Huawei – a hidden force in European cloud

Some weeks back PAC attended Huawei’s Eco-connect Europe 2017 event, and although the company’s expertise spans many interesting areas including 5G and IoT, this author’s interest was squarely on their cloud activity.

Earlier this year, the company made clear its intent to become a global leader in agile infrastructure, establishing a new top level business unit focused on Cloud. This puts Cloud at the same level of priority and visibility as the company’s pre-existing business units: Core (telecommunications equipment for carriers), Consumer (smartphones, watches etc.) and Enterprise (telecommunications and IT equipment and solutions for business). In other words, Huawei believes that Cloud will be as important to its future as telco hardware and smartphones already are - and it is already a global leader in both those markets.

Huawei’s big bet on cloud is based on OpenStack technology. Although that cloud platform was originally created as an open source alternative to AWS, today OpenStack has morphed into a private cloud platform for larger users, and separately into a Network Function Virtualisation (”NFV”) solutions for Telcos.  Possibly because of that Telco NFV use-case, Huawei has over the years acquired deep expertise with OpenStack, which has a well-deserved reputation for being a complex and difficult platform to manage yourself without expert assistance. 

Although Huawei has only been active in cloud for around four years, in that short time it has already achieved significant presence as a white-label delivery partner in European cloud markets.  Two years ago it announced that it had partnered with T-Systems to deliver the Open Telekom Cloud, which was subsequently rolled out to customers from early 2016. Later last year, Telefonica also announced that it had partnered with Huawei to deliver cloud services based on OpenStack, initially in its Americas territories, with Spain “coming soon”. Finally earlier this year, Orange Business Services announced that it would also offer its “Flexible Engine” public cloud in collaboration with Huawei. OBS’s plan was initially focused on Europe and APAC, with plans for Africa and Middle East later in 2018. 

All three European telcos have signed up to a joint risk, joint reward model, where Huawei provides the hardware platform and deep OpenStack support, and the telco provides all localisation and customer-facing support services. The local partner is also responsible for taking the lead on Sales, although Huawei also has local sales support capability.  

In parallel to the Telco cloud strategy, Huawei also addresses the private cloud needs of large organisations its Enterprise division. Again, the sales channel is 100% indirect i.e. the sale is always led by a local partner. As before, the solution is mostly built on OpenStack, although hybrid solutions can also include extensions to hyperscale clouds (AWS, Azure etc.)

The big picture of Huawei’s cloud presence in Europe is truly impressive – one company is poised to become one of the very largest providers in cloud, potentially rivalling the hyperscalers in some markets, and all through an indirect channel strategy. While some potential buyers will be deterred Huawei’s origins in the People’s Republic of China, in most cases the predominant presence of a local partner will set clients’ minds at rest. Overall, Huawei is a powerful force in European cloud, powering three of the leading European alternatives to the obvious North American cloud providers.