“It is the best of times and it is the worst of times.” After decades of working in the ICT industry, we have acquired a deep understanding of this industry and how it is being reshaped. Continued growth in data, applications, and connectivity is putting mounting pressure on enterprise IT budgets, which typically remain static. To address this issue, enterprises are increasingly investing in new third-party platform ICT technologies, such as cloud computing, Big Data, the Internet of Things (IoT), and Artificial Intelligence (AI), to help them innovate and grow.
Yan Lida, President, Enterprise Business Group, Huawei Technologies Co., Ltd.
According to statistics, the investment in new technologies in 2016 accounted for nearly 50 percent of customers’ total ICT budgets and this number will grow to 71 percent over the next five years. However, this brings both challenges and opportunities.
Digital Transformation: Why Are Fortune 500 Companies Choosing Huawei?
Since forming the Huawei Enterprise Business Group six years ago, we have experienced two distinct phases of growth. During our first three years the group’s average growth rate was 28 percent, and in the last three years it was 45 percent. The 2016 contribution from global partners accounted for 76 percent of total revenue.
In recent years, more and more leading enterprises from various industries are choosing Huawei to drive their digital transformation. In fact, based on internal data, 172 of Fortune 500 enterprises and 43 of Fortune 100 enterprises have chosen Huawei. Delivering these successful digital transformation engagements would not be possible without support from our partners.
As the business continues to grow, Huawei’s brand awareness is also rising rapidly within the industry. According to the latest statistics from Interbrand, an internationally renowned institute of brand research, Huawei climbed from 88th to 72nd place in the 2016 ranking of global brand awareness. In addition, Ipsos, one of the world’s largest market research companies, commented in its 2016 brand research report that “promising,” “energetic,” “innovative,” and “progressive” increasingly define Huawei.
Let us take a look at some recent digital transformation cases.
Schindler is the world’s second largest manufacturer of elevators and escalators, with one million operating elevators, escalators, and moving walkways around the globe. Huawei and Schindler are partnering on a joint project named the Internet of Elevators and Escalators (IoEE), which has now entered the deployment stage. We plan to enable the networking of millions of elevators and escalators across the world in the next few years. This will allow operational data on the elevators and escalators to be transmitted to a monitoring center in real time for preventive maintenance, which will improve the operational security of elevators and escalators, and reduce labor costs. By making elevators and escalators smart, the traditional elevator and escalator industry can gain huge benefits from implementing digital transformation. Our customer said: “Digitalization has been integrated into everyday service and has become an indispensable part of Schindler’s DNA.”
In China, Huawei has used multiple technologies, such as cloud, Big Data, and the IoT, to help customers achieve digital transformation. For example, Huawei provided a media cloud solution to People’s Daily to facilitate its transformation from traditional media to omnimedia. Other examples of Huawei’s diverse solutions deployed in China include a converged Big Data platform for the Industrial and Commercial Bank of China, an IoT metering solution based on eLTE wireless broadband technology for the State Grid Corporation of China, and a Smart City solution for the City of Dunhuang.
Within today’s digital landscape, we believe the cloud has developed from stage 1.0 to 2.0. Cloud 1.0 was created and led by Internet companies that provide OTT services, while cloud 2.0 is deeply integrating the cloud into various industries.
‘Platform + Ecosystem’: Huawei Enterprise Business Group’s Strategy in the Digital Era
In the era of digital transformation, the Huawei Enterprise Business Group’s strategy has evolved from our founding strategy of ‘being integrated.’ We aspire to become the driver of digital and intelligent social development, and be the best partner to help customers achieve digital, cloud, and smart transformation which is critical to future business success. Based on our main focus of ICT infrastructure, Huawei will work with our partners to build an open, collaborative, and mutually beneficial ecosystem.
Our strategy comprises two elements: platform and ecosystem.
The core of our platform strategy is to invest intensively in technologies to provide innovative, differentiated, and leading ICT software together with hardware infrastructure to build an open, scalable, secure, and flexible platform and work with our partners to help customers achieve digital transformation.
I think the main difference between Huawei’s platform and other platforms is that Huawei’s platform emphasizes cloud-pipe-device collaboration. Digital transformation cannot be achieved with any one single technology, and the value of the cloud cannot be realized without other technologies. To capitalize on the value of the cloud, terminals need to collect vast amounts of data and utilize networks for transmission. This collaboration relies on decades of experience and represents our most powerful capability.
The digital transformation of an industry requires participation from customers, partners, and Huawei. Customers bring to the table a deep understanding of their business; partners excel in industry applications; and Huawei provides an ICT platform that helps customers realize their transformation journey. We aim to build a digital transformation community with multi-party collaboration to accelerate joint innovations. We will develop our ecosystem from four perspectives, namely; industry alliances, business alliances, developer platforms, and the open source community.
Huawei has adopted a popular Silicon Valley phrase of “Eating your own dog food,” meaning that the development and testing of new products, services, and business models is based on our own company’s needs before launching these technologies and capabilities to customers.
Huawei is a large enterprise with 180,000 employees and branches in approximately 180 countries and regions across the world. We process more than 600,000 orders every year. We have focused on driving IT agility and efficiency throughout our organization. While many enterprises use 70 percent of their investment on Operations and Maintenance (O&M) and just 30 percent for transformation, at Huawei the numbers are reversed: We spend 70 percent of our IT investment on transformation and 30 percent on O&M. Furthermore, we plan to achieve full digitalization in the next three to five years. We believe that our experience and capabilities gained from this process will help customers from various industries.
A good digital transformation strategy cannot succeed without paying close attention to key details. Huawei has identified 10 key detailed issues regarding the building, utilization, and management of the cloud (see ICT Insights Extra cover story: Embrace and Integrate with the Cloud to be a ‘Digital Enterprise’). Many people believe that digital transformation has a 50/50 chance of failure. However, by identifying and resolving detailed issues throughout the transformation process, I firmly believe our probability of success is far greater.
During digital transformation, customers, partners, and Huawei have their own positioning and values. Huawei focuses on the ICT infrastructure platform, while many partners provide industry applications at the upper layer. This approach has created value for customers in multiple fields, such as public safety, manufacturing, and finance.
Today, Huawei officially shares its ‘platform + ecosystem’ strategy and I believe that our collaboration with customers and partners will lead to successful digital transformation and drive new opportunities.