Building digital bridges
Alaa Elshimy discusses Huawei’s ongoing success story, the lastest from the company’s enterprise business, and plans for 2017
Despite a three-year decline in IT spending, as reported by market intelligence firm Gartner, as well as numerous businesses experiencing a slump in performance over 2016, Chinese multinational firm Huawei has manged to come out ahead in the global market. While its annual report for 2016 won’t be available until the start of the second quarter of 2017, the networking and telecommunications equipment company has already reported 40% growth in the first half of last year.
Furthermore, building off a successful 2015 year that saw company revenues reaching $61b, Huawei expects that 2016 will bring over $80b in revenues.
Discussing the ongoing success story, Alaa Elshimy, managing director of Huawei’s Enterprise Business Group in the Middle East region, highlights the strategy that continues to drive the company towards prosperity.
“We are continuing with our strategy and we are strengthening our portfolio. Our strategy is built upon the three main components of ICT, which helps Huawei to be a big differentiator. You have the devices, pipe, and the cloud,” explains Elshimy.
“Today, the reality is when you are talking about smart cities, IoT, and being able to get your services at any time, you definitely need to have these three building blocks within your strategy.”
Rather than offering each component separately, whether it’s the pipe, which refers to the connectivity, or the cloud that encompasses both storage and the analytical part, Huawei’s focus has been largely on devising comprehensive business-driven solutions.
It is perhaps this approach that has helped the company prosper where others have remained static over the last year. According to the managing director, customers have become more selective with their investments, holding specific goals for projects and expected returns.
These include ensuring that real business value is gained, improvements to the bottom line is achieved, as well as an overall reduction in costs.
“We provide solutions in different verticals, be it banking, defence, oil & gas, hospitality and smart cities. These are the kind of solutions we provide to our customer to make a business difference to them, versus just providing one component of the infrastructure,” asserts Elshimy.
Another critical part of Huawei’s success story lies with the company’s commitment towards research and development. An area to which it has invested considerable resources, Huawei reportedly dedicated $9.3b towards R&D in 2015.
Additionally, the company submitted roughly 3,800 files for patenting, the managing director stating the most by any company across any industry in that year. Of those patents submitted, 2,300 were approved for Huawei.
Outside of product development, the company is also devising new ways to approach its go-to market for the enterprise segment. One of three segments that Huawei is involved in, the other two being mid-market and low-end, for the enterprise segment, the company is looking to develop the capabilities of its channel.
“We are helping our channel partners to transform, to develop from being box movers into solution-driven sales business, or business-oriented, business-results driven solutions, rather than just providing components of infrastructure. This is our key strategy for the enterprise next year,” comments Elshimy.
Pushing forward with the current strategy that propelled them to success over 2016, Huawei is now pushing to expand its presence across the various verticals it is presently active within. In particular, the company aims to expand its footprint within the region’s education and healthcare markets.
Identifying these two verticals as the top spending areas for governments across the GCC, the managing director adds that Huawei, to date, maintains strong portfolios in these segments, holding a number of global references. In terms of ICT market trends in 2017, Huawei, like many other IT enterprises in the segment, will be looking to move forward from virtualisation, and instead capitalise on cloud and the Internet-of-Things (IoT). Smart cities and the relevant safety issues will dominate how the market continues to evolve.
“Roughly five or six years back, we were talking about virtualisation and it was only 10 - 15% of the market. We said in a few years, it would be 75% of the market, which is the case today. Virtualisation has reached a very good maturity level,” explains Elshimy.
“After virtualisation, we will see more focus on the cloud, big data, analytics, mobility and security. These are the key areas that the entire industry has been talking about for the last two years. Maturity level is not there yet.”
Commenting on the obstacles, he adds: “The challenge will be on the continuous development and the transformation of the ICT industry, which is moving very fast. It’s about people being able to cope with that. To go with the speed and to understand these dynamics, while leveraging these technology developments.”