December 5, 2020

The Future of Cloud in a COVID-19 Era

Three Years of Astonishing Cloud Growth

Almost exactly three years ago in June 2017, Huawei launched its public cloud business, Huawei Cloud, in China. At the time, China’s public cloud market had just exceeded US$1 billion in the 1H 2017.

The top vendors in the space were:

Source: China Internet Watch / Public Cloud Market Share in H1 2017 (IaaS)

Three years later, and Canalys has just released its latest figures for the China public cloud market, as of June 2020:

Several things are noteworthy from a
comparison between 2017 and 2020:

  • Over 3 years, China’s public cloud infrastructure market has grown about 800%, from $1B over 6 months in H1 2017 to US$3.9 billion over 3 months in Q1 2020.
  • China’s public cloud market is coalescing around its larger technology leaders, BAT and Huawei.
  • During these 3 years, Huawei Cloud grew and gained share the fastest, going from non-existent to now the #2 public cloud in China.

On this 3-year anniversary of Huawei Cloud, I’d like to take the opportunity to reflect on a few key trends in cloud computing: the effects of COVID-19 on cloud, the evolution of global cloud industries, and the importance of being open.

COVID-19 and the Acceleration of Digital Trends

COVID-19 has been a terrible blight upon
the world, inflicting both human suffering and economic hardship. As people
have been staying at home and moving interactions online, the use of digital
services and connections has spiked dramatically.

From events to meetings to media to
shopping, everything that can be online is moving online. Of course, in China,
many of these activities had already moved online and onto smartphones years
ago—and at much higher adoption rates than in other countries. Ubiquitous
app-based food delivery, restaurants with QR-code-based menus, cashless
spending, and many other digital services are so normal here, they are the rule
rather than the exception.

Even with all these digital services, though, China’s total spending on public cloud infrastructure is still relatively small both for its economy size and also when compared with other markets. So, it is remarkable that even in China, COVID-19 has brought such a dramatic increase in spending on cloud computing services.

As evidenced by a 67% increase in Q1 cloud spending against a massive global slowdown, COVID-19 has demonstrated to Chinese companies that in times of abrupt need, only cloud can truly deliver the necessary scale, agility, and depth of services required. Thus, even after this COVID-19 crisis has passed, the acceleration towards cloud in China will continue.

The Evolution of Global Cloud Industries

As China and the world accelerate their
adoption of cloud, what will this look like? Different regions will evolve
differently, but they will share many similar characteristics. For example,
consider both China and Europe.

China and New Infrastructure

To help address the economic fallout from COVID-19, the Chinese government recently announced to accelerate a multi-trillion yuan investment plan towards New Infrastructure, the goal of which is to provide ubiquitous and high quality connectivity and computing. Target technologies and industries for New Infrastructure spending include cloud, AI, 5G, blockchain, and industrial internet.

So, not only did COVID-19 bring a spike in
cloud consumption in China while everyone stayed home, it is also leading to a
massive new investment across the country in digital technologies. This in turn
will only further accelerate the adoption of cloud services in China.

Europe and Digital Sovereignty

Like China, the European Commission has recently introduced a massive €750 billion stimulus plan to deal with the COVID-19 fallout, Next Generation EU. And, like with China’s New Infrastructure, Europe’s Next Generation EU calls for spending heavily on projects towards strengthening for the digital age:

  • Investing in more and better connectivity, especially in the rapid deployment of 5G networks.
  • A stronger industrial and technological presence in strategic sectors, including artificial intelligence, cybersecurity, supercomputing and cloud.
  • Building a real data economy as a motor for innovation and job creation.
  • Increased cyber resilience.

In addition, though, as Europe invests in
these technologies, it is also doing so with an eye towards digital
sovereignty. And so, also this past month, GAIA-X,
a project to build a federated digital infrastructure for Europe, officially
announced their new European foundation:

With GAIA-X, representatives from politics, business and science from France and Germany, together with other European partners, create a proposal for the next generation of a data infrastructure for Europe: a secure, federated system that meets the highest standards of digital sovereignty while promoting innovation. This project is the cradle of an open, transparent digital ecosystem, where data and services can be made available, collated and shared in an environment of trust.

Data Infrastructure EU, GAIA-X

According to a recent Gartner study, the adoption rate of public cloud for many European countries is similar to that of China and also lags many other markets:

With projects like Next Generation EU and GAIA-X, however, European adoption of cloud and digital technologies should rapidly accelerate over the next few years. And just as in China and around the world, we look forward to sharing our experience and expertise and to working together openly and securely to build out this next generation of digital services.

The Importance of Being Open

How was Huawei Cloud able to grow so
quickly over such a short time? One of the things that distinguishes Huawei is
that we believe in the power of open innovation.

This is how we view our Huawei Cloud business:

Open Hardware

First, Huawei believes that as we move
towards next generation cloud services, AI, energy efficiency, edge computing,
and many additional factors are going to drive cloud towards heterogeneous
architectures. To support that, Huawei offers a variety of advanced chipsets
optimized for different types of use cases, including x86 CPU, Arm CPU, GPU, NPU
etc.

Unlike other cloud providers, though, we
share our hardware and chipsets openly with other vendors to implement their
own systems and clouds. We do not restrict them only to Huawei Cloud.

Open Source Software

Huawei Cloud is built on open source
software. From OpenStack at the IaaS layer to Kubernetes and other CNCF
projects at the container and PaaS layer to projects like our own open source AI
framework MindSpore
for innovative services, Huawei Cloud is arguably the most open cloud in the
industry.

Open, Collaborative Innovation

Huawei is not just consuming open source
software, though. Indeed, we are a top-level member and top contributor across
all the major open source foundations and projects, including Linux Foundation,
CNCF, OpenStack Foundation, Apache Foundation, and Eclipse Foundation. It is by
deeply participating in the open source ecosystem that we are able to bring
such fast innovation to market and grow at such a high rate.

It’s not just in open source communities that
we collaborate with others. This is why we have such a big partner focus at
Huawei Cloud and look to enable them to be successful as well. When they do
well, our customers do well, and we all do well together.

To Shared Recovery and Triumph

I hope that during this period of deep
trouble, a spirit of open, collaborative innovation can help us all work together
for our shared recovery. Cloud computing works because it shares resources
across many different users. Huawei Cloud has succeeded because we share in the
open development and benefits of cloud.

Europe, China, and the world will all have different paths forward out of our current situation. But, may the next three years and beyond bring for everyone a hopeful and triumphant future.


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