Huawei besieged on new European front after US targets fast-growing cloud infrastructure market

Huawei Technologies, already getting squeezed out of Europe’s vast market for the next generation of telecom equipment, is under siege in another fast-growing business: cloud computing.

US officials have been lobbying European lawmakers and industry leaders to use Western companies – while shunning Huawei – to build data centers and offer infrastructure to handle the growing tide of information.

As part of a European tour last week, US Under Secretary Keith Krach met executives including Deutsche Telekom CEO Timotheus Hoettges and Meinrad Spenger, the head of Spanish telecom carrier MasMovil, to urge them to ditch Chinese vendors of cloud infrastructure on data-security concerns.

“Look at this as an extension of that 5G,” Krach said. “Clouds are really important, whether it’s in the service cloud or in data centers themselves. This is a big deal.”

Pressure from Washington affects one of Huawei’s fastest-growing businesses. China’s largest technology corporation by sales has in past years accumulated an impressive roster of clients, including Deutsche Telekom, France’s Orange and Spain’s Telefonica. It is now seeking to expand its reach to customers such as oil companies, power grid operators and logistics providers.

While Alibaba Group Holding operates a larger cloud business and WeChat-operator Tencent Holdings is not far behind, Huawei is more vulnerable given the Trump administration has managed to convince some governments in the region to exclude its 5G networking gear. Europe’s cloud infrastructure is a US$12.4 billion business that grew 33 per cent this year from 2019, according to market researcher IDC. US players dominate, led by Amazon.com’s AWS and followed by Microsoft Corp., IBM, Google and Oracle Corp.