Digital transformation is the only way for enterprises to keep developing and, for some, just survive. In the coming years, traditional enterprises will enter the critical period of digital transformation, promoting service innovation and growth. Data show that from 1955 until now, 88% of the Fortune Global 500 have disappeared completely or exited the list. Since 2000, 50% of the companies that left the list did so because they remained idle in terms of digital transformation. New technologies and new business models are bringing deep changes to all industries.
A Forrester survey gave a better insight into these trends. Cloud services are being deployed around the world at an accelerated pace: Analyzing a large scope of cloud services data allowed to obtain a better vision of where the ICT world stands and where the likes of the digital transformation, growth of cloud computing and many more innovations will have a major impact. In 2016, only 1% of those surveyed expected more than 80% of their revenue to come from cloud services and 18% expected 40%-70%. By 2020, these two numbers will respectively reach 9% and 45%. Cloud computing has already become a key supporting technology and cloud services have also become basic business models (words by Eric Xu, Huawei). Beyond the cloud, new technologies are growing. The IoT, the “Big Data” – data analysis and the introduction, and growth, of AI – Artificial Intelligence), the rise of “digital products” (IoT, robots, sensors, and Internet connection among others). 23% of the companies and professionals interviewed believed that an “IoT-based customer experience” is one of the best paths to drive digital revenue growth. New digital experiences are empowering humanity and allowing us to now reach for the impossible. Consider smart bodies taking over for us and even being able to predict the next thing that we want them to do. As Apple’s recent launch showed, with the ARkit, smartphones are now going beyond just “smart”. By mixing AI and the AR capabilities, they are beginning to blur the boundaries between virtual and real, creating all-new digital possibilities. With an also all-new revenue model – or models – in sight. Looking beyond individuals, entire industries are changing and, for some, facing massive disruption if not extinction. The customized manufacturing ecosystem, for one, is constantly evolving. Customization based on sensors and data will enable small batch customized – or individualized – manufacturing to become a reality. Such reality can go even further by adding cloud capabilities, improved connectivity and, potentially, bringing in AI and predictive analysis to anticipate on needs or demand from an ever-evolving customer environment.
In this context and changing world, Huawei – and more specifically Huawei’s enterprise division, Huawei Enterprise Business Group (EBG), aspires to become an enabler of digital transformation for industries and a preferred partner of customers.
While a relatively unfamiliar name for many, Huawei is currently a world leader in the telecoms equipment and networks business (in 2012, it overtook Ericsson as the world’s largest telecommunications equipment manufacturer), a strong member of the top 3 of smartphones’ manufacturers having recently overtaken Apple as the world’s second-biggest smartphone manufacturer by sales after Samsung, Huawei is only getting started when it comes to enterprise business.
ICT, Huawei and the Digital Transformation
The digital economy is now becoming a priority with the ICT sector gaining traction, prices deflating on services, companies now being online and the youth showing the way forward.
Convergence and consolidation are also having a strong impact on the industry. Services, including TV and video, are now carried over IP networks blurring boundaries between traditional telecom and broadcasting and pushing traditional operators to re-think their business models.
Nearly all businesses rely on ICT nowadays. Cloud computing keeps growing. Smartphone adoption in OECD countries grew by 30% in one year (2012-13) also impacting businesses and enterprises. The rise of online and mobile banking, for instance, is bending the market boundaries and the competition in the traditional retail banking sector, including the rise of P2P lending platforms. The introduction of the “Sharing Economy” is another ICT-enabled disruption – while these models enable collective consumption, they are challenging existing regulatory frameworks. Mobile and data are driving new business and new business models.
In this context, among new and more established players, Huawei can – and aim to – build a new ecosystem that features collaboration and mutual benefits, and work with partners to help customers achieve successful digital transformation. By doing so Huawei Enterprise Business Group has increasingly gained recognition from customers and partners, with 172 enterprises of Fortune 500 and 43 enterprises of Fortune 100 choosing them as their partner for digital transformation.
Huawei Enterprise Business Group, the newbie(?)
So, while the road ahead looks clear, where does Huawei, and more specifically Huawei Enterprise Business Group, stand at the moment?
According to Diana Yuan, President of Marketing and Solution Sales Department of Huawei Enterprise BG, during an EBG track held on April 12: “In 2016, according to analyst institutions’ reports, such as Forrester, IDC, and Gartner, the ranking of our [Huawei] main ICT products designed for the enterprise market has been rising. Huawei has become one of the leading IT manufacturers in the world.” Diana further explained the platform strategy of Huawei Enterprise BG: “Huawei’s platform strategy emphasizes cloud-pipe-device synergy. Based on various technologies, such as the FusionCloud platform, FusionInsight Big Data analytics platform, cloud-based network architecture, IoT solutions, and new-generation wireless communications solutions, we work with partners to develop innovative industry solutions and help customers achieve digital transformation and business success.”
In 2016, Huawei Enterprise BG achieved rapid growth in vertical industries. Huawei’s Smart City solution was successfully deployed in more than 100 cities in over 40 countries. In the finance sector, Huawei helped many large commercial banks in China complete infrastructure cloudification and served more than 300 financial institutions across the globe, including six of the world’s top 10 banks. In the energy industry, Huawei became the only ICT solutions provider among the members of the Global Energy Interconnection Development and Cooperation Organization (GEIDCO) and Huawei’s Better-Connected Grid Solution has served over 170 electric power companies in 65 countries across the world. In transportation, Huawei cooperated with more than 60 industry partners to serve railways and highways with a total track length of 220,000+ km and more than 15 airports with annual throughput higher than 30 million passengers. In manufacturing, they worked with KUKA and ABB to promote industrial upgrading to achieve intelligent manufacturing.
By the end of 2016, Huawei Enterprise BG had more than 12,000 global channel partners, over 2,000 service partners, and beyond 400 solution partners.
Overall, a major take from the Huawei Connect conference was its tagline “Grow with the cloud”. As the motto underlined, Huawei is placing public and private clouds at the heart of its strategy. And according to Mr Guo Ping, Huawei’s Deputy Chairman of the Board and Rotating CEO, The company will build a global cloud network based on its own public clouds, as well as clouds that it has built together with partners. Guo likened Huawei’s strategy to the three major airline alliances – SkyTeam, Star Alliance, and Oneworld – which take passengers wherever they need to go in the world. Huawei Cloud, he said, will open up the world to its users.
While being still a relatively new player on the world stage, in 2016, the enterprise arm of Huawei (EBG) focused on ICT infrastructures and the work with partners to drive digital transformation in key industries, including public safety, finance, energy, and transportation. With a sales income from the enterprise business reaching CNY40.7 billion (US$5.9 billion), an increase of 47% year-on-year. After five years of steady progress, Huawei has gone from a fledgeling in the enterprise market to market leader in a number of areas.
According to Gartner research, as of the first quarter of 2017, Huawei storage services serve 7,000 corporate customers globally, equal to the sixth-largest market share in the world. Huawei shipments and delivery capacity to the Chinese market are ranked first. Overall, Huawei server shipments grew 19.7%, ranking third in the world.
One of their strengths and strong differentiator on the market being this dedication to partnerships and collaboration. Words repeated again and again during the Huawei Connect conference.
The Platform and Ecosystem Strategy – Partners and Collaborations
In the cloud era, ICT transformed from being a dormant industry to becoming an enabling tool for digital transformation. With some differentiating characteristics: openness, diversity, exogeneity, resource integration, and be beneficial for all.
Huawei wants to be constructing the cloud ecosystem with these in mind. According to Yan Lida, President of Huawei Enterprise Business Group shared in his keynote speech during Huawei Connect. Huawei has three main principles regarding the cloud ecosystem:
First, expanding the business and expanding the market is more important than holding a bigger share of it. This is the road that Huawei wants to follow in the future to construct a cloud ecosystem. Interestingly enough, in the ecosystem, they do not pursue an “all for me” strategy. Instead, they are implementing a “using everything to my advantage” strategy to efficiently connect to outside resources and work together to create a future that benefits all.
Second, managing cooperation is more important than managing competition. In specific commercial environments, Huawei will play the role of “soil and energy”, adhering to the pipeline strategy and not competing with their partners.
Third, benefit sharing. they engage in sharing benefits with customers and partners. In doing so, they hope to gather worldwide talent, capabilities, and resources.
Currently, Huawei has already taken action in four aspects to promote the construction of the ecosystem. The first is commercial alliances, leading the direction of the industry, and expanding business together; the second is commercial strategic alliances, ensuring customers’ businesses succeed; the fourth is open source communities, achieving community cooperation and innovation; and the fourth is developer platforms, with the goal of introducing more players, activate innovation and promote the prosperity of the industry chain.
This dedication to collaboration and building partnerships resonates, beyond words and slogans, in figures:
By the end of April 2017, Huawei had established more than 300 ICT academies and 45 training centers around the world and contracted more than 100 training partners to provide capability development and certification services in 149 countries. On a side note, beyond direct business collaborations, through the Huawei Authorized Information and Network Academy (HAINA), they also worked with over 140 colleges and universities around the world, including the University of Reading in the UK, University of Sydney in Australia, University of Alicante in Spain, National University of Computer & Emerging Sciences (FAST-NU) in Pakistan, and City University of Hong Kong, and trained more than 5,000 students.
In July 2017, Huawei entered the challenger quadrant of Gartner’s 2017 data center network magic quadrant.
So far, 197 of the top Fortune 500 companies and 45 of the top 100 companies, have chosen Huawei as their digital transformation partner. This list includes SAP, Accenture, Deutsche Telekom, Volkswagen, Oracle, Honeywell, GM, ABB, Intel, Sony, the Russian Federal Savings Bank and more.
Their strategy remains fairly simple:
- Platform Strategy: By providing “innovative, differentiated, and leading ICT hardware and software infrastructures”, Huawei aims to build an open, scalable, flexible, and secure platform and help their customers address the challenges posed by digital transformation – and achieve business success.
The core of Huawei’s platform strategy is to invest intensively in technologies like Cloud Computing, Big Data, IoT, SDN, Mobile Broadband and to build an open, scalable, secure, and flexible platform.
The main difference between Huawei’s platform and other platforms is that “Huawei’s platform emphasizes cloud-pipe-device collaboration while the others not. Moreover, digital transformation cannot rely on one single technology, and the value of the cloud cannot be realized without other technologies. To capitalize on the value of the cloud, terminals need to collect vast amounts of data and utilize networks for transmission. This collaboration relies on decades of experience and represents Huawei’s most powerful capability”. (More)
- Ecosystem strategy: “Huawei is committed to nurturing a customer-centric, win-win, and sustainable ecosystem”. They deliver by continuously stepping up the construction of, and investment in areas such as industry alliance, business partnership, open-source community, and developer platform. In doing so, Huawei aims to form a “community of common interest” featuring what they describe as a mutually beneficial coexistence with partners.
Worldwide Deployment Of Openlabs, Gaining Deep Understanding On What Industries Need
To connect with partners in a deeper level, Huawei set up OpenLabs; their solutions cover public safety, finance, power, manufacturing, and every other domain. The plan includes investing 200 million USD to construct and run OpenLabs in the next three years so that by the end of 2019 the number of OpenLabs around the world goes from the existing 13 to 20. It doesn’t matter if you’re in Asia, Europe, the Middle East, or the Americas, there will be a Huawei OpenLab there.
Words in action: “In the digital transformation of industries, the businesses of our customers are a bigger driving force than the technology itself”. As such Huawei recognizes that in the transformation process, customers, partners, and Huawei each have their own unique advantages (customers understand their businesses, partners know how to transform the business needs of customers into industry applications, and Huawei knows how to utilize hardware and software ICT infrastructures to deliver efficient business support to customers).
All in all, Huawei’s strategy does sound like one of the simplest and most common sense take on business but, in the end, what truly differentiates them from most of their competitors is the actual implementation and commitment to follow this strategy.
A strategy that pays off just looking at some of their major partners in attendance at Huawei Connect, including the likes of Accenture, SAP, Chinasoft International, Intel, HGST, Toshiba, Seagate, Microsoft, Suse, Redhat, Arm, Oracle and Infosys.
By carrying out this joint innovation with partners centering around the business needs of customers, Huawei wishes to create a win-win ecosystem. This is the critical path followed by Huawei EBG to achieve a differentiated competitive edge and to enforce the company’s platform and ecosystem strategies. Successfully, judging by the results and numbers.
When Rats Gnawed The Wires
How do you know you are doing things well? When customers and partners say so.
“Digital transformation is not the ultimate goal, only measures. At Huawei, the goal is to help companies generate more value”. IT systems are built around user experience and that is what Huawei is keeping in mind at every stage of their relationship with partners or customers.
Among these, many were to be seen at Huawei Connect – and even more to be heard from.
Huawei is assisting Deutsche Telekom in the construction of an Open Telecom Cloud. Deutsche Telekom, ranked 90 in the Global Fortune 500 list, Europe’s largest telecom operator and the fifth largest telecom operator in the world. They are working with Huawei to construct this open cloud, based on Huawei’s cloud computing platform FusionSphere, which is based on OpenStack.
More than just technology, the open telecom cloud is already serving the European Organization for Nuclear Research (CERN), the Spiral Galaxy science cloud, Deutsche Telekom GIP, Octopus Cloud AG, European Parking System (EPS), EMUI, and other institutions and enterprises.
Partnerships happen in all industries and all types of roles. Digitalization is on the books for all and a necessary evil(?) to remain competitive if not alive.
DHL, a customer and a “user” feeding back experience to Huawei came with needs. Not to go digital but to improve the experience of their users. All of their users, internal (staff) and external (clients). The road to digital, in their case, a company already using tools to track, organize and deliver on a daily basis, featured a better use of cloud capabilities in order to make sense of their data but also improvements to actual physical processes.
They did bring in connected robot trolleys actually following workers around and freeing the latter from constantly stopping, loading, pushing the trolley further and repeating. In the same way, they finally made good use of smart glasses for hands-free scanning of barcodes. An easier, better and faster way of doing a somewhat repetitive and time-consuming task.
Another partner with another different, yet similar, story was Rob Newman, Head of Programme Management, Technology & Infrastructure, Dubai International Airport, describing how they partnered with Huawei to build a prefabricated modular data center with Tier III certificates from the Uptime Institute for both design and construction. The data center will carry services that cover almost every aspect of the airport, including flight information and airport operations, passenger transport and baggage services, video surveillance and more. By providing ICT solutions that are agile, rapidly deployable, reliable, energy-efficient and easily maintained, they allow to carry out highly efficient business operations for one of the busiest airports in the world.
Beyond the business cases and varied uses of technology, Huawei’s customers and partners were all expressing a similar idea of collaboration and smart thinking putting the actual experience at the forefront. A customer-first attitude born in the early days at Huawei but that seems to be infecting the companies they work with. An attitude that was borne out of an early episode in their history that’s since become something of a company legend. In desert and rural areas in China, rats often gnawed the telecom wires, severing customers’ connections. The multinational telecom companies providing service at that time did not consider this to be their problem, but rather that of the customer. Huawei, in contrast, viewed the rat problem as one the company had the responsibility to solve. In doing so, they acquired extensive experience in developing sturdier equipment and materials – such as chew-proof wires — which helped them later on to gain several big business accounts in the Middle East, where similar problems stymied the multinational firms.
The future… is in 10 years
Long-Term Thinking… Huawei plans the development of the company by decade, whereas most of their competitors plan it by financial quarter or year. Being privately held has allowed Huawei to work on its 10-year plans, while its competitors struggle to follow near-term fluctuations of the capital market.
The Enterprise Business Group, 6 years old, is only just beyond halfway of its very first 10 years’ plan. And already delivering in an impressive manner with every opportunity available to keep growing. Huawei has also adopted a popular Silicon Valley phrase of “Eating your own dog food,” meaning that the development and testing of new products, services, and business models are based on their own company’s needs before launching these technologies and capabilities to customers.
As such they prove to understand the market and needs better than most of their competitors in an ever-growing market.
From here, Huawei EBG is in prime position to keep growing, with partnerships which keep developing and allow the company to touch other sides of the business, beyond their direct targets.
By the end of 2016, enterprise business had more than 12,000 channel partners and 400 solution partners worldwide.
Not that the company would need to rely on third parties looking at their current position on the market(s). Yet, with their current growth, coupled with increased partnerships and an ICT market that keeps growing (and will most likely keep doing so with massive transformations ahead), the future looks bright for Huawei and its Enterprise Business Group.
For a quick look at where Huawei stands, Gartner, the world’s foremost authority on IT research and advisory, has released its 2016 Magic Quadrant for General-Purpose Disk Arrays report in which Huawei was named as a leader.
Huawei Ranks Third Globally for 2016 Q4 Server Shipments according to a market report released by Gartner. In 2017, Huawei has been positioned in the Challengers quadrant of the 2017 Gartner Magic Quadrant for enterprise firewalls. Its Container Data Center Ranks Number One Globally for Market Share Shipments in the IHS Report.
Huawei also ranks first in the leaders’ group of IHS Markit Optical Network Hardware Vendor Scorecard and its OceanConnect solution is now in the leader segment of the IoT CMP Platforms Scorecard recently published by IHS Markit.
Meanwhile, according to Gartner, ICT spending keeps increasing. Even the low spending on devices are due back on track in 2017
Worldwide IT Spending Forecast (Billions of U.S. Dollars)
|2016 Spending||2016 Growth (%)||2017 Spending||2017 Growth (%)|
|Data Center Systems||173||1.3||177||2.0|
Source: Gartner (October 2016)
Huawei has become a digital transformation facilitator working with its global partners to provide best practices and innovative ICT solutions to help companies around the world embrace digital transformation. In today’s fast-changing digital world, the Huawei Enterprise Business Group is ideally positioned to understand the needs of its customers and create a mutually beneficial ecosystem with its partners. And, in the end, keep thriving by not only servicing and selling but, first, understanding and catering for customers. All customers.
As a KOL (Key Opinion Leader) for Huawei, I can be invited to take part in various corporate events both produced by Huawei, as well as any other corporation. While Huawei, partners or other corporations may cover my travel expenses to these events, I’m not a paid spokesperson for Huawei or any other company; as such, nothing I say or write about is in any way required, nor forced by Huawei. My opinions whether related to products or companies, both positive and negative, are mine; and mine alone.
Also published on Medium.