During a keynote address at Huawei Connect in Shanghai earlier this year, Gao Tongqing, vice president of China Telecom, spoke about the important role cloud computing was playing in his company's transformation.
Before I came onto the stage, I was thinking about my experience yesterday. On my way here, I ran into many of my old friends, from around China and from other countries. They are all here in Shanghai to attend Huawei Connect. I suddenly thought of a word that we often use in Chinese: yunji, a gathering of clouds. It means a group of brilliant, talented people coming together. Today, that word is more relevant than ever. We are all here, together, because of the cloud.
This is an age of cloud. Over the past decade, cloud computing has developed rapidly all over the world, including in China. Many of the speakers today have talked about cloud computing and its prospects. What role should carriers play? How can we succeed in this age of cloud?
Internet+, and especially cloud computing and big data, have brought vitality to the real economy, and to deep convergence and innovation. We have all experienced this vitality. For carriers, do we choose to embrace and seize opportunities, or stick with our traditional approach? Do we choose to innovate proactively and create new demand, or rest on our past success? This age presents us with both challenges and opportunities.
We ask ourselves these questions, but the market is pressing these questions on carriers as well. If we can seize these opportunities, then we will have that new vitality. Technological advances are also bringing us opportunities. In the past, we often talked about how to meet user needs. Today, with new technologies and new services, we can create new demand. So in this sense leadership is also vital for us. But the key is whether or not we can seize the opportunities we find.
These opportunities will be all about intelligence, which grows out of cloud computing and big data. We believe that intelligence is going to redefine the future. In terms of data, intelligence represents a new kind of connectivity based on cloud computing. Add in big data, and you have the basic architecture of intelligence. It will change the way we connect and interact with each other, forming human-like intelligence. This is an opportunity for both carriers and users in terms of services and experience.
Now I would like to tell you what we hope to do and what we are doing to adapt to this great age. While embracing change, carriers are also making changes themselves. There are three major trends. First is building more intelligent networks. Second is collaborating with more industry partners. Third, our business models continue to evolve. Our goal is to provide comprehensive, cost-effective and intelligent information services, offering access anytime, automatic responsiveness and an true-to-life experience.
China Telecom’s Transformation 3.0 Plan
At GSMA's MWC Shanghai this June, Yang Jie, the chairman of China Telecom, launched our Transformation 3.0 plan. It generated lots of discussion. As one of China's biggest telecom carriers, what is the essence of China Telecom's Transformation 3.0? The key is becoming a leading provider of comprehensive intelligent information services. Intelligence will be the linking factor that runs through this whole process. We will build intelligent networks, create a sound business ecosystem and achieve intelligent operations. These three areas will drive the re-architecting of our networks, services, operations and management.
Cloud computing is the most important enabler of the Transformation 3.0 plan. It will be the key to intelligent networks, business ecosystem and intelligent operations. It will also enable carriers to deliver those comprehensive, intelligent information services for customers. This is our Transformation 3.0 strategy and cloud is a key enabler.
With regard to intelligent networks, China Telecom released its CT NET2025 plan this year. Driven by the demand for smart services, we will transform our network architecture and restructure every network around cloud data centers over the next ten years.
Technologically, we are applying SDN, NFV and cloud computing to build more simple, integrated, agile, open systems to manage our next-gen networks. Our CT NET2025 architecture will be software-defined, integrated, cloud-based and open. This is our interpretation of the technology required for intelligent networks.
What's our goal in building intelligent networks? We want to be the carrier of the future. China Telecom Corp. Ltd. (NYSE: CHA) will adapt proactively, rapidly and flexibly to various Internet applications, integrate our networks and IT, and enable faster service deployment, stronger security and service innovation. We also aim to provide flexible access for customers. Services will be delivered as-needed, with cloud and network totally integrated, so that customers receive a single cloud-network service. This will help other industries to cloudify.
In terms of ecosystem, China Telecom will proactively respond to the changes in the market and the competitive landscape. This means that we will accelerate the development of two basic services -- fiber and mobile -- and create synergies in five emerging markets. As you can see in the ecosystem tree on this slide, we are aiming to build five ecosystems that cover intelligent connections, Internet financial services, smart home, IoT and new ICT services growing out of cloud and big data. We believe that cloud and big data will be a hundred billion-dollar business for us in the near future.
The current business model is Internet+ industry-specific applications. We believe that this means a shift from a straight value chain to an ecosystem model. Collaboration will become critical.
On one side, carriers will need to collaborate with all other ICT industry players: infrastructure providers, systems integrators, enterprise solutions providers… We will have to work together to meet customer demand for end-to-end cloud services. Rather than just delivering basic functions, we will provide comprehensive solutions and intelligent applications. Rather than just delivering a one-time product, we will provide ongoing services. Driven by these changes in our ecosystem, we have launched an e-Cloud certified partner plan to openly collaborate with our partners and jointly provide services to customers.
On the other side, we will proactively engage with other industries and support the development of industry-specific ecosystems. This way, we will expand our market, and offer better services to end users.
To achieve intelligent operations, we will use cloud computing to boost efficiency and help the entire ICT industry transform. We will focus on six key areas: network infrastructure, network management, data operations, channel sales, customer services and workforce skills. These will enable us to build integrated, intelligent systems that translate our resources and expertise into real market advantages.
Along the way, we will make full use of cloud computing and big data. For example, to enable predictive maintenance and dynamic resource scheduling, network management should be automated. Channel sales will shift from one-way to interactive. We will use big data analytics to analyze user needs and provide tailored products for them.
Another key topic is internal change. Change and innovation are internal motivators, and we should fully unleash their potential. As the workforce is a priority for us, we are building a comprehensive incentives system with market elements to mold a high-skilled, highly motivated workforce.
We believe that in this age of cloud, if carriers don't change themselves, it will be difficult for us to meet new market demand and make full use of our strengths in the face of competition.
So that is our strategy. Now let's look at cloud. Cloud is a key enabler for China Telecom's Transformation 3.0. I would like to talk about our practices and some considerations in this area based on our innovation in e-Cloud.
In cloud computing, our goal is to make our natural advantages as a carrier tell. Then what are our advantages? One is long experience delivering services to businesses and government agencies. Another one is network. Given these strengths, we have chosen to forge a strategic partnership with Huawei Technologies Co. Ltd.
. Our resources and operational strengths, combined with Huawei's strength in R&D, software and hardware, make this a powerful match up. It is raising the level of e-Cloud services to what we call e-Cloud 3.0. We launched this service this June, offering our customers high quality services they can depend on.
I just mentioned that carriers' networks are an extremely important resource. The convergence of network and cloud gives us a unique advantage in cloud services. By integrating network and cloud, our network has linked all of our data centers, so we are able to deliver ultra-high speed intercloud services and service a range of different needs. We have some success stories in this area, for example, in clouds for healthcare imaging.
SMEs and micro enterprises have different needs for public clouds from government agencies and large enterprises. Specifically, they need exclusive access to resources, and they need them local. That is why we are also deploying our resources locally. China Telecom is making full use of our large data centers for massive storage and analysis, but we are also distributing resources where our customers need them. We offer both the highly concentrated and the distributed resources: Concentrated on the logical plane, but the physical infrastructure is widely distributed.
Last, let's talk about security. Cloud security is a major concern in cloud deployment. To address this concern, we have built end-to-end protection across the cloud, pipe and devices. And we are collaborating with Huawei to build control into every phase of services and operations. With e-Cloud 3.0, in association with Huawei, we have created a benchmark cloud service for China that will take cloud to the next level.
This is a great age of cloud. It presents both challenges and opportunities. Everyone must play their own role, and all of us need to think about how to seize these great opportunities, develop new competitive advantages, and jointly create a better future.
Huawei Connect is a great space for all of us to exchange ideas and inspire new thinking. I hope that all of us, no matter which industry we are in, or what niche we occupy in the value chain or ecosystem, can work together to fling open the doors of cloud computing and enjoy the beautiful new vistas that it will present to us.