Huawei Cloud Breaks 1 Million Users Two Years After Release
COVID-19 and China
Mr. Zheng Yelai, HUAWEI Cloud BU’s President. PHOTO: Credit to Huawei Cloud

Huawei disclosed that more than one million enterprise users and developers have chosen Huawei Cloud, according to Quantum. This official announcement follows two years after the Chinese telecommunications giant first established its Cloud BU in 2017.

It’s the first time the Huawei voluntary revealed its cloud business performance. While the reasons behind the rapid growth were not stated, the company hinted that the progress of AI developers contributed to its success.

At the end of 2018, Huawei held an annual summit and released official statements regarding the progress of its cloud software. The company launched more than 160 cloud services and had one or two weekly updates. Huawei Cloud EI also entered eight industries (manufacturing, campus, logistics, city, Internet, vehicle, healthcare, and home) and participated in more than 200 projects.

In 2018, there was also news that Huawei Cloud had approximately 6,000 partners, including governments, central enterprises, and small to medium-sized Internet companies.

At Huawei’s 2018 Connected Conference, the company released its rising AI chip and the software that developed AI platform, ModelArts. Since then, the platform won the world championship in facial recognition on Stanford’s DAWNBench list. Therefore, Huawei Cloud’s performance has officially begun the battle for AI developers.

Huawei Cloud may be a tactic to lock in existing users and attract prospective customers, a strategy similar to Apple’s iCloud. iCloud was established in 2011. As of Feb 2016, the service exceeded 782 million users. 

iCloud has become one of Apple’s most important services and “helps to increase switching costs for Apple’s products,” according to Forbes. Barclay analysts also suggested Apple could “decrease its dependence on hardware” by offering iCloud for enterprises. Personal iCloud and professional iCloud can also work separately and allow users to “switch between the two environments freely and potentially experience lower latency.”

The American business magazine estimate that approximately “15% of Apple’s iPhone installed used [the Cloud service] in 2018 with an average monthly ARPU estimated at USD 2 per month.” In FY’18, this resulted in USD 3.6 billion in revenue. If 20% of its user base adopts iCloud by 2022 with its ARPU rising to USD 3 per month, revenue could increase to USD 9 billion per year.

According to Rakuten Intelligence, iCloud is driving Apple’s non-hardware growth. iCloud revenue grew 63.7% YOY while iTunes saw a 26.7% YOY revenue growth. iTunes purchases using iCloud also grew 3% from mid-2016 to June 2018.

As Huawei technology snatches more market share in Europe, Asia, Latin America, Middle East, and Africa, Apple could acquire other cloud computing service companies to maintain a competitive advantage. Worldwide public cloud services revenue is expected to grow 17.3% which reflects growing market demand and competition.

At the Mobile World Congress in Barcelona, Spain, Huawei chairman, GUO Ping, gave his two cents on the US Cloud Act which he bluntly stated that for the "best technology and greater security, choose Huawei.”

In addition to Huawei Cloud surpassing one million users, the Chinese telecommunications company also announced its CNY 177.9 billion sales revenue for Q1 2019, a YOY increase of 39% and a net profit margin of 8%.

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