Six ways Chinese Huawei is advancing its enterprise cloud plans on Europe

Huawei’s ‘grow the cloud’ event in Shanghai highlights its big cloud ambition

In the first half of this year Huawei brought in $15.65B in global sales revenue – up 36.2% on the same period last year – yet as a Chinese company, it is often overlooked in the West. This is partly because of ongoing Sino-US tensions. And partly because of brand recognition. After all, it has already taken Huawei years for to become known as a competitive smartphone provider, let alone raising the profile on any of the other things it does.

On the first front things are changing. Between Alibaba’s meteoric 2014 IPO and the stark change in global politics, people have gradually begun to take notice of Chinese companies. On the second, Huawei is ridiculously keen to gain world recognition as far more than a ‘mere’ smartphone company.

Over the last three days in, Shanghai, Huawei has been explaining its cloud growth plans. In the simplest form, its promise is to cover full stack ICT infrastructure – covering cloud, pipe and devices. In marginally more detail, it believes this facilitates all the latest digitally transformative technology – like big data analysis, AI and edge computing – and all this this is a natural extension of the broader company strategy.

But in world where GDPR makes enterprises ever more concerned about privacy and anything at all related to Chinese business strikes panic in the heart of US companies, what does this really mean? Here are my core takeaways from attending the event:

Everybody wants hybrid cloud – targeted at governments and large enterprises, Huawei is keen to stress that it can offer both public and private cloud. The latter is fully open source and through OpenStack. The former is a work in progress – currently focused on China – but with big expansion plans for Europe. (The US is obviously a lot trickier.)

One of the “top five” public clouds – “In the future, we predict there will be five major clouds in the world. Huawei will work with our partners to build one of those five clouds, and we've got the technology and know-how to do it,” said Huawei's Rotating CEO Guo Ping at the first keynote.

Through several press conferences and media briefings, the company was fairly cagey about what it actually means by this, or the time scale, but the implication is it will be next on the world public cloud after Google, Microsoft, AWS and IBM.

So, is this likely without the US to bolster numbers? “It depends on how Huawei define ‘top five’,” Charlie Dai, Principal Analyst, Forrester tells me. “If Huawei take all revenues as what they are doing in Europe into account, even if they don’t own and operate the public cloud service, then definitely it’s possible for Huawei to name itself as top five, given its market share in telco space as well as its huge investment in cloud and ecosystem.”

A huge push into Europe – at present most of Huawei’s customers are in China. This is not to be underestimated. The Chinese population (and land mass) is enormous compared to everywhere else in the world and IDC reported last month that China’s public cloud computing market expanded 54% in 2016 with the growth set to continue.

Huawei is currently number one in the space, with most other customers being in neighbouring regions, like Indonesia, Thailand and Hong Kong. The ambition is to change this. Yuan Qian, president of Huawei Enterprise Business Group marketing and solution sales department, tells me the aim is to grow Europe as the second market outside China. 

In practice, Huawei is a building a global cloud network with telcos Deutsch Telekom, Telefonica and Orange. This allows it to target most French, German and Spanish regions.  

Forrester’s Dai says: “Huawei has already gained significant progress in the European market providing infrastructure hardware and software for [these] telco players.”

IoT, big data and AI – a big emphasis at the event has been Huawei’s ability to deliver large, sophisticated IoT solutions for businesses. These come complete with the data analysis necessary to make sense of the information. Part and parcel of this is a service called Enterprise AI which utilises the latest techniques, such as advanced video image recognition, deep learning and graph analysis. It is intended to be tailored to specific industry requirements.

“Huawei is a large enterprise and a typical one,” we’re told during one of the press conferences. It is using its technology to help solve its own business problems – like issues with the supply chain. In addition to this it is partnering with other “typical large enterprise” like, China Pacific Insurance Company (CPIC), to tackle common business problems in other areas.

In a big public demonstration of its capabilities during the first day of the conference, a man rides on stage on a motorbike. His face is scanned and a computer guestimates his gender and age. His badge is then scanned to retrieve the official data. Finally his motorbike is scanned to provide a full overview of the motorbike specs.

Outside of enterprise use cases, Huawei wants to highlight the public benefits of this type of solution. It offers the example of a three year-old child who was snatched by a woman in Shenzhen. The woman’s face was captured on grainy CTTV, identified in a wider citizen database and finally matched from forage at a nearby train station.

This technology clearly marries up a number of difficult and highly desirable trends. Yet this kind of very Asian joined up societal-technological approach would have clear privacy concerns in a European market. It may be easier to highlight the bigger picture with government case studies but it is also quicker to showcase the negatives.

Edge computing to handle IoT data at source – this is a popular term which gets bandied about a lot. At IFA in Berlin last week Huawei launched Kirin 970 – which provides AI on a microchip chip to enable mobile AI –  this could have been a core component of the Huawei ‘edge strategy’ but I’m told it is currently only a consumer solution.

Kiran 970 will be used on the enterprise side as the needs arrive, Qian from Huawei tells, me but it was launched in the consumer space so that business group has the priority.

The main way Huawei sees edge computing working in practice, in the near term at least, is not so much at the chip level itself but in data-heavy IoT systems which need analysis near to the source. The example most used though the event is elevators and escalators. There are around 300 sensors in a modern elevator, which generates a lot of data, it is therefore far better if this can be processed locally rather than sending it back to a datacentre.

Too early for blockchain – many companies are getting very excited about blockchain. IBM has invested heavily in the space and provides a clear blockchain-as-a-service offering. Microsoft launched its service back in 2015, but is only really just beginning to advance its enterprise solution this. This is a divisive technology which attracts both zealots and those who aren’t yet convinced of the business uses.  

Shaan Mulchandani, director of technology and security at global design company Aricent told me recently that he believes it won’t be long before other cloud giants get involved and a “potentially game-changing release” arrives from AWS.

Qian from Huawei doesn’t believe the “time is right” for this technology. There is a dedicated labs team following blockchain, she explains, “however it is currently not mature for commercialisation”. We strive to pursue advanced solutions that can provide commercially viable solutions, “then wait for it to be ready for them to be ready for a commercial scenario,” she says.