More than Hardware & Networking
In the massive and confusing landscape of the digital transformation market, Huawei’s brand centers around hardware and telecommunications — essential, though unexciting, components.
Beyond the brand, Huawei has been delivering digital services and engaging with enterprises on their digital transformations in the company’s home market of China and globally, steadily building experience and use cases to support a substantial services practice. In a wide-ranging discussion with Hank Stokbroekx, Huawei’s VP for Enterprise Services, TBR learned the company has strategically partnered with vendors such as Accenture and EY on digital transformation engagements outside China while building its own reference use cases on the mainland.
Stokbroekx highlighted two for TBR that indicate where Huawei is headed. Shenzhen Bao’an International Airport. In Shenzhen, Huawei’s HQ, the company has been piloting various digital transformation projects within Shenzhen Bao’an International Airport, including passenger recognition, analytics, and IoT solutions. In Stokbroekx’s view, profitability is not the number one priority, as the heightened profile for Huawei being integral to the airport’s transformation provides brand and marketing value on its own.
During the Huawei 2021 Global Analyst Summit in April, Stokbroekx introduced analysts to Industry Operations Assistance. The solution, based on a platform and ecosystem piloted in China, enables intelligent operation command center monitoring inside a company. Intelligent Operation & Maintenance was used in the Shenzhen airport, which previously had a complex operational system with multiple requirements for operation and maintenance services.
As a result of the implementation, the airport experienced reduced time to locate a fault in its network from 1 day to 20 minutes and improved systems availability by 20%, leading to reduced flight delays.
The airport experienced reduced time to locate a fault in its network from 1 day to 20 minutes and improved systems availability by 20%.
The solution also enabled the airport to improve operation and maintenance efficiency by 30%. In TBR’s assessment, Shenzhen Bao’an International Airport offers Huawei two massive opportunities. First, every client from every different industry coming to Huawei’s headquarters will pass through the airport, providing the company a chance to demonstrate
its digital transformation capabilities in a direct and experiential way. Second, successfully deploying solutions at one airport provides reference use cases for embarking on other digital transformation pilot programs at other airports around the region.
For Stokbroekx’s second example, he described an unnamed mining company, based in China, at which Huawei deployed and demonstrated the benefits of 5G, edge computing and IoT solutions. Mining operations have been a go-to use case for many IT services vendors and digital transformation consultancies over the last few years, but this use case demonstrates Huawei’s ability to deliver results with emerging technologies and positions the vendor for growth in other industries, based on proven capabilities and expertise. In short, demonstrating experience with digital transformations may be the most useful selling point, especially for a vendor known for hardware and networking.
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Huawei is leveraging its digital transformation consulting services, which were launched in 2019 and is a fast-growing segment within the company. With over 500 completed projects, 200-plus digital transformation consultants and 3,000 digital transformation experts, the segment provides consulting strategy and processes tailored to each customer.
Demonstrating experience with digital transformations may be the most useful selling point, especially for a vendor known for hardware and networking.
Huawei strives to, “Talk business language of the customer and translate into strategy that fits environment and drives business outcomes,” according to Stokbroekx.
TBR believes the physicality of mining operations stands in sharp contrast to the usual buzzwords and hype around digital transformation, potentially associating Huawei with accomplishing something concrete, rather than simply talking about intelligent solutions or emerging technologies.
Think Global, Act Local
Stokbroekx noted China’s municipal governments and diverse banking sector provide growing opportunities for Huawei’s digital transformation services. Chinese citizens have been demanding better access to municipal data, creating the need for managed cloud services, data lakes and analytics, all services Huawei has been providing to cities (and enterprises) across the country.
In the banking sector, mobile payments have advanced rapidly, even as many traditional banks continue to run on older IT infrastructure, creating an opening for Huawei to provide digital transformation upgrades. Stokbroekx also noted the importance of training for Huawei, on two specific fronts. Like many global peers, Huawei has invested in
training its technology and services partners, as well as its customers, to ensure the company’s technology is architected, deployed and maintained properly. The company has provided equipment and curriculum guidance to close the talent gap (between the number of technical jobs and the number of tech-smart professionals).
Unlike peers, Huawei has also been offering business management training to Chinese businesspeople through universities across the country and its offices, using itself as a use case to show how a company operates successfully and continues to grow domestically and internationally.
But Act Like the Global Players Too
TBR believes proving success at home while partnering for success abroad makes strategic sense for Huawei in the near term. Within the next couple of years, TBR expects a more globally competitive Huawei to deliver digital transformation services, with and without partners, to clients outside China at a speed and scale that will force established vendors to pay attention, provided Huawei can replicate its success in China, in capturing new clients and delivering digital transformation services.
To accelerate that global growth, Huawei may need to learn from the market. Currently, Huawei has “30 or so proof of concept labs,” in Stokbroekx’s words, where the company does equipment testing, pre-installation verification, and automation and cloud migration research and development. Huawei also has a showcase center in Shenzhen for all its
capabilities and emerging technologies.
As partners such as Accenture and EY or peers such as SAP and Nokia — or a market research firm like TBR — could tell Huawei, innovation and transformation centers at which clients co-create to address business problems through technology-enabled solutions have been critical to building brands, talent and partner ecosystems around digital transformation and emerging technologies. A showcase center does not provide business development pull-through and does not attract the best talent.
A workshop does not conduct pre-installation verifications. For Huawei to expand its digital transformation services globally at an accelerated pace, the company will need to invest in innovation with clients and partners, at scale, and in a setting — perhaps co-located at the Shenzhen airport or the mining company — that attracts new business and new talent.
About the Author
Patrick Hefferman, Principal Analyst, TBRI
Patrick Heffernan is practice manager and principal analyst in TBR’s Professional Services Practice, where he directs the practice’s portfolio and manages projects on topics ranging from creating management consulting services to deciphering digital transformation for consultancies and IT services vendors to analyzing the business impact of emerging technologies. Patrick’s responsibilities tap his expertise in competitive intelligence, strategy, and global political-economic impacts on business cycles and consulting vendors.