Huawei bullish on cloud goal, but cautious in following through

Chinese hardware vendor pushes back target of hitting US$10 billion revenue from its enterprise business to 2018 and says it currently has no plans to extend its public cloud service beyond China.
Written by Eileen Yu, Senior Contributing Editor

SHANGHAI, CHINA--Huawei appears to be taking cautious steps in driving its cloud play, opting not to extend its public cloud service beyond its domestic market and pushing back its original target of hitting US$10 billion in enterprise revenue to 2018.

At its Connect 2016 conference held here this week, the Chinese networking equipment vendor had repeatedly pitched its role as a technology enabler for business transformation, providing the necessary infrastructure for cloud adoption.

Speaking to the media at the company's Connect 2016 conference held here, Huawei's deputy chairman and rotating CEO, Eric Xu, called on businesses to embrace cloud in their digital transformation, noting that cloud would "reshape" the enterprise and carrier markets.

Through cloud, Xu added, organisations would enable ubiquitous connection across people and devices, automate business processes with built-in real-time decision making, as well as transform their operations to run on big data and artificial intelligence.

In fact, Huawei believed cloud would play such an important role that it was expected to help drive the company's enterprise revenue up to the tune of US$10 billion by 2017, boosted by deals in cloud hosting and networks.

When ZDNet asked if the vendor was close to hitting its target, though, Xu said Huawei was now likely to realise that target a year later, in 2018. He did not offer an explanation for the pushback.

In a previous report, EMC's senior vice president and CTO, John Roese, had described Huawei's enterprise business as still "young" and "not their core competence". He noted that this segment was insignificant to the Chinese vendor, compared to the size of its carrier and consumer businesses.

Asked about competition from the likes of Dell-EMC, Cisco Systems, and fellow compatriot Alibaba--all of which were eyeing China's cloud market--Xu said competition was a natural part of any business.

"As enterprise IT architecture worldwide moves towards the cloud, we believe this an opportunity for us and we can capture these opportunities to drive our business growth," he said. "The last thing we want to see in any business is the absence of change. As long as there is change, there will be opportunities. And with opportunities, there will be endless possibilities."

Speaking to international media at the conference, Xu also noted that Huawei currently had no plans to expand its public cloud offering beyond its domestic market, preferring instead to work with overseas telcos.

Joy Huang, Huawei's vice president of IT product line, said at a separate media briefing that the company had to first ensure it was able to properly run public cloud offerings in its own market. It launched its China public cloud services last year.

Noting that requirements for delivering public cloud services were different from other cloud services, Huang added that the vendor's current focus was on helping telcos, such as Deutsche Telekom, build their own public cloud infrastructures. "There is no plan at the moment for us to run our public cloud services outside of China," he said, echoing Xu's reply.

Huawei's other rotating CEO Ken Hu earlier this week also pointed to a potentially huge and diversified market in the future cloud era, presenting "many ways" in which players could enter the market.

"We believe the best strategy then is to position ourselves as a technology provider and collaborate with industry partners to help enterprises worldwide in their journey towards the cloud," Hu said, pointing to Huawei's expertise in vertical industries--hence, industry cloud--as a competitive advantage.

At the conference Thursday, Huawei also launched 31 cloud services across 10 categories, including storage, networking, security, and test and development, on its FusionCloud IaaS platform. In addition, it unveiled its latest FusionStage 6.0, featuring a single converged storage platform comprising distributed block, file, and object storage.

Based in Singapore, Eileen Yu reported for ZDNet from Huawei Connect 2016 in Shanghai, China, on the invitation of Huawei.

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