China’s Huawei entering into the cloud computing market

The Huawei Technologies Co Ltd which is a Chinese telecoms equipment and smartphone maker declared that as a global provider of public cloud services it is ready to compete with Inc. and Alibaba Group Holding Ltd.

Huawei is planning to expand in cloud computing with a dedicated division that will recruit 2,000 more people this year. They had the slowest growth in the previous five years and they aim to exceed this growth recession by strengthening public cloud offering. They also plan to have software-based revenue as the in smartphone sales seems to decrease. Huawei expects its cloud computing revenue to reach 10 billion yuan by 2020.

The public cloud services market is estimated to reach $383 billion by 2020 from $247 billion in this year. Public cloud services involve shared data infrastructure, rather than dedicated infrastructure built for single customers.

The competition is very high in the cloud computing market in the world, especially in growing economic giant China. Huawei sees Alibaba Cloud as its biggest rival in China. But there are some other strong rivals in this market such as Dalian Wanda Group Co Ltd in partnership with International Business Machines Corp.

Huawei is planning to use the advantage of global network of telecoms clients in the cloud computing market.

Tencent Holdings Ltd made a cloud computing contract with a bid of just 0.01 yuan in the beginning of 2017. Rivals complained of unfair competition, local media reported, but Tencent stated that the case was a one-off.

Chinese government is also trying to control the cloud computing market because of the fact that they forecast the domestic cloud computing industry to grow to 430 billion yuan ($62.32 billion) by 2019, from 150 billion yuan in 2015. The Ministry of Industrial and Information Technology in China published a Cloud Computing Development Three-Year Action Plan this week.


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