Over the course of three days last week, Huawei executives took the stage at Huawei Connect 2016 to outline five major trends shaping the technology industry and how the company will capitalize on them to advance its business.
Those trends are digitization, cloud, industry clouds, open source, and IoT.
Digitization is a familiar story that tells of both opportunity and threat: Companies need to reach customers via the Web and mobile devices, and provide compelling experiences powered and/or enhanced by technology.
At the same time, companies have to become more agile internally to better serve customers, and to take advantage of new tools and technologies (for example, mobile, Big Data) to transform existing businesses and create new opportunities. Organizations that fail to embrace digitization risk disruption by existing competitors and upstarts alike.
This digitization story is told by just about every tech company with hardware or software to sell, but that doesn’t mean it’s a fairy tale. While Uber and AirBnB haven’t put taxis and hotels out of business, they are applying real pressure on incumbents to match the frictionless, tech-driven experiences these startups provide.
The second theme that Huawei emphasized was cloud. Digitization and cloud are closely conflated in Huawei’s vision of the world. That’s because Huawei believes organizations can use the cloud to help transform themselves into digital businesses thanks to the flexibility, scale and new development models that cloud enables.
Huawei’s role in this regard is two-fold. First, Huawei will sell the infrastructure (routers, switches, servers, storage, software, and so on) that will enable telcos and service providers to build clouds to serve their own customers.
Second, Huawei will itself offer cloud services. It already offers IaaS in China, and the company announced a couple of SaaS offerings last week, both targeted at service providers. One is a SaaS-based Business Enabling System that creates a service catalog and customer ordering portal for service providers. The other is a service that lets a provider build a video on demand system, for instance if a local or regional service provider wants to start offering video content to subscribers.
When asked, Huawei executives said the organization had no plans to go up against public cloud such as AWS and Azure (at least not in North America).
3. Industry Clouds
A third theme, or perhaps sub-theme, was the notion of industry clouds. Unlike AWS or Google Compute Engine, which are general-purpose IaaS offerings, Huawei anticipates the rise of smaller, industry-specific clouds designed to match the needs of verticals like finance and manufacturing.
Huawei aims to be the arms provider to enable third parties to build and offer these vertically-oriented industry clouds.
As a strategy, this makes sense. Huawei’s core buyers want to offer new services to their own corporate customers. An industry-specific cloud service may not have as large an addressable market as vanilla IaaS, but it does create opportunities to offer value-added features and services—and charge more for them.
Like any big IT company located in Silicon Valley, Huawei preaches a gospel of openness. Customers say they want “open” solutions because they don’t want to get locked into a vendor. Vendors promise “open” solutions to disguise their desire to lock in customers.
Of course, “open” is a box into which you can stuff any meaning you like. Does it mean your software is open source? Does it mean you interoperate with competitors’ products? Does it mean you offer an API to interact with third-party systems?
Just how open is Huawei? I’m really not sure. I do know the company took pains to flout its work with the open source community. For example, Huawei gave a keynote slot to Jim Zemlin, executive director of the Linux Foundation, who congratulated Huawei for its code contributions to various projects, including OpenStack, Hadoop, and Open-O. (Open-O is a new open source project, overseen by the Linux Foundation, to build an orchestration system for telcos, service providers, and network operators.)
Huawei certainly recognizes that open-source software can be a force-multiplier for a technology company. It has also recognized (as have other major tech companies) that by ramping up code contributions, bug fixes, and project sponsorships, it can influence the direction open-source projects.
Huawei is also banking on the appeal of open source software in real ways. Case is point is a new SDN controller that the company announced at Huawei Connect. The Agile Controller 3.0 is built on ONOS, an open-source network operating system that targets carriers and service providers. The new controller also supports OpenDaylight, which is SDN controller software targeted at enterprises.
The fifth and final theme of Huawei Connect was IoT. If industry predictions are correct, we can expect to see billions and billions of sensors get attached to just about everything. And organizations will rely on networks to help extract value from those sensors. Clearly Huawei sees an incredible market opportunity here.
Huawei demonstrated its interest in IoT by announcing a partnership with Schindler, which manufactures and services elevators and escalators.
Schindler plans to outfit its elevators with sensors to collect maintenance and performance information. The goal is to enable predictive maintenance, where the company can identify a potential problem before a part fails and takes an elevator out of service.
The sensors will connect to an edge gateway to process data locally and send it to a cloud service for analysis, processing and storage. Huawei says it will provide the SDN infrastructure to connect edge gateways to the cloud.
Meanwhile, on a tour of the company’s research facility in Shanghai, journalists were shown prototypes of sensors, which would connect across 5G networks, that could be used in agriculture, municipal utilities, and supply chains.