Huawei Eyes the Cloud

The Chinese telecom equipment maker Huawei is planning to enter the Cloud Computing market.  The company announced their formal “business strategy” for Cloud Computing for North America earlier this year.

This should have been a non-news since Huawei has been doing bits and pieces with Cloud Computing for some time now.  What’s different though is the way they have made it abundantly clear to the business world that they are now going to be an active player in the business, rather than just a component manufacturer.  Ever since 2008-2009, Huwaei has been building high speed networking components which end up being used for Cloud related technologies/enablement.

This time though, they have said that they would enter Cloud Computing as an IaaS (Infrastructure-as-a-Service) player.   Their press release emphasizes a lot on partner focus, and that might just mean that they would enter into some kind of partnership with another player.  From their press release –

“We see an exceptional opportunity to work closely with our valued North American partners and customers to take cloud computing to the next level,” said Charles Ding, President of Huawei North America.

Huawei has a history of strong Research and Development (R&D) expenditure.  They are also known to be an aggressively pricing company, given that the end user might expect lower burden on their pockets.  They have proven themselves to be a strong marketer and aggressive growth driver in business lines they chose to enter. Why should this be any different ?

Currently, much of Cloud Computing research investment happens only by a few big players, e.g. Amazon, HP, Microsoft etc. When Huawei enters the market, the research spending would be a welcome service to the technology/industry in general.

Another difference that Huawei would bring in is the fact that they would bring telecom to the cloud. Till now, it has mostly been “business computing” and “storage” on the cloud.  Quote from their press release regarding this –

“…Designed to advance customers’ journey to cloud computing, the strategy involves working with leading North American partners to deliver a solution that will enable customers to expand service offerings, reduce costs, and bring telecommunications services to the cloud. “

Though it remains to be seen as to how much of real telecom services do come up to cloud or how much are they actually different from the existing business computing services offered by other players.

Another dimension to Huawei’s North American foray would be the political and faith angle.  Being a Chinese company (and a big one at that – with approx $23b annual revenue), they sport a tag.  Some countries have already blacklisted them for their “suspected links with Chinese military and defense establishment”.

Huawei benefits from a Chinese government program for investment into Cloud Computing.  And, Huawei is not the only company benefited by the govt venture.  Their 12th plan, has put Cloud Computing in a strategic technology choice. This way, there is a sure connection with the Chinese companies’ investment into cloud computing and their state body handling the IT and defense research/funding.  However, how much of the impression about Huawei involved in hidden govt agenda is not know.   The impact of this suspected connection on their North American foray remains to be seen.

Being a Chinese company, it’s even more volatile. Chinese hacker groups have been found to be responsible for multiple attacks on US e-establishments.   On the other other hand, China is one of the biggest trade partners of the USA.


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