- The cloud revolution will go far beyond what people imagine it will be.
- But, the transition will be slow: Now and for much of the cloud era, everyone will be half-in, half-out of the cloud.
- Markets in the cloud era will be divided into different segments, where dominance by one or two companies in an industry will be impossible.
“If you want to go fast, walk alone; if you want to go far, walk together.” The cloud era is not dissimilar to this saying – openness and collaboration are the keys to enabling Huawei, telcos, and our partners to thrive together.
A lasting new era
It’s hard to imagine exactly what changes the cloud will bring, because looking into the future is always difficult. So, let's reverse direction and look back to the Industrial Revolution. The first steam engine was invented in 1860 by Scotland’s James Watt. Back then – 156 years ago – it was impossible to imagine that the next century would bring with it such a flourish of roads, railways, bridges, airports, harbors, and other man-made structures. Could people then have pictured what our lives today would look like? Probably not – the changes have been too vast. We believe that the cloud revolution will be the same, far outstripping the power of imagination.
We also believe that the cloud era will see a market divided into different segments, where dominance by just one or two companies in a given industry will be impossible and where every company worth anything will find its own place. We’re now ready to explore for ourselves the railways, roads, airports, harbors, and bridges of the cloud revolution. We’re now ready to ask the question: What exactly is the business logic of the cloud?
Cloud is connectivity
The connectivity engendered by cloud includes both the number and quality of connections. The first telco, Bell, was founded 140 years ago. Since then, global carriers have connected 7 billion mobile subscribers and 800 million broadband subscribers with 7 million wireless base stations, 14 billion km of fiber strands, and 1.3 million km of submarine cabling.
Huawei has built 2.68 million base stations – that’s one in every three across the globe. Our base stations can be seen everywhere, including the world's northernmost city, Longyearbyn, and its southernmost, Puerto Williams. At Mount Everest base camp, Huawei and China Mobile jointly constructed the highest base station on earth at more than 5,000 meters above sea level. Such extensive coverage is no easy task. It takes massive investment over multiple decades to build a global communications infrastructure, and so it’s unlikely to become obsolete any time soon by a few drones or balloons.
Cloud is now shifting from a support system to a production system. Virtual reality (VR) and augmented reality (AR) are growing in stature, as are their bandwidth and latency demands.Cutting latency to 20 milliseconds requires a data center every 200 km, and that’s why telcos are the best partners for developing the cloud. Likewise, telcos have an advantage when it comes to the connections that underpin the industry’s move to the cloud: Their hard-earned infrastructure is both a power base and a competitive edge.
Cloud is service
The key challenges of building a cloud are running it and delivering services over it.
In Dongguan, for example, Huawei helped install 300,000 cameras in the city, which breaks down to 36 cameras per 1,000 people. In comparison, the US averages 96 cameras for every 1,000 people. To achieve the same coverage, Dongguan needs another 500,000 cameras. The international consultants HIS estimates that the number of cameras will double every two years, meaning that Dongguan will soon be home to 1 million cameras. Between 5 percent and 10 percent of these will be offline for maintenance every year. Who has the capacity to deliver the maintenance? We’ve identified many different scenarios that need to be addressed, including security for construction sites, restaurants with open kitchens, rural development, and CCTV for enterprises. Different needs require integrated solutions, so cloud service providers need to be in constant contact with customers to fully understand their needs. They must also be deeply integrated into local markets to deliver powerful services. Global telcos possess huge offline strengths, with a total of 5 million employees, 200,000 local exchanges, and countless customer service points across the globe. Thus they are in the best position to address offline challenges.
Another example is the e-Government Cloud in Jiaxing City. Jointly built by Huawei and China Telecom, construction was relatively simple, with service migration the major project feature. Jiaxing city government gave us a target: Residents should only have to queue up once to access any administrative service. We had to connect all municipal departments – industry and commerce, tax, police – to enable smart e-government. Huawei, China Telecom, and our partners worked with each department to find the right algorithms and how to connect them. That’s why cloud is a service.
Cloud is transformation
Telcos everywhere are talking about digitization and cloudification, and they have vast untapped potential to deliver cloud services, big data analytics, artificial intelligence, the Internet of Things, and other new technologies and services.
Two years ago, our Carrier Business Group (BG) launched the Three Cloud platform comprising the Customer Solution Cloud, Experience Cloud, and Knowledge Cloud. The project moved our customer solutions, experience, and knowledge onto the cloud. We obtained 30 billion pieces of data from third parties, and used eight dimensions to analyze our customers' networks to better understand their needs and pain points. Many local staff distilled their practices and experience into algorithms. The algorithms that proved to be successful in market tests were named after their inventor, so now Huawei has a string of network algorithms named after its researchers. This system has proven to be a powerful motivator for unlocking the creativity of our experts.
After two years, our Three Cloud platform has 113 channels, 6 communities, and over 800 experts available for online consultation. As the platform has matured, we’ve seen an explosion in demand for expert consultation. Experts who give more get more followers and recognition.
Many of our customers are worried about whether they can adapt to the networks, markets, and speed of the cloud era. We should not be afraid of experimenting, including jointly with our partners. By trying new things, we will find partners who share the same goals and be able to transform with cloud.
Cloud is trust
Over the next decade, enterprises will move 85 percent of their applications onto cloud. But, cloud’s shift from a support system to a production system won’t be quick, because the transition will involve processes, organization, profit models, human resources, and knowledge. Our partners and customers will all face challenges alongside us. Now and for much of the cloud era, everyone will be half-in and half-out of the cloud; for example, verticals that are crucial to our economic well-being, safety, and security like governments will naturally be extremely cautious about sweeping changes.
We must also engender the trust of our customers. When we signed an agreement to develop public cloud with Deutsche Telekom (DT), we faced a new market with new tech and new processes, which led to disagreements. But, we built up strong mutual trust with DT’s senior management, including the CEO. And that gave us the ability to experiment, to change processes and organizational structures, and ultimately to earn DT’s trust.
Trust is not a simple contract. It means persevering to achieve mutual goals, compromising to recognize the interests of our partners, and facing unknowns together.
Cloud is ecosystem
Openness and collaboration are key features of the current era. This past year, Huawei has worked with DT, China Telecom, Telefónica, and other leading global carriers on public cloud development, and our success portfolio is growing into something that can contribute much to the global ecosystem.
Moving upwards together
Cloud is connectivity, service, transformation, trust, and ecosystem. Many players worry that they could lose their competitive edge overnight and get left behind; however, in reality now is the time to jointly experiment and grow together.
Everyone tends to overvalue the short-term impact and undervalue the long-term impact of cloud – it’s here for the long haul. And to travel far, you cannot travel alone.