How Huawei’s digital transformation support resulted in growth

How Huawei’s digital transformation support resulted in growth

Company releases its 2016 financial results, with US$75.1B in revenue


Digital transformation is reshaping industry ecosystems, according to Huawei and, in line with that strategy, the company is “seizing this opportunity” and working with partners and customers to build Business-Driven ICT Infrastructure (BDII).

With digital transformation at the forefront of Huawei’s go-to-market strategy, this focus has proven to be effective for the vendor, as indicated in its 2016 annual report. The release reported that its carrier, enterprise, and consumer business groups each achieved year-on-year growth.

Its annual revenue was US$75.1 billion, an increase of 32 per cent over 2015. Net profits were US$5.3 billion, an increase of 0.4 per cent. In 2016, Huawei’s annual spending on research and development reached US$11 billion.

Breaking down the financials for its individual business groups, its carrier division generated US$41.8 billion in revenue, an increase of 24 per cent year-on-year in 2016. According to Huawei, this was achieved by focusing on digital transformation and “leveraging major opportunities” in cloud, video, IoT, and operations transformation for carrier customers.

Huawei’s enterprise business division generated US$5.9 billion in annual revenue, an increase of 47 per cent from the same time last year, with the company attributing the growth to close collaboration with its partners, and supporting the digital transformation of key vertical industries, including finance, energy, government bodies, and public safety.

As for its consumer division, it shipped 139 million smartphones during 2016, and reported US$25.9 billion in annual revenue, up 44 per cent from 2015. Huawei said its “innovative products” and growing global recognition were factors behind this.

Huawei board chairwoman, Sun Yafang, said the results show that digital technology can drive the upgrade and transformation of industry, and can help create a better economy.

“Over the next several decades, we will see a migration from the physical world to the digital. In this world, we will see more collaboration between industries and closer integration of technology and business.

“A better connected, intelligent world is on the horizon. As our world evolves in this direction, key ICT technologies like IoT, AI, and cloud computing have become the very cornerstone of society,” she said.

Locally, in 2016, Huawei increased its focus on the Australian channel with the appointment of two new distributors – Madison Technologies and CertaOne.

It also brought out new programs and promotions to incentivise the partner community.

On 24 March 2016, Vodafone signed a global framework agreement with Huawei to extend the over 10 year relationship between the two companies in a move targeted at gaining market share in the enterprise.

Huawei also took a step forward in its 5G partnership with Optus in November last year, conducting a local Australian trial that clocked up single user transmission speeds of 35 Gbps.

Huawei rotating and acting CEO, Xu Zhijun, said going forward, Huawei will employ an “all cloud” strategy.

“We will cloudify all of our products and solutions to enable the full digital transformation of telecom carriers and verticals, just as we did with our All IP initiative in the past. We are committed to open cloud architecture, providing a combination of cloud products, solutions, and services.

“This will enable carriers to fully embrace the cloud, help major industries move to the cloud faster, and deliver an optimal consumer experience through device-cloud synergy,” he said.

According to Zhijun, customers are expecting Huawei to evolve from a network equipment provider to a business solutions provider. To meet these expectations means that in 2017, it needs to rethink its positioning and the value it creates throughout the customer transformation process.

“We will press ahead with business transformation and organisational restructuring to better position ourselves as a business solutions provider for our carrier customers. This includes optimising our ability to deliver business consulting and integration services, and strengthening our ability to maintain and operate increasingly complicated networks.

“We will rapidly optimise the structure of our workforce to support IT transformation, and deploy our capabilities around the world. Our centers of expertise for research, innovation, precision manufacturing, and risk control will be built in places where strategic resources abound,” he added.

Zhijun also identified that in the carrier market, it aims to grow and advance the telecom industry, with video, cloud, digitisation, and operations transformation as its strategic priorities.

“We will also help customers enhance agility by moving their networks and operational systems to the cloud.”

In the enterprise market, it aims to make full use of cloud computing, SDN, and big data to enable digitisation to promote business agility and intelligence. In its consumer business, Zhijun said it will remain committed to building a mid-range and high-end brand, and creating an ecosystem around user experience.

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Tags CloudVodafoneTelecommunicationsoptusHuawei

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