Can China’s Huawei transform itself from hardware giant into a leading software provider with cloud?
- Huawei began its cloud business in 2010 but the unit only began to grow fast in recent years
- The cloud business is less dependent on chips but faces stiff competition from Alibaba and Tencent
Chinese telecoms giant Huawei Technologies Co is taking time to set strategy for its cloud business as the Shenzhen-based company pushes ahead with a broader effort to turn itself from a hardware maker into a software provider in the face of harsh US sanctions.
Huawei formally disbanded its cloud and AI business group earlier this month – just one year after its creation – and separated cloud from the server and hardware storage operation. It eventually appointed rotating chairman Eric Xu Zhijun as chairman of the cloud unit and Richard Yu Chengdong, former chief executive officer of Huawei’s consumer business and another close confidante of Huawei founder Ren Zhengfei, as the cloud unit’s CEO.
Peng Zhongyang and Tao Jingwen, two company veterans, were also named as deputies at the unit.
Xu said this week during an analyst summit that the restructuring was aimed at “enhancing the position of the cloud business” and would serve as “part of the company’s initiative to strengthen software” as Huawei tries to reduce its demand for chips. US sanctions currently deny Huawei access to the most advanced chips, hitting its ability to make cutting-edge smartphones and network gear.
Earlier this week, Huawei’s cloud unit also announced an ambitious product release schedule for 2021.
Huawei began its cloud business in 2010 but the unit only began to come to prominence in the past few years. In January 2020, cloud services and AI were combined to create a new business group, putting it on an equal footing with Huawei’s three core revenue drivers – consumer, carrier and enterprise.
