companies like Uber, Airbnb and Alibaba Group ambushed competitors through clever application of cloud technology. "Cloud 2.0" will be the industry cloud, in which dozens of verticals take advantage of the cloud's agility and lower cost. By 2025, 85% of all workloads will be executed in the cloud and all businesses will be cloud-enabled, Huawei predicts.

The company has got itself in front of this through a dedicated enterprise unit that last year -- less than five years after its creation -- reported $4 billion in revenue. It may have trimmed its forecast but even under its revised guidance the company is expected to grow at a compound annual rate of 35% between 2016 and 2018. (See Huawei Pushes Back $10B Enterprise Target to 2018.)

This is not a unit devoted to selling LANs and WANs in provincial China, of course. It's focused on the top end, and already has an A-list roster that includes HSBC, General Electric Co. (NYSE: GE), Mercedes Benz, CERN and Honeywell International Inc. (NYSE: HON). During the Shanghai event, HSBC's CIO and GE's head of global alliances appeared on the conference stage.

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The history of IT and telecoms may be replete with tales of vendors that got it wrong, but Huawei's vision appears to make sense. The move to virtualize telecom networks and data centers on standard IT platforms is one aspect. The oncoming IoT juggernaut is another. And the cloud will tie this all together.

As far as Huawei is concerned, so will its product set. The implicit theme in Shanghai is the convergence of telecom and enterprise. The major product launch is a new unified SDN controller -- the first of its kind -- that can be deployed in telecom networks, campuses, data center WANs and IoT networks.

It's difficult to imagine any other comms vendor doing all of this, and kicking it off in such a large arena. Huawei is playing a different game, betting confidently on telecom-enterprise convergence plus the cloud.

The company has come a long way from its early days as a supplier of low-cost gear. Admittedly, it has had the help of state bank credits, but that alone can't explain its growth.

It has built a successful customer-focused and global culture. That doesn't guarantee success for its cloud gambit, but as a formula it's been hard to beat.

– Robert Clark, contributing editor, special to Light Reading

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tojofay 9/7/2016 | 10:11:58 AM
Re: Sponsored content Rclark, 

Could you disclose any relationship with Huawei you may have that compensates you directly or indirectly? 


R Clark 9/7/2016 | 9:53:45 AM
Re: Sponsored content Yes, a lot of firms are in that game but I'm not aware of any that are making the transition better and faster. 
t.bogataj 9/7/2016 | 8:55:03 AM
Re: Sponsored content Front-row seat - fine. But in terms of shifting their strategy from "telco-only" to "IT-too", they're one of many.

R Clark 9/7/2016 | 8:42:06 AM
Re: Sponsored content They've built a $4b enterprise business in five years, including a number of Fortune 100 companies, and however big the industrial internet gets they have a front row seat. Plus a pretty strong record for hitting their strategic goals. 
t.bogataj 9/7/2016 | 6:50:39 AM
Sponsored content Indeed, Robert--

What makes H's trajectory "different from other vendors"???

No more than yet another vendor joining the club, and far from being the first.

R Clark 9/4/2016 | 4:48:38 AM
Re: Zero sum game? I'm sure that's correct on IT spending but I expect Huawei would say telecom spending is shrinking, and that by building for enterplrise as well as operators they get better scale and lower costs for both segments.

Also they're betting on the internet and IT itself changing with the emergence of the inudstrial internet, including IoT.   According to the GE speaker that's going to be worth $500b by 2020 --- even if half that it's a big market.

Plus Huawei have a pretty good record in moving into new businesses and new parts of the value chain.

danielcawrey 9/3/2016 | 12:44:15 PM
Re: Zero sum game? It's interesting for me to see how these larger networking companies are now moving into cloud businesses. The cloud really is nothing new, but I suppose it did all have to start with software first. Now that businesses are using these services, larger infrastructure players like Huawei have to get into the market and offer pieces of the bigger picture. 
TV Monitor 9/3/2016 | 12:04:42 PM
Re: Zero sum game? sarcher60555

"Bow to our new master."

I don't know where you live, but Huawei is banned where I live.
sarcher60555 9/3/2016 | 3:33:48 AM
Re: Zero sum game? Exciting to read and only one major vendor could do this at a moments notice, Huawei.  Their future is to be assured for many generations.  Bow to our new master.
tojofay 9/2/2016 | 8:41:49 AM
one of a kind Bob?
Announcing the Infinera Xceed Software Suite

Advancing Open Multi-layer SDN Control and Applications for Packet-Optical Transport
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