Huawei in massive telco migration to cloud

The Chinese tech giant is emphatic about industry adoption of new base services with total cloud migration.

A worker sits under a Huawei logo in Shenzhen on April 1, 2016. Huawei saw net profit rise 33 percent year-on-year for 2015 reaching 5.7 billion USD, and said revenue for the year was 395 billion yuan, a year-on-year increase of 37 percent. / AFP PHOTO / Aaron TAM

It was suitably misty in Shenzhen as China’s Huawei announced a strategy of massive migration of its telecommunications platform to the cloud.

The occasion was the telco’s annual global briefing to media and analysts, and it was emphatic about the industry adopting new base services with total cloud migration.

Huawei again highlighted the huge sums it is pouring into research and development: 250 billion yuan ($A51bn) from 2006 to 2015, a spend that eats into overall profit.

Nevertheless the company has been on a roll, recently reporting revenue of 395bn yuan in 2015 for enterprise, business and carrier services, or a 37pc increase. That included a 73pc increase in consumer based revenue.

In the consumer space it was seeking to compete with high-quality devices and was stepping up efforts to build a global service system for them.

When it came to the Internet of Things (IoT), the task of moving to the ‘net had barely begun, with 99pc of devices with sensors not yet connected, the company said.

Huawei executive director William Xu estimated that IoT would be a 600bn yuan device market by 2020.

Huawei rotating chief executive Eric Xu focused on the telco infrastructure firm’s move to the cloud, with the ultimate goal of enabling a “ROADS” experience to customers.

ROADS means a real-time, on-demand, all online, digital communications and social media experience model and is the firm’s buzzword.

The company’s strategy was to fully move products and solutions to cloud and Mr Xu hoped Huawei could become a promoter and leader in full cloud. Only then would the company be successful in its transformation.

“Equipment, network, service and operation — all of these have to move to cloud,” he said.

He said the transformation also involved rethinking the services and applications that telcos were best positioned to deliver as networks moved towards more intelligent operation.

On existing services, when it came to VOIP (voice over IP), the user experience had “not been that compelling, not that great”, Mr Xu said. Other forms such as voice of LTE and voiceover broadband loomed.

Telcos had to rethink these services to effectively compete with OTT (over the top) internet providers, the ISPs.

Then there is video. Mr X said video should be positioned as a basic service for telco operators and telcos should offer a base for providing more native cloud services.

Only through transformation could telcos be agile and competitive and those who moved fastest potentially win future competition, he said.

Huawei also was building a data analytics aggregation and mining platform and wanted to lead in cloud migration of software architecture. “We’re committed to building an ecosystem with consumers in the centre,” he said.

Huawei said it wanted to redefine the benchmark of ICT infrastructure design with 10Gps bandwidth, 1ms of latency with 100 connections per person, with a projected usage of 1.7GB data per user per day.

It wanted to unleash the potential of enabling 100s of billions of connections to the Internet of Things, with “giga fibre”, “giga copper” “giga coax” and “giga hybrid” technologies with a promise of speeds of up to 1,000 megabits per second.

Making 5G a reality, all-optical fibre networks, and an application driven network were key aims.

Developers also were key to the company’s strategy. Huawei was investing 1bn CHY over five years to create a developer centric eSDK (ecosystem software development kit), with an aim of cultivating one million developers by 2020.

The company had established more than 10 labs worldwide for innovation and rapid commercial deployment.

Huawei annually presents a five-year rolling plan of coming operations to media and analysts.

* Chris Griffith travelled to China courtesy of Huawei.