China’s Huawei eyes US$10b business in cloud infrastructure and services

Huawei Technologies, the world’s largest telecommunications equipment supplier, expects to build a US$10-billion-a-year business in cloud computing infrastructure and services by 2020 to tap rising global demand.

Deputy chairman Ken Hu Houkun, acting chief executive under Huawei’s rotating leadership structure, on Wednesday said the company was on track with that goal since that operation was already growing faster than its other business segments.

Reaching that scale would enable Shenzhen-based Huawei to mount a strong challenge to the current crop of leading global suppliers of cloud equipment, including Hewlett-Packard Enterprise, Cisco Systems and Dell.

“We see huge and clear opportunities,” Hu said at a Huawei event in Shanghai. “The new trend for traditional industries, such as manufacturing, health care and education, as well as the public sector, is to upgrade their operations by using cloud computing technologies and solutions.”

Cloud computing enables companies to buy, sell, lease or distribute online a range of software and other digital resources as an on-demand service, just like electricity from a power grid. These resources are managed inside data centres. “Cloud” refers to the internet as depicted in computer network diagrams.

Global spending on cloud infrastructure products, including servers, enterprise storage systems and Ethernet switches, rose 22 per cent to US$29 billion last year, up from US$24 billion in 2014, according to data from research firm IDC.