Takeaways from Huawei Global Analyst Summit 2016
Apr 19, 2016
Earlier this month, I had the pleasure to attend Huawei’s global analyst summit which was held in the modern metropolis of Shenzhen, in Southeast China. The three days’ agenda was pretty packed with more than 250 analysts and 100 media professionals attending several keynotes, presentations, breakout sessions, and one-to-one meetings.
At this flagship company event, analysts had the opportunity to not only interact with Huawei’s key executives, but also informally talk with key customers, partners and opinion leaders about Huawei’s multinational networking and telecommunications equipment and services business.
What follows is a summary of what I think was the most notable news from the Asian ICT giant:
- In 2015, Huawei’s revenue reached $60.8 Billion, an increase of 37 percent year-over-year.
- Huawei’s Carrier Business grew 21.4 percent due to its continued success in the networking and infrastructure domain, including the massive deployment of Huawei’s 4G wireless networks, the gradual movement towards fixed broadband networks, major achievements in the core network domain, and the company’s continued investment in its global service and carrier software business.
- New announcements in 2015 included a new mobile broadband blueprint for the next five years; emphasis on a new vision under the name of ROADS; the announcement of increased investment in services; and the launches of both an open cloud ecosystem strategy and an open ICT developer ecosystem. The main notion behind ROADS (Real-time, On-demand, All-online, DIY, and Social) has been to help global carriers to embrace the digital transformation through Huawei’s end-to-end SoftCom networking architecture. Leveraging cloud computing, software-defined networking (SDN), network functions virtualization (NFV) and Internet-based operations, Huawei has partnered with dozens of leading global carriers, established 36 joint innovation centers and commercially deployed over 70 NFV and SDN projects.
- Huawei’s worldwide services revenue has been growing at a CAGR of 35 percent between 2012 and 2015. Currently, services represent 16 percent of Huawei’s total revenue; however, the company is making considerable efforts to increase its services footprint relying on a wide network of service partners.
- Huawei is also building an open cloud ecosystem based on OpenStack and investing considerably in an open ICT developer ecosystem. As explained by CMO Willian Xu, Huawei is asking all telcos to join forces with industry partners to build an open ecosystem. Additionally, the company will be investing $1 billion over a period of five years to build a developer ecosystem. Today, Huawei’s open network APIs have increased from hundreds to thousands.
- In the Consumer Business, Huawei noticeably grew its sales by 72.9 percent in 2015, shipping more than 108 million smartphones around the world and securing the company’s position as one of the top three global smartphone brands in the industry. Product innovation continues to distinguish its mobile product line, with global brand awareness jumping from 65 percent in 2014 to 76 percent in 2015. Today, smartphones such as the Mate 7, the Mate 8, the Mate S, Nexus 6P, and P8 are shipping millions of devices, considerably competing against the Apple and Samsung product line.
- While most of Huawei’s 2015 revenue came from its carrier and consumer business, Huawei’s enterprise business has been gradually expanding, growing by 43.8 percent in 2016 to account for 7 percent of the company’s sales. Key success stories were highlighted during the event, including different case studies in the government, finance, transportation, energy, education, and ISP sector. Most of the cases relate to the networking and infrastructure side of the company.
- Huawei also shared successes in the UCC space. Huawei UCC revenue grew by 13.3 percent in 2015, with Huawei UCC solutions now being offered in 67 countries. The main highlights in the UCC field relate to the cloud-enablement of Huawei’s complete UCC stack, the offering of a converged communications experience across devices, the launch of new video conferencing endpoints, and the showcase of China Mobile offering collaboration as a service built on Huawei’s UC solutions. Going forward, Huawei’s UC, contact center, and VC divisions will fall under the Core Network division which is thought to further increase the success of Huawei’s enterprise communications within organizations around the world.
- Huawei is also expanding its channel ecosystem with more than 300 tier 1 partners and more than 8,000 tier 2 partners. Today, 76 percent of Huawei’s revenue comes from partners, with average revenue per partner increasing at about 33 percent.
During this event, I realized how broad and important Huawei’s portfolio is in the overall technology world. Let’s just remember that Huawei started as a PBX switch reseller 29 years ago moving from a business of $3,500 in sales to a business of $61 billion. . Today, the Asian vendor has built over 1,500 networks, helping over one-third of the world’s population connect to the Internet. What I would like to see, going forward, is Huawei investing even more aggressively in the UCC realm and competing fearlessly against Cisco, Microsoft and the other UCC vendors. It has all that is needed to succeed.
Mohamed Alaa Saayed
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