Today, Huawei announced a significant internal reorganization aimed at boosting business development. The Cloud BU (Business Unit) has been elevated to a company-level organization and integrated directly into Huawei Group. This move reflects Huawei's strategic emphasis on its cloud services and its ambition to strengthen its position in the global cloud computing market.
Back in March of this year, Huawei's Vice Chairman and Rotating CEO, Xu Zhijun, introduced the Cloud BU as part of the product and solution department. At the time, he mentioned plans to hire an additional 2,000 employees in 2017 to support the growth of their public cloud services. Interestingly, the Cloud BU was initially led by Zheng Yelai, who also heads Huawei’s IT product line. Within just six months, the Cloud BU transitioned from being a secondary unit to a primary organizational entity, reflecting Huawei's rapid evolution in cloud computing.
The recent restructuring is particularly noteworthy because it marks the Cloud BU’s elevation to a fully independent division within Huawei. This change means that the Cloud BU will now be evaluated separately and will feature in Huawei's 2017 financial reports. It will also establish its own HR department, CTO office, strategy and business development team, and financial management functions. Importantly, this adjustment does not affect Huawei’s core management structure.
Huawei’s founder, Ren Zhengfei, has played a pivotal role in driving the company's cloud initiatives. At the beginning of this year, he began visiting provincial leaders across China and inked deals related to cloud computing, big data, and smart city projects. Domestically, these efforts have yielded numerous partnerships. Internationally, Ren Zhengfei has also traveled extensively, meeting with leaders in various countries to discuss increasing Huawei’s overseas investments and expanding its cloud operations globally.
During Huawei's analyst conference in April, the company's Managing Director and President of Strategy Marketing, Xu Wenwei, set an ambitious target for digital transformation across industries. He emphasized that cloud services are essential for achieving digital transformation, both for telecom operators and businesses at large. To this end, Huawei has committed to investing heavily in creating an open public cloud platform and fostering a robust cloud ecosystem. Xu Wenwei boldly declared that Huawei’s public cloud would surpass Alibaba Cloud within three years.
Huawei faces stiff competition not only from domestic players like Alibaba Cloud but also from global giants such as Amazon Web Services (AWS) and Microsoft Azure. Huawei's Vice Chairman Xu Zhijun acknowledges that AWS and Microsoft dominate the U.S. and developed markets. However, Huawei leverages its extensive relationships with local telecom operators in Europe and enjoys a competitive edge in developing countries. He believes that Huawei can coexist harmoniously with these tech titans in the future.
At the analyst conference, Zheng Yelai, President of Huawei Cloud BU and IT Product Line, addressed the challenges posed by fierce competition in the public cloud sector during interviews with media outlets like Sina. Zheng Yelai noted that the enterprise cloud market holds immense potential. Huawei differentiates itself from competitors by adhering to an open cloud architecture based on OpenStack, ensuring customers aren’t locked into any single service provider. Furthermore, Huawei’s two-decade-long history of serving enterprises has earned it customer trust, alleviating concerns over data security and user privacy.
Huawei also boasts a vast network of 12,000 global partners, who actively participate in its cloud business ecosystem. However, despite these strengths, Huawei has chosen not to engage in price wars, unlike competitors such as Tencent Cloud and China Telecom, which have resorted to bidding strategies involving extremely low prices.
In August, Alibaba reported impressive financial results, with cloud computing revenues reaching 2.431 billion yuan and exceeding 1 million paying users for the first time. This milestone makes Alibaba the first Asian cloud computing company to achieve such a feat. As Alibaba continues to expand its cloud offerings and reduce prices, Huawei must navigate a highly competitive landscape where technological innovation and strategic partnerships are key to success.
While Huawei possesses unique resources and technological advantages, the ongoing price wars and formidable rivals pose significant challenges. Whether Huawei’s cloud business can achieve substantial progress remains to be seen, but the company’s commitment to differentiation and collaboration suggests a promising path forward.
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