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Huawei Technologies Co unveiled a US$100 million initiative to expand its cloud services operations in the Asia-Pacific region at its inaugural Huawei Cloud Spark Founders Summit held in Hong Kong and Singapore on August 3, 2021. Photo: Handout

Huawei plans big leap to rank among Asia’s top cloud services providers in next three years

  • Huawei’s push into the Asia-Pacific cloud services market heats up its competition with Amazon Web Services, Microsoft Azure and Alibaba Cloud
  • The telecoms giant has earmarked US$100 million to encourage start-ups in the region to use its cloud services platform
Huawei Technologies Co plans to crack the top ranks of cloud services providers in the Asia-Pacific region, as the company pivots into a growing market amid the struggles of its smartphone and network equipment businesses under US trade sanctions.

“We are looking to become a top three cloud services provider in the Asia-Pacific in the next three years,” Zeng Xingyun, president of Huawei Cloud operations in the region, told the South China Morning Post in Hong Kong this week. “In five years or more, we aim to do even better than that.”

That ambitious goal would position Huawei, which was added to Washington’s trade blacklist in 2019, against major competitors Amazon Web Services (AWS), Microsoft Azure and e-commerce giant Alibaba Group Holding’s cloud unit – the top three infrastructure-as-a-service providers in the Asia-Pacific last year, according to data from tech research firm Gartner. Alibaba owns the Post.

Huawei Cloud was the No 2 cloud services provider in mainland China – the world’s second-largest cloud market behind the US – in the quarter ended March, with a 19.7 per cent share, according to a report by research firm Canalys in June. Alibaba Cloud continued to dominate the domestic market in the same period, with a 39.8 per cent share.


Huawei founder on cybersecurity and maintaining key component supply chains under US sanctions

Huawei founder on cybersecurity and maintaining key component supply chains under US sanctions
Shenzhen-based Huawei on Tuesday announced that it has earmarked US$100 million to encourage start-ups in the Asia-Pacific to use its cloud computing platform.
Huawei’s strategic pivot into cloud services was specified by Ren Zhengfei, the company’s founder and chief executive, in an internal speech he delivered in November last year. Ren said US sanctions-hit Huawei must make cloud services its priority and pursue a “breakthrough”, following the lead of industry leaders AWS and Microsoft Azure.

The stakes are high for privately held Huawei, as public cloud services in the Asia-Pacific market are predicted to reach US$48.4 billion this year, up from US$36.4 billion in 2020, according to a report by tech research firm IDC in March.

Cloud computing services enable companies to buy, sell, lease or distribute a range of software and other digital resources as an on-demand service over the internet, just like electricity from a power grid. These resources are managed inside data centres.

Jay Chan, vice-president of Huawei Technologies Co’s Asia-Pacific operations. Photo: Handout

“This is the area we want to aggressively grow,” Jay Chan, vice-president of Huawei’s Asia-Pacific operations, said in an interview. “We are pouring resources into software, which is free of the impact from [US] sanctions.”

Huawei, the world’s largest telecoms equipment maker and formerly China’s biggest smartphone vendor, has been forced to make adjustments because of the US sanctions, according to Chan. The company has struggled with tighter restrictions imposed last year, covering access to chips developed or produced using US technology, from anywhere.

“So we are making some strategic decisions for our entire business,” Chan said. “We hope that we can accelerate our growth on software and cloud services.”

The challenge for Huawei is to keep pace with the expansion initiatives of the world’s leading cloud services providers. AWS, Microsoft Azure and Google Cloud accounted for 61 per cent of the US$47 billion in total cloud spending in the second quarter, according to Canalys.

Huawei earmarks US$100 million for Asia-Pacific start-ups to use its cloud services

Steady growth for Huawei Cloud would be on the back of winning multiple major deals with government clients, financial institutions and logistics companies, according to Zeng.

“We have formed good relationships with many industry leading clients in various countries, which has helped us expand our business in the Asia-Pacific over the past few years,” he said.

The company counts as an advantage the many relationships it has built through the years as a telecoms network equipment supplier to various governments in the region. It has also trained a group of more than 40,000 people in the region on information and communications technologies, so they can play a major role in helping in the digital transformation of industries across Asia.

“In the region, we place a very high strategic importance on Singapore,” Chan said.
While many cloud services have become commoditised, Chun Mun Hong, chief executive of online car marketplace UCARS in Singapore, said Huawei Cloud differentiates itself in emerging areas like artificial intelligence.

Echoing that difference, Shonali Krishnaswamy, chief technology officer at analytics company AIDA Technologies in Singapore, said many companies in the city state plan to transform themselves from old-school software vendors into software-as-a-service platform operators, which would increase demand for cloud service providers like Huawei.