Chinese smartphone giant and telecoms equipment maker Huawei has formally announced its intentions to become a global provider of public cloud services. The company aims to compete with Amazon and Alibaba in order to become a global leader in the sector. Huawei confirmed that it plans to recruit more than 2,000 employees that will form its new cloud computing division.
President of the new unit, Zheng Yelai said that the company previously focused on private cloud and that this was a success - before indicating that its new purpose was to now strengthen their public cloud offering. Public cloud services involve shared data infrastructure, rather than dedicated infrastructure built for single customer. Consultancy Gartner has predicted that the market for public cloud services will reach $383 billion by 2020 which is a significant increase from $247 billion this year.
Analysts have suggested that by expanding in cloud computing, Huawei a traditionally hardware focused organization can continue to develop software based revenue at a time of slowing growth in smartphone sales and reduced spending on telecommunication infrastructure. In China, its biggest rival in public cloud services will undoubtedly be Alibaba Cloud. In addition to this, the latest market entrant is conglomerate Dalian Wanda Group Co Ltd in partnership with International Business Machines Corp.
Zheng refused to be drawn on when Huawei aims to overtake Alibaba – which is also a client of Huawei’s IT infrastructure and services. However, deputy chairman of Huawei’s board, and one of three rotating CEO’s, Eric Xu, stated that the organizations network of telecoms client gave the firm a ‘unique advantage’. Xu said: "I believe we can build upon our advantages accumulated over the years. Compete and coexist with AWS and Microsoft, I believe that is the trend we are going to see. Our strategic focus will be on our telecom partners cloud transformation.”
The Ministry of Industrial and Information Technology published a Cloud Computing Three-Year Action Plan earlier this week in which it forecasted the domestic cloud computing industry to grow 430 billion yuan ($62.32 billion) by 2019, from 150 billion yuan in 2015, and declared that it believes two or three leading global players will emerge. Huawei earlier said it expects its cloud computing revenue to reach 10 billion yuan by 2020.