Huawei, one of the leading names in Smartphones and surely a Telecomm giant in China, has begun venturing into public cloud services and right from the outset, it has set its eye on some of the biggest players on cloud like Amazon and Alibaba as potential competitors in the field. An ambitious step to say the least, the firm operating from the city of Shenzhen has a long way to go given its extremely slow profit growth in recent years.
Earlier, they used to operate on private cloud domains and they fared well there. Hence, the shift is self-evident since a major portion of the cloud market happens on public cloud spaces. Dedicating themselves for this cause has certain implications in terms of shifting business strategies too. Unlike private cloud, public cloud has shared infrastructure instead of a dedicated one which means you need fine tuning of your cloud services, and one should given the increasing amount of business occurring on cloud.
From hardware to software
Huawei, a company that is globally recognized as a hardware company for telecommunication industry, has been trying to capture the software market for some time now for the extra bit of revenue. They have decreased expense in Smartphone investment and hence, the telecommunication infrastructure is currently static and hardly developing. However, the resource is being committed to the growth of software, especially to counter the nearest competition in the form of Alibaba. Other competitors are entering the market too, partnering with cloud giants like IBM.
The Huawei management claims that they are not competing with anyone, but the scenario tells everything. They also affirm that Huawei has a huge customer base in terms of mobile phones and it will be exploited to make sure that their public cloud venture is available to a wider audience. While they do agree that players like Microsoft and AWS have an edge over others because they started the earliest, there is obviously a possibility of coexistence too.
No discount, great service
Huawei has also mentioned very straightforwardly that they will not be giving services for extremely cheap rate but they will be ensuring that the money is worth it. With government also making a move towards cloud, it seems that Huawei has decided at the right time. The three year action plan from the ministry focuses on the development of cloud computing. Forecast tells that there is going to be demonstrable growth occurring in the domestic cloud market.
Huawei sees the next decade to the period when cloud computing becomes an everyday affair. As per prediction, Huawei will enjoy a business turnover of 10 billion Yuan by the next decade, which is a healthy percentage of the forecast amount of 432 billion Yuan. Cloud contracts are difficult to win and Huawei, with extensive contact inside the state, has an advantageous position. Its dominant presence in Europe is another benefit to spread itself around the west for new pool of cloud buyers. The competition, however, is yet to take place because of the difference in magnitude between Huawei and other cloud giants.