In an exclusive interview with Charles Yang, President of Huawei Middle East, the leading telecom vendor’s role, priorities, strategies, and outlooks have been put into detail with relation to the ongoing digital transformation in the region and the COVID-19 pandemic’s massive influence to the fourth industrial revolution.
Mr. Yang rationalized how Huawei’s unwavering commitment to innovation brings value and results to the society and its ecosystem partners. With initiatives on 5G, cybersecurity, ICT talent, and other products and solutions, Huawei is ready and willing to work across the entire ICT value chain to make the future a more prosperous and sustainable one for all.
Ongoing digital innovation in the Middle East is lighting up every industry's future. What do you think makes Huawei stand out in its role as a strategic ICT partner to governments and organizations in the region today?
At Huawei, we see enormous opportunities to help support the digital transformation of the region, and in turn build the digital economy of the future.
To do that, I think it all starts with having a customer-centric mindset. We must always create results for our customers. We can only do this by striving and delivering the best possible user experience—whether that is for a government entity, a multinational enterprise, a telecom operator, or an individual consumer. We continue to invest strongly in technology, human resources, and our physical footprint in the Middle East. We have large, locally-based teams dedicated to everything from solution design to deployment, standardization, technical support, and much more.
Closely tied to this theme is an unwavering commitment to innovation. Huawei’s R&D investments over the past decade have exceeded USD110 billion. As just one example of technology innovation, we can look at the area of 5G. Huawei began 5G research as early as 2009, has invested USD4 billion in 5G so far, and has the highest number of 5G patents of any company globally. The result is that we have worked on many of the signature 5G network rollouts in the Middle East to date.
All of this is based on open collaboration. We have continuously advocated for an open approach to innovation, focusing on constructive dialogue, cross-industry cooperation, and exchanging expertise with different countries in the Middle East and worldwide. Working together within an ecosystem allows for shared success for individuals, businesses, and governments. In fact, Huawei has established 13 Open Labs around the world—including in the Middle East—to support open collaboration for shared success.
I would also add that bridging the digital skills gap is another important objective and differentiator of Huawei in the Middle East. We are supporting the region's digital future through various education and training-oriented CSR initiatives. Programs like our Seeds for the Future initiative and Huawei ICT Competition are just a few that have had tremendous success in the Middle East, promoting a greater understanding of and interest in the technology field while encouraging participation in the region’s growing digital economy.
How do you see the role of ICT having evolved as a result of the pandemic this year, and is there a roadmap now for boosting economic recovery?
We have all witnessed the role that technology can play in societal transformation, especially over the last year. Applications based on 5G, AI, cloud, and big data have been vital to helping organizations and individuals navigate the challenges of the COVID-19 pandemic. New applications are enabling remote education, telework, entertainment, and much more. Moreover, these technologies have been utilized by healthcare organizations in applications such as digital temperature checks, pandemic tracking, and so on, effectively helping to contain the pandemic where possible.
We can build on this template as an ICT industry and as a society to boost economic recovery. While COVID-19 is our priority for today, the post-pandemic world will need an innovative approach towards economic recovery and improving quality of life; making businesses smarter and creating a more inclusive world in which everyone has the opportunity to thrive. It is not about one specific solution or initiation. To create the most value in a society empowered by connectivity, we must ultimately focus on open innovation and inclusive development.
The development of 5G in the region, particularly the Gulf, is truly world-leading. What is Huawei's plan to keep up with the demands and opportunities this innovation brings?
Let me start by saying that Huawei is proud that many of the leading telecom operators in the region have chosen the company as a 5G technology partner of choice. We were part of many of the first-phase 5G commercial rollouts in the Middle East, and have continued to expand those networks with our partners. We believe that whatever geography or industry you’re looking at, 5G success first requires a 5G network that provides the best user experience. This guides how we innovate at Huawei around 5G.
In countries where 5G is developing faster, operators have seen faster revenue growth, and been able to open up new revenue streams. To build an effective 5G-led business cycle, we believe more resources should be invested in four aspects: unifying 5G standards, technology readiness, ecosystem support, and exploring business models that can benefit all industry partners.
In particular, we see an opportunity to advance the 5G value proposition for businesses. The real value of 5G now transcends the telecoms industry and has transformative implications for the economy as a whole. We refer to this as 5GtoB applications. Today, the Huawei 5GtoB Suite provides industry networks with intelligent and precise planning, simplified on-demand provisioning, and proactive network O&M for the planning, construction, maintenance, and optimization phases of business networks.
In selecting suitable industries for 5G deployments, operators should choose target industries by looking at four factors: demand, affordability, replicability, and technical feasibility. They should also define the scope of their offerings to serve local needs. Operators can act as network providers that offer connectivity services, but they can also serve as cloud service providers, or even system integrators that provide end-to-end integration services.
Such use cases require ongoing innovation. In 5GtoB, for example, 5G standards need to be coordinated with industry standards faster, and enterprises should look to integrate 5G into their core production processes to help them go digital and intelligent. With this in mind, Huawei recently launched several 5G products and solutions oriented to "1+N" 5G target networks. Supercharged by industry-leading innovation, these products and solutions will help promote multi-antenna technology to all bands and all scenarios to build leading 5G networks.
Underpinning all of this 5G development is cooperation with the public sector. Governments in the Middle East especially have set very ambitious agendas that have digital transformation as a cornerstone of success. Some of these programs look 10, 20, or 50 years into the future. By engaging public leaders today, we can innovate to support the businesses of tomorrow, and assist nations in achieving their national development visions.
Looking to other areas, Huawei's global revenues from its Enterprise Business Group grew substantially this year. What do you attribute this to, and what is your outlook for the rest of 2021 for this group?
Allow me to first say that, at Huawei, we believe enterprises must work together to embrace the era of digital transformation, of which Huawei can be a leading partner. Digital transformation has never been more in the spotlight as a result of the events of the past year, with the pandemic affecting all industries around the world. In this era of rapid digitalization, we aspire to create the most value for our enterprise customers and our ecosystem partners.
That ethos is reflected in the revenue trends you have mentioned. The revenues from our enterprise business globally in H1 2021 were approximately USD6.6 billion. We had also achieved robust growth throughout 2020, with a year-on-year revenue increase of 23%. Over 700 cities and 253 Fortune Global 500 companies worldwide have chosen Huawei as their partner for digital transformation.
Again, part of this comes down to customer-centric innovation. We have developed more than 100 scenario-based solutions that cover over 10 industries including smart cities, finance, energy, transportation, and manufacturing. Our products and solutions, such as HUAWEI CLOUD, intelligent IP networks, Intelligent OptiX Network, as well as others in computing, data centers, and data storage, have become increasingly competitive within the market. We have combined a number of our cutting-edge products in order to meet customers' differentiated needs.
In particular, the HUAWEI CLOUD has developed rapidly. The company has already been placed in Gartner’s famed Magic Quadrant for cloud database management. Gartner now ranks Huawei at the fifth position globally in the IaaS market, with over 200% growth year on year in 2020. HUAWEI CLOUD works with more than 20,000 partners, including more than 14,000 consulting and over 6,000 technology partners, and has brought together 1.8 million developers. To date, over 4,500 applications have been launched on the HUAWEI CLOUD Marketplace.
Naturally, we recognize that our achievements are made possible only by the hard work and dedication from ecosystem partners across all industries and domains. Earlier this year, for example, we announced a new channel strategy that embraces a collaborative, win-win approach for distributors, resellers, system integrators and alliances. This new direction stems from the belief that the company's long-term success is dependent on the success of the ecosystem it operates in. The company's channel architecture and channel policies are thus based on four key measures – profitability, simplicity, enablement, and ecosystem.
With robust ICT standardizations and cybersecurity benchmarks crucial to expanding the region's digital economy, how have you approached these priorities to date in 2021, and what priorities does the industry need to address in the near future?
As the importance of digital technology continues to rise, so too are the requirements of cybersecurity. With increasing cyberattacks, all industries are taking cybersecurity more seriously. Cyber defense thus requires strengthened global cooperation. It is not the responsibility of one company or country; governments, technology companies, and other stakeholders need to cooperate on unified laws and regulations to protect the digital economy and ensure fair access to innovations that can serve future generations. A safer network is our common obligation.
At Huawei, we feel it’s essential to engage the entire digital ecosystem through openness and collaboration to harness unified international standards that mitigate challenges in the cyber ecosystem. We have time and again emphasized the need to work within a standards-based framework. Our actions speak even louder than our words. Huawei has participated in more than 360 industry standards organizations, held more than 300 important positions in these industry standards organizations, and actively submits proposals to industry standards organizations, making significant contributions to the development of these standards.
Today, Huawei’s top-down cybersecurity governance structure supports the success of its business in the Middle East and around the world. The Global Cyber Security and User Privacy Protection Committee (GSPC), headed by Huawei’s Global Rotating Chairman Mr. Ken Hu, is Huawei’s highest cybersecurity management body. The GSPC is in charge of developing Huawei’s security strategy and plans, as well as manages and oversees how departments such as R&D, supply chain, marketing, sales, and so on structure their security teams and ensure security in their business activities. Along the way, we adopt an “ABC principle” – Assume nothing, Believe nobody, and Check everything based on open and verifiable technical standards.
Looking outwards, we are encouraged to see a growing desire from stakeholders in the region to work together to build this heightened level of security. For example, national cybersecurity strategies being drawn up by governments now incorporate contributions from security experts in the private sector, technology companies, and academia, in addition to policymakers. Huawei has been part of numerous national and regional panels, action groups, and think tanks working to contribute to various cybersecurity initiatives. We are eager to support and encourage such initiatives.
What other factors could significantly affect the fourth industrial revolution in the years to come, and how should organizations prepare for these future trends?
Once again, the COVID-19 pandemic showed us just how quickly today’s global economy can shift. The technologies that underpin the fourth industrial revolution must ultimately be built with resilience in mind. That means being able to scale when needed to solve business questions and human challenges, whether it is delivering healthcare solutions, remote education, or emergency connectivity to a world in need.
In addition to the idea of resilience, there’s a pressing need to ensure that we increase access to technology. Technology is too important to be left in the hands of technologists alone; end-users must be empowered to access and consume these solutions to ensure digital transformation benefits all.
During the pandemic, for example, parents and teachers have had to turn into unwitting experts on remote education to ensure that children can continue their education. Remote workers have had to navigate unfamiliar teleconference apps. As an ICT industry, we must help ensure that the public is digitally empowered to use the platforms available to them today. Simplifying the user experience with real people in mind, and availing easily accessible training modules, are excellent places to start.
In building more sustainable ICT ecosystems in the region, what lessons have you taken away from 2021 already, and how has that influenced the company's future outlook?
It’s a good question. It really comes back to our vision and mission. We want to bring digital to every person, home, and organization for a fully connected, intelligent world. Based on this, we have developed our sustainability strategy, incorporating it into the company's overall development roadmap.
In particular, we are focusing on four priorities for sustainability: Digital inclusion, security and trustworthiness, environmental protection, and healthy and harmonious ecosystems. Nearly all of these contribute to the UN SDGs.
There is a lot to unpack in each of these four areas. So for now, allow me to examine environmental protection in specific, as this is certainly an important consideration for all our partners in the Middle East.
Following a study released by Analysys Mason and commissioned by Huawei, we lay in stark terms the environmental challenge facing the world, and envision a technology-led pursuit of a more sustainable future. It notes that technologies like 5G are being rolled out at a time when energy efficiency is sometimes a matter of life or death, but that technology can play a significant role in helping every industry to hit sustainability goals by enabling them to transform their processes and behavior. While the rising use of technology has brought numerous new experiences to every aspect of business and personal life, these benefits must be delivered without any more detrimental impact on the environment.
I think the telecoms industry has taken a leading role in addressing its own energy efficiency. The cellular industry was the world's first, in 2016, to commit to achieving the UN Sustainable Development Goals (SDGs), setting an industry goal of net-zero emissions by 2050. Operators' energy efficiency is now one of the primary considerations when planning and optimizing new mobile networks. Many techniques – from innovative power for base stations to AI-enabled preventive maintenance – can be applied.
Whether in the area of environmental protection or another sustainability field, we are ready and willing to work with partners across the entire value chain to make the future a more prosperous one for all.