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Zou Zhilei, president of Huawei Carrier Business Group, spoke about how his company was working with its carrier customers to reshape their networks with cloud services during this Huawei Connect address in Shanghai in late summer.
Distinguished guests, dear friends, good morning. I'd like to extend my warmest welcome to our friends and carriers from all around the world. It's wonderful to see everyone gathered together for this cloud transformation summit. Today, I'd like to talk about the cloud era and a new world of opportunities that it brings to carriers. Before we dive into this topic, let's take a look at some trends in the ICT industry. We believe that our industry is going through its third wave of development.
At the very beginning, the industry focused on the CT market, which marked the first wave of informatization. The second wave was the Internet wave, which started from 2000. During this phase, the industry realigned itself around horizontal solutions. This was the time of e-commerce and portals.
Now, we are in the midst of the third wave. The Internet is going vertical and gradually entering every aspect of our lives. This trend is becoming increasingly evident. While the Internet gradually introduces changes to our lives, it's also changing the way we produce -- our production processes. With the emergence of the Internet, especially the cloud, the whole ecosystem is changing almost without our realizing it.
When we say "production processes," they're not the same thing as horizontal solutions. These days, people tend to think that cloud is something that's simply embedded in every facet of our lives, like shopping through e-commerce platforms or watching movies. But in fact, cloud means more than that. I'd like to give you an example of what we mean when we talk about production processes.
Recently, representatives from a leading global securities company visited Huawei. Because of its high-frequency trading, with hundreds of transactions per second, we had assumed that a company of this caliber would have an advanced and sophisticated trading system. However, they ended up telling us that their trading system is actually quite conservative. In fact, a lot of their work is still manual. Many other industries, take subways and trains for example, can adopt advanced technology to help solve their problems. But they are still using traditional processes, traditional processes of production. They were basically operating on the basis of long-existing systems. Why was that?
It's because cloud systems and traditional production systems are totally different. If you buy a product from an e-commerce platform, the cost is relatively low, maybe a few dozen bucks -- at most a few hundred. It's affordable to most people. But production systems are completely different. Production systems touch upon extremely sensitive aspects of our lives, including our economic well-being and the security of our property. Therefore, we have to be extremely cautious and conservative. When working with these types of production systems, we need to get high touch with customers to find scenario-specific solutions. This takes time and patience. Production systems like this take tremendous capability both online and offline. In the global telecom industry, operators are old hands when it comes to all aspects of operation. All across the world, the industry has 5 million employees, 200,000 customer service centers and a huge number of account managers. They have what it takes to truly engage with customers and develop customized solutions for them.
At the moment, there are many hot topics in the industry, like Internet of Things, microservices, cloud computing, augmented reality (AR) and virtual reality (VR). These domains themselves don't present any real challenges. The real challenges lie in how we should restructure our businesses in the cloud era. Restructuring will happen on three levels: in our architecture, operations and networks.
What does the cloud era entail? Whether you like it or not, the cloud is changing everything. It is reshaping our networks, processes and even our competency models. What exactly is cloud? Video services are cloud; the Internet of Things is cloud. This morning when I was having breakfast with my colleagues, they told me that voice is also cloud. The cloud era is here, whether we like it or not. It's an unstoppable trend, and there's no escape.
As part of this trend, public clouds are also going vertical. This year we've been working with China Telecom Corp. Ltd. (NYSE: CHA) and Deutsche Telekom AG (NYSE: DT) on public cloud development. And throughout the process we've encountered many challenges. For example, how do we convince our customers to migrate their data to the cloud? This is a massive challenge. We established a dedicated team to overcome this challenge. If we don't sink our teeth into this issue now, how can we persuade other customers in traditional industries to move their data to the cloud? How can we talk them into changing their production processes and organizational structures? How can we make a case for refreshing their workforce models and structures, and the mindsets of their people in particular? These are real challenges.
I'd like to share an example from inside Huawei Technologies Co. Ltd. We were also concerned that we would be overwhelmed by the massive amount of information that's flying around here and there through different channels of communication. Just look at WeChat alone and the deluge of messages we get. We were at a loss as to how we should streamline and optimize the exchange of relevant information. A year ago, our Carrier BG launched the Three Cloud platform, which includes the Customer Solution Cloud, Knowledge Cloud, and Experience cloud. Beyond this, how could we move our Carrier BG's service capabilities to the cloud? We have to cloudify our organizations, processes, knowledge and our solutions. But how? As everyone knows, Huawei started out as a CT company. When people first enter the company, they already know that Huawei sells equipment, switches, base stations, routers. And we are strong in these areas. So how can we start changing the mindsets of tens of thousands of employees, and encourage them to embrace IT and even the cloud? This has been a real challenge for us.
Two years ago, we set a goal: We had to develop at least 3,000 internal IT experts. Though we encountered great difficulties throughout this process, we raised the bar for the second year -- we had to develop 10,000 IT experts. Now, our goal is to develop 30,000 skilled IT experts.
At the very beginning, Huawei focused on fixed networks and then moved to wireless networks. Back then, about 20,000 to 30,000 employees were working on wireless networks, and we've been constantly growing ever since. We think IT era and cloud era will be the same in this respect. How can we gradually move to the cloud? To be frank, nobody can say for certain what the process is. But we can try our best and, step by step, we will certainly find the right solution. It's no different from back in the day, when we started dealing with IT equipment, then IT architecture and IT processes. Now we're going from support systems to production systems, from the telecom industry to vertical industries.
This year, we've called out to all of our employees: In the cloud era, if you want to be a Huawei-er, you need to get used to living and working in the cloud. We expect our employees in field offices to spend more than 10,000 hours on the Three Cloud platform. Our aim is to help them adapt to cloud-based processes, and get accustomed to finding the knowledge they need and developing their skills on the cloud. Through this initiative, we hope that more and more of our employees can adapt to and embrace future challenges. So far, we have made greater progress than we ever expected.
Huawei Channel Launch
We are also launching a project that we're calling Huawei Channel. This is the first time I've talked about it in public. Why do call it Huawei Channel? In the past, when we present to our clients, we've always used PowerPoint. After launching our Three Cloud platform, and moving our solutions to the cloud, step by step, our video capabilities have also undergone massive improvements. Now, we can deliver all content in video form. Just like Phoenix TV, we can use different programs to demonstrate different concepts in the cloud era. In just two years time, we've gone from hesitance to great confidence in our capabilities.
We also have an Operation Web Services (OWS) system inside Huawei. There's some concern about whether or not some of our long-time employees can adapt to the cloud era. In the cloud era, everyone is a developer. When we're undergoing maintenance operations, we don't just sit there and stare signal lights -- we're looking at the operating status of various applications.
When we visited the OWS lab, we came across a young employee who was in a fairly entry-level position. After receiving a few hours of training, she was able to develop an app in about ten minutes. This is what the OWS system enables. Things that seemed impossible in the past are now becoming quite simple. We believe that everything is possible in the cloud era.
My biggest takeaway from our own experience is that in the cloud era, if we want to take on greater challenges, we must be bold in experimentation.
In the traditional CT industry, equipment and processes are standardized, which makes it easy for one team to complete all tasks. In the cloud era, we need to build PAAS (platform-as-a-service) and create an ecosystem. We need to work with partners to get more things done. At the moment, we're strangers to quite a few vertical industries. We are only familiar with them at a connection level or the architectural level. At the business level, at the moment we don't have a clear picture of algorithms needed for different business scenarios, which is why close collaboration is of the utmost importance. In the cloud era, we have to go out and experiment together with our partners. We can't figure everything out on our own. As we experiment with our partners, we also need to seek out those with shared goals, so that we can face future unknowns together. We believe that cloud will be a long new era. It will far outstrip our imaginations.
The cloud market will follow the same economic laws as all others. It's not possible for just one or two companies to tell the whole cloud story or control the whole industry. The cloud market will be divided into different segments. Every company, every carrier with ambition will find its own place and bring their own strengths to the table.
There's no need for anyone to worry about losing their competitive edge overnight. In the cloud era, we have to stay strong and confident. Just keep this in mind: For carriers, going vertical is totally different from shopping online. In the cloud era, as long as we are willing to work hard, step by step, everything will begin to fall into place -- success is certain. We must be patient. As we take a step forward together in the right direction, a bright future awaits us. We believe that the cloud era presents tremendous opportunities.
