Huawei must scale back enterprise businesses, focus on strategic areas: founder
Published: Jan 03, 2021 12:03 PM

Huawei CEO Ren Zhengfei File Photo:IC

Huawei's enterprise businesses need to continue to scale back and concentrate on areas of strategic focus rather than trying to "do everything," Huawei's founder and CEO Ren Zhengfei told company staff in a recent internal email, signaling that the telecom giant might further adjust its strategies in face of challenges and competition. 

"Because we are a company with limited power, we must do well and fine-tune the projects we are going to do. We must seize opportunities in the areas where we can, focus our energies and do a good job in a down-to-earth manner. Only then can we truly find a better solution than others," Ren explained.

When discussing Huawei's cloud businesses, Ren stressed that while learning from Amazon and Microsoft, Huawei has to make its 30 years of network experience a unique advantage in the cloud service market and build differentiated features. 

"But Huawei can't take the same path as Alibaba and Amazon, since we don't have 'endless money' from the US stock market like them," said the CEO.

Analysts said the remarks from Ren come as the firm's cloud businesses are encountering intensified competition in the domestic market, and the strategic talk from Ren is more of a solution in response to the difficulties the firm is now experiencing.

"Huawei's enterprise is still limited in size and faces barriers to develop on a bigger scale, the points Ren mentioned are also some attempts the firm is going to make to try to break through the bottleneck," Jiang Junmu, chief writer at Chinese telecom industry news website, told the Global Times on Sunday.

Huawei Cloud has launched more than 200 services, is used by more than 1.5 million developers and has attracted nearly 20,000 partners so far.

"What we are discussing now is how to seize the opportunity of digitalization of government and enterprises, how to achieve better development in both, and how to achieve the world's leading position," Ren said.

Ren also stressed that the firm should "go all out" to build a big application ecosystem like Amazon, since without applications, Huawei Cloud may die.

"Alibaba Cloud, Tencent Cloud, and Amazon's AWS have introduced more and more hardware-software fusion devices. Huawei's advantage lies in hardware. We must strengthen the software and application ecosystem and should not give up the advantages that hardware brings to Huawei Cloud," Ren said.

"Huawei has been good at scaling back prior to this. Ren's consistent idea is not to invest energy and resources in non-strategic areas," Ma Jihua, a veteran industry analyst and a close follower of Huawei, told the Global Times.

In terms of cloud computing, Huawei has its own advantages, but its development is relatively late, and the underlying self-developed technology also has its shortcomings. Rather than competition with Alibaba and Amazon in the same arena, it would be better to embark on another path where it can play to its advantages.

Global Times