Creating New Value with Synergy across 5 Tech Domains

ByGuo Ping

September 25, 2020

Guo Ping

Huawei Rotating Chairman Guo Ping addressing Huawei Connect 2020 on Day 1

This is the fifth year we’ve gathered in Shanghai for Huawei Connect. In 2016, we envisioned an intelligent world and called upon partners worldwide to build a rich and diverse ecosystem, one like Costa Rica’s. In 2017, we announced our goal of becoming one of the world’s five major cloud service providers. In 2018, we announced our AI strategy, and then in 2019 we revealed our computing strategy.

In 2020, we have completed large-scale 5G rollout worldwide.

This year, it’s all coming together. We see a massive convergence of opportunities across five tech domains. Today I would like to talk about creating new value with synergy across these five tech domains.

As more and more governments and enterprises go digital and embrace intelligence, the ICT sector will see incredible potential for growth. We look forward to opening this new chapter together with our partners.

As we have seen, the digital economy is playing a key role in economic growth.

A report from Oxford Economics shows that the digital economy is a significant engine for growth, and has been for quite some time. That growth isn’t limited to the digital economy itself, though. Digital transformation gives all industries access to incredible growth potential. Investing one dollar in digital technology leads to three dollars in digital transformation returns.

Take China for example. Last year, the digital economy accounted for around one-third of China’s total GDP and two-thirds of its total economic growth. New digital demand from governments and enterprises is constantly emerging.

Of course, connectivity and computing are the foundation of the digital economy. 5G and the Internet of Things (IoT) are at the heart of connectivity, whereas cloud and AI represent the future of computing.

We’re all familiar with Moore’s law. As time passes, computing power will continue to increase as the price decreases. Metcalfe’s law tells us that the value of a network is proportional to the square of the number of nodes in the network.

So the density of our connections multiplied by the sheer amount of computing power at our disposal will ultimately determine the strength of the digital economy.

The convergence of connectivity and computing will change all industries – whether it be transportation, finance, or energy – and create new value for society.

We have seen great changes in the role of connectivity across all sectors of society, including government and enterprise applications. The evolution from 1G up through 4G pretty much solved the challenge of connecting people. 5G, on the other hand, has ushered in an entirely new era, one where everything in the world is fully connected. At the same time, the computing industry has slowly gravitated towards AI, which is already creating immense value for governments and enterprises around the world.

Connectivity and computing must become further integrated with industries and focus on the pain points of real-world scenarios.

This focus, combined with unique industry know-how and the right ICT technology, can create practical value much more quickly. Over time, you can link these different scenarios together and gradually build up to your grand digital vision.

Examples of Value Creation

Coking: Let’s start with a case study from the coking industry. Coking is the process of turning coal into coke, a type of hot-burning fuel. During this process, the way you blend coal is extremely important because it determines the production costs, quality, and end price of the final product. For the most part, coal blending is typically a manual process, one that is highly reliant on senior experts in the field. It’s inefficient and difficult to optimize.

Coke is made from heating coking coals in a coke oven in a reducing atmosphere. As the temperature of the coal increases, it becomes plastic. It fuses together and re-solidifies into coke particles.

The Golden Stone Group wanted to change that, so they partnered with Huawei to come up with a solution. Together, we combined AI with the Golden Stone Group’s coking expertise to create an intelligent coal blending model. This model has significantly increased precision, efficiency, and reliability. This set of systems helps the Golden Stone Group save 15 yuan per ton of coal, for a total of 27 million yuan (US$3.975 million) per year.

Now expand that to the entire coking industry in China. If every coking plant saves 10 yuan per ton, the entire industry can save over 6 billion (US$833.44 million) a year. And this is just one small example in a relatively niche industry.

Logistics: The Shanghai Kangqiao Logistics Hub is a massive facility covering around 100,000 square meters.

In the past, their data collection and automation was practically nonexistent, and taking inventory was mostly a manual process. It took a month to complete. In addition, vehicle scheduling was unplanned, which frequently caused traffic jams and long delays. It was always one issue after another.

To address these challenges, Huawei and DHL implemented an intelligent upgrade for the logistics hub. Using Huawei’s intelligent campus platform, DHL integrated over 20 business systems, transforming dock, warehouse, and asset management into intelligent, interconnected processes.

This drastically decreased inventory times, and vastly increased the efficiency of inner-campus traffic and dock utilization. In total, they increased operating efficiency by 30%.

In recent years, city governments have been even more interested in intelligent solutions than businesses.

Take Shenzhen, for example. Over the past few years, both individuals and organizations have benefited a lot from Shenzhen’s smart city program, and overall satisfaction has increased greatly in many aspects of city life.

Building smart cities is huge and complex undertaking. Shenzhen is currently in the process of becoming a smart city. As part of these efforts, the Government Services Data Bureau of Shenzhen is working with Huawei and our partners to integrate the service systems of 42 different government agencies.

Aerial View of Shenzhen

They are leveraging our strengths in domains like 5G, cloud, and AI, to integrate over 100 types of data, creating an integrated “1 +10 + N” central management hub. In the near future, a growing number of governments and enterprises will start reaping the benefits of digital technology.

Over the past few years, Huawei has built up a solid portfolio of ICT products and solution. Moving forward, we will work more closely with our partners to apply these technologies to practical industry needs.

By providing targeted, scenario-based solutions, we want to help enterprises grow their businesses and help governments achieve their strategic goals of boosting domestic industry, benefiting their constituents, and improving overall governance.

5 Major Opportunities

Connectivity, computing, cloud, AI, and industry applications are the five major opportunities we see in the ICT sector. And by producing synergy across these five domains, we look forward to creating new value together with our partners.

Next I’d like to share some of the progress we’ve made in connectivity, computing, cloud, and AI, as well as our business strategies in these four domains. Then I will wrap up by sharing more information about how we’ve been supporting our partners in their efforts to develop industry applications, boost the supply chain, and grow their own industries.

Connectivity

First, connectivity. The foundation of digital transformation for both governments and enterprises.

All industries are beginning to incorporate digital transformation into their production systems, and demand for connectivity has changed dramatically. For example, coal mines, ports, and factories all need higher bandwidth. To achieve truly smart manufacturing, different industries also have varied requirements for latency and reliability. So we have to be able to provide a customizable network experience with SLA assurances.

To meet these needs, Huawei is working on something called intelligent connectivity. Basically, we want to deliver a hyper-automated network that provides ubiquitous gigabit access and a deterministic experience.

Computing

Different technologies like big data, AI, and HPC all have diverse computing needs, and monolithic computing architectures no longer have the chops to meet them. If we hope to meet growing demand for different types of computing power, we need to diversify.

And that’s exactly what Huawei is doing. We have decoupled software from hardware to adapt our compute to different processing needs, including x86 and Kunpeng.

Cloud

The cloud is the best platform for unleashing the full value of computing power. As such, it’s a cornerstone of the intelligent world.

Three years ago, also at Huawei Connect, I said that our goal was to become one of the world’s five major clouds, and that we were committed to long-term strategic investment in public clouds.

Over three years of effort, Huawei has established 23 regions worldwide, attracting over 1.5 million developers.

This doesn’t mean that our cloud team can relax. On the contrary, they’re under much greater pressure than ever before, because they’ve managed to raise the bar pretty high for themselves.

Moving forward, we will continue to advance our hybrid cloud solutions to meet the complex digital transformation needs of governments and enterprises around the world. We hope to become a preferred partner in their intelligent upgrade process.

AI

AI technology has developed rapidly over the past several years. In this time we’ve been exploring ways to better integrate AI into the management systems of governments and enterprises.

For example, in Shenzhen Airport, they’re using AI to manage airplane gate logistics. Last year, we leveraged facial recognition technology to increase the efficiency of airport security checks by 60%.

Throughout the pandemic, we’ve been using AI to analyze the CT scans of potential COVID patients, reducing the time it takes to get results from 12 minutes to mere seconds.

The banking industry is also using AI to fight fraud. We’ve made the impossible possible by using AI to produce accurate warnings in just minutes.

Industry Applications

Connectivity and computing are a lot like the early days of electricity. At first it was only used for lighting. Gradually, it expanded to power home appliances and industrial equipment, which brought tremendous change to all industries and officially ushered in the electric age.

During this process, the use of electricity in homes and industries created sectors that were dozens of or even a hundred times larger than the electric sector itself.

In 2016, we brought up the idea of building a diverse and thriving Costa Rica-like ecosystem, one where we empower partners to grow the market and reap the most benefits from the new value chain – just as electric-adjacent enterprises benefited the most from the age of electricity. Many of our partners will showcase their exemplary applications and solutions at this year’s exhibition. Make sure to check them out!

First, an example of growing the market through business innovation.

Tech Education used to be a traditional IT training facility. By working with the Huawei Cloud team, they now provide ICT solutions for the education industry. Huawei Cloud provides Tech Education with technical solutions and monetization support. In 2020, Tech Education’s transaction volume on the Yanxuan e-commerce platform has already exceeded 80 million yuan, a year-on-year increase of 800%.

This is just one example. To date, the Huawei Cloud has brought together over 13,000 consulting partners and over 5,000 technical partners. Huawei is committed to helping more companies like Tech Education drive business innovation and secure rapid growth. Their success is our success.

When it comes to boosting the supply chain, we’re big believers in growing together with our suppliers and sharing the wealth. Here I would like to share an example that involves a key component of 5G base stations.

Back in 2016, Huawei began working with Cooler Master, a traditional supplier of heat dissipation solutions. Back then we were working on a transformative set of 5G cooling systems, and they were very actively involved in the process. With Huawei’s help, they were able to make strategic breakthroughs in surface processing techniques.

In addition, working with Huawei enabled Cooler Master to optimize their processing procedures and logistics, which significantly improved their product quality, productivity, and supply capacity. They also managed to cut costs by 30%. Over the course of this three-year relationship, Cooler Master has increased its sales to Huawei by a factor of 20.

We will keep working with our partners to improve their capabilities, making sure that there’s plenty of benefits for them throughout the process, and that we can grow together.

We’re in it for the long run with our partners. We stand together through thick and thin. CS&S is an excellent example of this. We’ve been working together for more than ten years, starting back in 2009.In 2014, CS&S went global. Then in 2017, they became our first Huawei Cloud partner. They’ve really been with us through everything. In 2019, CS&S joined Huawei Cloud’s Kunpeng Partner Program. As you can see, CS&S has worked with Huawei in different capacities at different stages of our growth. We share value and stand together.

In return, CS&S gets top-notch technical support from Huawei, and together, we have expanded into new markets. CS&S’s partnership with Huawei Cloud is a great example. They grew their business by 900% in only four years.

Only deep roots make for green leaves. We will keep working hard to strengthen the foundations of collaboration with capable and willing partners. And we very much look forward to growing together with you. We will keep working hard to provide the best possible products and services in connectivity, computing, cloud, and AI.

Huawei will generate the power, and our partners can harness it. Together, we will succeed and create greater value for our customers. In addition, we will work with our global partners in broader domains like basic innovation, standards development, talent, and corporate social responsibility. Our ultimate goal is to provide our customers with top-quality products and services.

Walt Whitman said, “Keep your face always toward the sunshine and shadows will fall behind you.” 2020 has been a year of grave uncertainties for everyone. Let’s keep our faces toward the sunshine, and we’ll get through this together.


Disclaimer: Any views and/or opinions expressed in this post by individual authors or contributors are their personal views and/or opinions and do not necessarily reflect the views and/or opinions of Huawei Technologies.

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Guo Ping

Deputy Chairman, Rotating Chairman, Huawei

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