Industry Cloud Stimulates Business Re-innovation
User-centricity has become a new paradigm for the cloud. Indeed, in the technology-driven era of Cloud 1.0, we hear of many concepts — the public cloud, private cloud, and hybrid cloud — all of which are defined and understood from a technical perspective. In the era of Cloud 2.0, despite continuing to be a core technology that propels digital transformation, the cloud is expected to stimulate business re-innovation among various industries. The focus is no longer on cost reduction but rather on creating greater value. In a sense, the cloud is no longer a mere technology.
In this article, I want to present a different perspective; that is, the perspective of industry customers talking about what Huawei calls the ‘industry cloud.’
There is no doubt that the cloud era has arrived in a big way. Leading companies of various industries are actively exploring ways to use the latest digital technologies to inject new vitality into the processes, production methods, and even business models of traditional businesses. Against this backdrop, the cloud is poised to change the industry landscape.
Smart Life, Better Life
If we consider that city management substantiates an industry, then the conventional concept cherished by this industry would be ‘governance’ in which governing bodies each set up their own chimney-like information systems that traditionally lack information sharing and struggle with service coordination.
By comparison, the Smart City is people-oriented with service as its core value. To meet the needs of citizens and businesses and provide them with better services, city administrators are using innovative cloud computing, Big Data, and other digital technologies to integrate the information systems of different departments.
Real-time, Intelligent, and Personalized Service
Dramatic changes are taking place in the banking industry. For years, customer resources were under leveraged by traditional banking services that could not effectively share or utilize the data. Now, with the aid of the finance cloud and Big Data, banks have begun a process of user-centered transformation that emphasizes the people-oriented integration of systems and data to deliver an optimal real-time, on-demand customer experience. That is why in his book Bank 3.0 , author Brett King predicted that, in the future, “banking is no longer a place you go, but something you do.”
Breaking the Limitations of Time and Space
Healthcare is an industry that relates to everybody’s well-being. Nevertheless, the scattering of healthcare resources among hospitals and health institutions has long hindered quality healthcare service improvements.
Early on, the healthcare industry adopted the traditional disease-centered mode. Now, empowered by the healthcare cloud, the industry has constructed a better connected system that centers on people and connects all roles, medical processes, and health data involved in healthcare service. Such a connected system enables effective sharing of information and medical resources beyond the limitations of time and space.
Reinvigorating Traditional Media
Content is the core for the media industry. Traditional forms of media are producer-centered in which producers are responsible for integrating content collected by media professionals.
The rapid penetration of intelligent terminals and the mobile Internet has changed the way people consume media. With an intelligent terminal, anybody can find and distribute content and become both a producer and a consumer of media. The media cloud provides a new ICT architecture that allows the media industry to integrate various content and resources, including broadcast, TV, newspaper, and social media, to build an open and convergent platform that is accessible anytime and anywhere.
Engine Nearing a New Round of Revolution
It is no exaggeration to say that the industry cloud is becoming the engine for a new round of the industrial revolution. Cloud platforms, network connections, and intelligent terminals are forming a new type of information infrastructure while data has become a fourth production factor following people, finance, and materials.
Industry Cloud Essence
What, then, is the essence of the industry cloud, this so-called engine of the industrial future? Looking around the world, we find that one core function of all governments is to provide services for the public. In finance, risk control continues to be the lifeline of banks despite the emergence and penetration of Internet applications. In manufacturing, Mr. Fang Hongbo, Chairman and President of Midea Group, recently talked about the role of the Internet in Midea’s business development strategy: “Midea is not an Internet company,” he said. “However, we must digitalize our business by utilizing the power of the Internet, mobility, and business intelligence.” I quite agree with Mr. Fang. Each industry is experiencing profound changes and whatever those changes are, they cannot change the essential characteristics that shape an industry.
The most pertinent analogy is perhaps one made by Huawei CEO Mr. Ren Zhengfei, who said in 2014: “The Internet hasn’t changed the nature of things. A car is still a car, and bean curd is still bean curd.”
Service-driven Digital Restructuring
New technologies, including cloud computing, are gradually becoming a part of the production systems of various industries. While Cloud 1.0 provided enterprises with general computing platforms, storage resources, and office suites, the Cloud 2.0 era will restructure enterprise IT systems, organizational structures, and business processes, subsequently rebuilding their business models.
Smart Cities, Smart Grids, omni-channel banking, and digital railways are typical examples of utilizing the industry cloud to transform traditional industries. Although the industry cloud presents a tempting vision, this vision will not become a reality overnight. Reaching a level of technological readiness to deploy solutions requires a process of systematic engineering that involves several factors that need to be carefully considered.
Key Factors in the Implementation of the Industry Cloud
A Cloud-Pipe-Device Collaborated ICT Architecture
Future digitized enterprises are expected to construct new ICT infrastructures centering on the generation, transmission, and processing of data.
After years of development, technologies ranging from cloud computing and the Internet of Things (IoT) to smaller, less power-consuming terminal chips and communication modules have attained a high maturity level. Meanwhile, connection technologies are making continuous advances, from 4G to 4.5G and eventually to the future 5G. As a result, networks are growing to connect billions of terminals and effectively transmit mass data searched by terminals to cloud data centers in real time. Thanks to mass data computing, analytics, and mining capabilities offered by cloud computing and Big Data, the real value of information will be fully extracted and utilized.
Through the following cases, we will gain a clearer understanding of how technologies communicate with and depend upon one another to accomplish digital restructuring of industries through cloud-pipe-device collaboration.
Cloud Needs Networking. In the Smart Transport industry, cloud- and Big Data-based applications provide cities with intelligent traffic management. By utilizing real-time traffic data, applications can perform predictive analysis of traffic conditions and generate early warnings on congestion that may occur, which allows timely and accurate travel-route planning.
Additionally, city administrative authorities are now stepping up the construction of ‘devices’ because they understand that without the massive amounts of traffic data collected by terminal devices, the intelligence of the cloud is of no significant value and cannot realize its full value.
Devices Cannot Stand Alone. Similarly, several device-related issues that occur during digital transformation cannot be resolved using devices alone. At Australia’s South East Water, a Victorian government-owned corporation, statistics show that Australia was losing about 30 billion liters of water a year due to pipe leakage. This problem had triggered huge losses among water companies. To address the issue, South East Water developed water pipe monitoring terminals that were installed in the water pipes and equipped with pressure, vibration, and other sensors to detect various pipe issues such as leakage in real time and collect and send the data to the cloud in real time. Based on the data, the cloud performs smart monitoring and management of water pipes. However, in actual deployment, South East Water discovered that the traditional people-to-people 3G technology used was not suitable for connecting things and did not meet the requirements of water pipes for communications services featuring wide coverage, low power consumption, broadband connections, and low expenditures.
South East Water collaborated with Huawei to introduce the Narrowband Internet of Things (NB-IoT) to the network side. Once fully deployed, this wireless network technology specially designed for IoT connections provides low-powered, low-cost networks with increased coverage that has the potential to unlock enormous value for water utilities and their customers.
Monetizing with Industry-oriented Solutions
In the cloud era, data is the core asset of enterprises. For example, Huawei developed a credit investigation system for China Merchants Bank (CMB) based on a Big Data platform. With the Huawei solution, credit investigations were shortened from 15 days to minutes, greatly boosting the development of CMB’s credit card business.
However, data itself does not speak. In our practice, we find that industries vary in terms of data generation scenarios, data formats, and data mining objectives. Therefore, the true value of data can be extracted only when considering the particular industry scenario involved. In such a case, accumulated experience in a particular industry becomes very important.
Huawei has long remained committed to joint innovations with customers and industrial application developers to help address differences between industries. The ICT solutions leader has collaborated with global customers to set up 36 joint innovation centers around the world. These customers are all leading enterprises within their respective industry, such as the Saudi Arabian Oil Company, Schindler Group, and KUKA Robotics Corporation.
Smoothing Service Migration
Unlike the Internet industry, many traditional industries have a large number of legacy systems and huge amounts of data. For these industries, service migration is a challenging issue that must be properly dealt with during the implementation of the industry cloud.
Service migration involves different scenarios, including migration of traditional services to the cloud and migration of services between different cloud platforms. Implementing smooth service migration and ensuring a consistent, secure, and uninterrupted service experience is a challenge that may require a one-stop cloud service by a professional team.
In addition to smooth service migration, enterprises need to build up their digital operational capabilities. Only enterprises capable of independently operating and managing the cloud can maximize service innovation and operational security.
Challenges also mean opportunities. While enhancing their service migration and cloud operation capabilities, enterprises can also seize opportunities to build up new competitive advantages.
Need for an Ecosystem Platform
The digital transformation of an enterprise is a complicated makeover that involves a series of hardware and software systems. No enterprise can accomplish this task alone. A good platform will help enterprises focus on business optimization and innovation without having to care about the complicated hardware and software systems at the bottom layer.
The mobile phone is a case in point. Before the emergence of smartphones, mobile phone manufacturers developed everything by themselves: software, hardware, and applications. This resulted in limited functions. The emergence of smartphones changed the rules of the game. Now, manufacturers only need to focus on the research and development of hardware and operating systems. They deliver smartphones as a basic platform on which applications developed by third parties can run. Consequently, millions of applications have emerged, greatly extending the functions of smartphones.
Similarly, enterprises need such a platform for their transformation. The platform must be open and elastic, and flexibly adapt to different applications deployed by enterprises. In addition, this platform must be highly secure and reliable. Only such a platform can muster the forces of application developers to form a vigorous ecosystem in which all parties work together to support the digital transformation of enterprises.
Becoming a Trusted Partner
We live in an era of business re-innovation — a time where everything revolves around service. While pursuing their own digital transformation, many leading enterprises are also thinking about how to apply their digitalization experience to serve more traditional production-oriented enterprises.
General Electric (GE) announced setting up a strategic partnership with Huawei in the industrial Internet field in August 2016 (see GE interview, Page 32). As it plans to leverage its long-term accumulated advantages in the industry field and open up its capabilities to other companies, GE has set a very good example for trusted leadership.
“In the next 20 to 30 years, we will evolve into an intelligent society and experience a large and far-reaching technological revolution that is beyond our imagination,” Huawei CEO Ren Zhengfei said. During the process of transformation toward the industry cloud, we must remain trustworthy and select a powerful platform that can allow us to confidently meet the challenges ahead.
Huawei is committed to building a platform that features cloud-pipe-device collaboration and constructing a sustainable ecosystem in which all players can thrive and prosper. In March 2016, Huawei’s Enterprise Business Group (BG) released the new branding and marketing theme ‘Leading New ICT’ at CeBIT 2016 in Hannover, Germany. This theme expresses the company’s strategic vision to pursue industry-oriented digital transformation.
As a concrete measure to carry forward the strategic vision of Leading New ICT, Huawei constructed and is now operating OpenLabs in Suzhou, China, Munich, Germany, Singapore, Mexico City, and Dubai, United Arab Emirates. Another three OpenLabs are being constructed and scheduled to open later this year in Moscow, Russia, Lagos, Nigeria, and Bangkok, Thailand. Each OpenLab is a center of innovation, solution development and verification, and user experience that is jointly operated by Huawei, customers, and partners. Moreover, we have established 36 joint innovation centers with industry leading customers around the world. These long-term and continuous investments are a concrete expression of Huawei’s long-term commitment to its partners and customers.
(Based on keynote speech delivered by Mr. Lida at Huawei Connect 2016, from August 31 to September 2 in Shanghai, China)