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Leading New ICT — Enabling a New Industrial Revolution

Staying Customer-Centric

The concept of ‘the 4Ps of marketing’ was put forward by marketer E. Jerome McCarthy in 1960 — product, price, place, and promotion are essential to business success.

The ‘Product’ must be marketable for branding and promotion, while place or distribution (physical and virtual) is equally as important to marketing as channels are to sales. If the Huawei Enterprise Business Group (EBG) adopts the ‘integrated’ strategy, we must first ensure that the quality of our products matches the heights of our language. Marketing is impossible if any of the 4Ps is missing. However, good products alone cannot work either; price also matters as does branding. Customers should be the focus of our business. We should stay customer-centric and not be obsessed with integrated strategies and go-to-market processes.

BDII and Why ‘Leading New ICT’ is Important

Huawei’s 2015 Annual Report stated that the company has officially recognized the concept of Business-Driven ICT Infrastructure (BDII). I mention BDII because we have offered many different hardware boxes without a deep understanding of each customer’s business operations. As a result, the boxes don’t always match customer needs, begging the questions: Who are we in the eyes of our customers? What brand image has EBG built? Are we just a bunch of box makers?

Digital transformation has created significant changes in different industries in recent years. For example, various user and industry surveillance devices, such as smart electric meters, serve to convert physical information into digital data. The data is then transmitted through networks to data centers. During the entire data production process, the Big Data platform analyzes the data a second time, performs data mining, and generates new data. Digital transformation requires ICT restructuring, which means we must break out of IT system silos. This typical cloud-pipe-device architecture is one of Huawei’s core strengths.

Technologies like the Internet of Things (IoT) cannot drive digital transformation by themselves. Digital transformation in multiple industries is driven by a combination of technologies, with the IoT being only one of them. Such transformation depends on a very powerful physical network to connect massive amounts of data to the Internet. Processing tremendous quantities of cloud computing data in real time would be impossible without cloud computing platforms. Without Big Data technology, data analysis and mining would not be available and data value could not be realized. Huawei believes these innovative technologies are the foundation of this round of digital transformation, and they constitute a distinctive characteristic of ICT transformation.

Leading New ICT — Enabling a New Industrial Revolution

From Technology and Open Platform to Ecosystems

When we first discussed the connotation of ‘Leading New ICT,’ we realized that it should not only feature technology and a platform but also an ecosystem. Huawei’s expertise is in the IoT, cloud computing, and Big Data. To fully leverage these advantages, we must build an open, flexible, elastic, and secure platform. Based on this platform, we must then build an ecosystem, which includes developers, partners, and standards. We have opened our platform to third-party developers through eSDK, so now, third-party developers — whether they have two employees or 2,000 — can develop corresponding industry applications.

The future points to hybrid cloud services to provide elasticity. For example, if a customer uses Huawei OpenStack-based clouds — either public or private — we must enable data migration between them. Elasticity means that, when resources on a private cloud are not sufficient to compute data during peak hours, auto-scaling switches will redirect the workload to a public cloud. When the peak hours have passed, the system automatically switches back to the private cloud. This is what cloud elasticity is all about.

The last feature of the platform is security, which involves firmware, networks, and applications. Building secure End-to-End (E2E) platforms is Huawei’s mission. To fulfill this mission, Huawei needs the involvement of third-party security specialists and application developers. Through joint efforts, we will ensure system and network security at many levels.

Opportunity Favors the Prepared

In April 2016, Global Equities analyst Trip Chowdhry predicted that the technology manufacturing sector would layoff 369,000 employees over the next 12 months. The predicted layoffs are attributed to the operational efficiencies gained by themselves and their customers due to cloud computing and native mobile applications. And, while companies like Amazon, Google, and Microsoft are very successful in cloud computing, other companies are in a tough spot. Therefore, first and second tier technology firms are expected to take the initiative by transforming themselves at the cost of jobs.

Digital transformation poses serious questions:

  • What can Huawei learn from the transformation of these technology companies?
  • Is it possible that these companies will leave the hardware market following the completion of their transformations?
  • Does Huawei need to follow these companies to transform itself?
  • If so, how should Huawei differentiate itself from these other companies during their transformations?
  • Who are Huawei’s target customers and what strategy should be adopted after their transformations?
  • Should Huawei take the opposite approach and focus on the hardware market instead?
  • If we are to focus on hardware, how should we address the challenges imposed by the white box trend?

The 2016 revenue goal for the Huawei EBG is USD 6 billion. Personally, I think our goal should go beyond USD 10 billion. Over the past two years, EBG has made stable, solid, and unremitting efforts to push our business forward. If we can correctly answer the questions I have raised, we will truly be leading new ICT.

By Yan Lida

President, Enterprise Business Group, Huawei Technologies Co., Ltd.