Thursday, September 15, 2016

Huawei Aims Sky High

Huawei Technologies Co. is one of the worlds “top three makers of telecom networking gear and smartphones”, and now it is entering into the data-storage market against competitors like Hewlett Packard Enterprise Co., Dell Inc. and Cisco Systems. A data center is a facility used to house computer and storage systems. The article, “ Huawei’s Cloud-Computing Plans Aim Sky High” states that essentially Huawei is building a cloud data center infrastructure for transporting operators into storage clouds.

Huawei believes that it will be a huge competitor in the cloud computing market as it plans to spend upwards of $1 billion budget for equipment and operating systems for data centers. However, I believe that there is a slim chance that Huawei will become a supplier for huge companies such as Amazon, Facebook, and Google, because “large corporations build their own data centers that offer cloud services and enable business and consumers to use these resources.”  Though cloud storage platforms are in high demand right now it will be fairly difficult for Huawei to enter the niche market. As a user of a cloud storage platform I would definitely prefer to use a service provided from providers like Amazon, rather than using a whole new service, that is solely used for cloud storage. Furthermore, most of the information stored in cloud storage is sensitive, personal information and users prefer to use their own systems for security purposes.

Additionally, it will be fairly difficult for Huawei, a Chinese company, to enter the American market, as the American government believes it poses security risks to the U.S. Though in the short term Huawei will be able to make a profit on their data storage platform in countries in Europe and Asia, I feel that eventually Huawei’s will only be successful and a huge competitor if they migrate into the American market. The main advantage that Huawei has is already a major supplier of data-center equipment in China, which other competitors can not and provides 60% of it services outside of China. As of right now America is a major tech hub, and for Huawei to be successful in the future they will have to be able to provide data storage for American companies as well.

On the other hand, the fact that employment and development in data centers has increased tremendously in the past four years, targeting data storage is definitely the best growth opportunity for Huawei. I believe that in the next few years it will be imperative that Huawei works on creating relationships and clientele with companies who already work with Western data storage suppliers.  In the long term however, Huawei should seek to break into the American markets as well, as data storage become more and more essential as technology develops.



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2 comments:

  1. I do agree with Prianka in her blog post about how this company, Huawei Technologies Co., will struggle to be successful in the United States market. Prianka made an excellent point saying that the big tech firms in the United States like Amazon, Facebook, and Google will most likely not use these data centers because they already have their own. These companies have been so successful so they won’t to risk something going wrong and trying out this company’s data centers.
    I also agree with the fact that consumers in the United States would not be inclined to trust this company with their data. As a cloud user myself I also prefer a service provided by that big name company that everyone can recognize like Amazon or Google. I would bet that most people in the United States have not heard of Huawei Technologies Co. which is the reason that most consumers would not be willing to trust this company with their sensitive information. Consumers in the United States have become so used to doing everything online, that reviews and brand recognition is monumental. This company does not have the brand recognition as the big firms like Amazon, Google, Apple etc. People don’t want to hand over their sensitive information to a company that they’ve never heard or can trust fully.
    I think Prianka’s last paragraph brought up some excellent points. First, the fact that she pointed out how data storage is the best growth opportunity for the company. I completely agree with that statement. We all know how demanding more data storage is becoming in today’s world. Everything, and everyone is going paperless and there is just so much data out there, which means the demand for more data storage is becoming more vital. It’s a tremendous place to target for a business strategy. Targeting this opportunity in the United States is also a great business decision. If this company is able to break into the data storage market in the United States, the business opportunities are endless. Americans love their wireless devices and all that comes with it. We love burning through data, and taking pictures and videos. But more often than not people will run out of space. Even American companies will pay top dollar for top of the line, secure data storage. My Operations Management teacher told us a story about how his company unplugged their data storage machines, and tried moving them to a different site. When they moved the machines to the new location, they never turned back on. They lost four clients because of this mishap. This was a couple years ago, and this led the company to go use a cloud service. He told us his company pays top dollar for cloud data storage.
    There is without a doubt the need for more data storage opportunities in the United States. It’s a great business plan. But will this company have the brand recognition to be successful?

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  2. In order for a business to continue to be successful, it most continually be growing. Since Huawei is already dominating a large percentage of data-center equipment in China, the question is now how will they continue to grow and which market they should enter next? I agree with Prianka’s opinion that Huawei will have a difficult time trying to enter the US market, especially considering that many of the major companies in the US are using their own, in-house cloud computing. From a perspective of a major US company such as Amazon or Google, it would make sense to continue to use in-house cloud computing services because they would have more control in terms of security. In terms of Amazon or Google providing cloud computing services to the average consumer, I think that Huawei would have an even harder time of selling themselves to direct consumers. With the sensitivity of personal data that is often stored in these data centers, everyday consumers would be less likely to trust a brand new company that has yet to build up any credibility in the US market, they would go with a company such as Amazon or Google because it has built itself up with a reputation as a credible brand.
    Instead of trying to enter the US market, I think that Huawei should really focus their efforts on entering the European markets. Currently, “the top four providers of cloud infrastructure in Western Europe are all US firms”. Huawei would have much more success at being a competitor against US firms in Western Europe than trying to compete against US firms in the US. However, Huawei would have to act relatively fast in this decision because many American firms such as Google are beginning to expand “its data centers in Belgium, Finland, and Ireland”.

    Source: http://www.wsj.com/articles/u-s-tech-firms-dominate-cloud-services-in-western-europe-1470303004#livefyre-comment

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