Huawei, a privately owned company, has eyes set on China, and with a $950 million budget they’re getting ready to make a big impact on one of the biggest, most desirable markets in the world. The communications leader is honing in on 5G technology with an aim to optimize connectivity. At the same time, the company is launching their first Chinese public cloud with an estimated July delivery date. According to Huawei’s executive Eric Xu, who recently spoke at the company’s yearly summit, it’s simply time to get a piece of that growing cloud computing pie in China. With growth rates well over 40 percent according to IDC research firm, it’s the obvious expansion choice.
Xu says, “Huawei has run into difficulties in its plans for global expansion in the past because of concerns in some countries, particularly in the US, over whether the company has links to the Chinese government and could be a security risk.” However, expansion is only half of what Huawei has on its plate. Research is of equal importance, particularly in the 5G landscape. Yang Chaobin, the company’s chief marketing officer, promised at the summit to have 5G networks on the market no later than 2020, which is an aggressive timeline considering how much R&D is still in order.
During the summit, Huawei also debuted the 2015 Global Connectivity Index, which ranks 50 economies for connectivity, digital transformation and ICT usage. China came in at number 23, well outside the top ten rank, but experts agree that it will continue to move up the list at lightning speed. Making existing networks better and grooming this market for better connectivity will help drastically, and Huawei plans to be at the helm of making this happen. According to the Asian Cloud Computing Association (APAC), who published a March 2015 report on growth, the entire Asian region is counting on a more stable infrastructure in order to achieve growth.
Mobile readiness is also playing a role in China (as well as almost everywhere else in the world). The Alipay mobile company has reported incredible mobile ecommerce growth, and Gartner analysts are estimating an overall annual growth of 14 percent with no signs of slowing down. Obviously, mobile growth is a great niche in the internet services atmosphere, but legislation can get in the way. Particularly in China, where sharing source code with governments is a reasonable expectation, this has companies shying away from “mobile” in favor of broader goals like cloud computing.
Getting Past the Red Tape
The Chinese legislation which would force companies to share their code with the government is pending, which means there’s no telling what surprises may pop up or when a decision will be made. There are also other possible issues on the horizon, like the fact that China can technically earmark IP addresses for malware and there’s the ongoing censorship hot topic—which is linked to DDoS attacks (particularly with GitHub). Tech in China is a desirable commodity, but it comes with plenty of hurdles. However, Huawei seems to think it’s worthwhile, especially when half of their efforts are steeped in research and not a product/service release.