In today’s digitally intelligent world, the age of enterprises shoring up their singular competitive advantages is over. With industries converging and consumer requirements constantly evolving, today’s businesses need to be more open, flexible, and build on their “ecological advantages” as well.
This was the key message delivered by Huawei CEO Guo Ping during his keynote speech at Huawei Connect 2016.
“Today we are in the cloud era, and while we do not yet know what things will be like in the future, one thing is sure—every modern industry system will become interconnected and complicated,” Guo said.
“As data, IoT, mobility and cloud entities develop, businesses that are not even connected with one another will have more interactions. Hence, advantages will not only come from within the organization as has traditionally been the case, but also by the effective use of its external resources.”
Guo predicted that in the many complicated scenarios that industries such as transportation, healthcare, and education will face, companies in these sectors will eventually develop and evolve toward an open ecosystem.
The same can be said for the ICT industry, whereby in the cloud era the sector has already transformed from a single vertical industry and into an enabler of digital transformation. A report from the World Economic Forum revealed that in 10 years, the opportunities brought upon by the digital transformation of industries will reach $100 trillion, with the world seeing the rise of even more new applications.
“Vertical integration of the value chain is a thing of the past,” stated Guo. As the ICT industry cultivates a new ecosystem, the Huawei CEO believes it will have three key features—open, dynamic, and symbiotic—wherein enterprises, big or small, “can take part in this interdependent, symbiotic, and regenerative community of common interests, as long as it has its own unique value and makes its own unique contribution.”
As for Huawei’s role in this cloud-driven ecosystem, Guo stressed his company’s primary principle is to prioritize “creating a bigger pie (market) over fighting for a larger piece of a shaky pie.”
“It’s the path we must take to build our future ecological advantages,” stated the CEO. “Our responsibility as an industry leader is to leverage our core competency, and use insights gleaned from our customers as basis of development to increase the size of the market. We don’t emphasize on whether the resources will be owned by us, but instead we emphasize on would be what can we leverage and effectively connect with external resources to bring the future together.”
Shared success
With the IT ecosystem seen to evolve into an open and diverse model, managing cooperation should take precedence over managing competition. While boosting one’s core competitiveness and continuously innovating within the organization may help an enterprise grow fast, Guo said, “cooperation will make it go far. The concepts of cooperation and competition are inseparable in this ecosystem.”
Traditionally, enterprises are good at competition, but today they also need to be strong in terms of optimization capability. All parties in the chains need to leverage advantages to create value for their customers. “It’s not our competition that is our adversary, but the entire era we find ourselves in. And the coming intelligent world is an unpredictable adversary,” stated Guo.
“Benefit sharing is the driving force behind the evolution of the ecosystem, and the result of its successful development,” he pointed out, adding that for Huawei’s part, the company seeks to tap only one percent of the massive digital transformation pie, leaving the rest to its partners. The company has also been establishing industry and business alliances to foster collective industry growth and ensure customer success. Huawei is also actively involved in open source communities to further community-based collaboration. It is also keen on introducing more players into the market by establishing a robust developers’ platform to activate innovation and make the ecosystem flourish.
Brian Krzanich, the CEO of Intel, shared a similar vision in his keynote. “We’re moving towards a world where boundaries between the digital and the physical are eroding, where computing is truly mobile and ubiquitous, and wherever you go, data will flow out of your device,” he suggested.
This future, according to Krzanich, represents a huge opportunity for industries in general and companies individually that truly embrace the digital transformation. “And all of this requires the cloud,” he asserted, adding that succeeding in this era of being connected and data-driven will boil down to whether an organization truly embraces the connected, data-driven, cloud world.
As our world becomes more digital, no activity will happen as a result of isolation. Krzanich explained, “Everything has a connection, has its data flow between one location and another. The app on your phone, the turbine in the jet you fly from point to point, the buildings in this city—all are connected to the cloud which gathers and interprets this data, and from which come valuable insights that lead to better user experiences.”
The ongoing collaboration between Huawei and Intel concisely illustrates the potential of this new model where ecological alliances are being leveraged, along with their companies’ core competencies. “Today’s data networks are built on peoples’ devices, with data created by humans. Today, the average person produces 600 to 700 megabytes of data and by 2020, that will come up to 1.5 gigabytes of information off their devices. That’s already a lot of data, but then you consider all these connected machines,” said Krzanich. The average autonomous car, he cites as an example, produces 4,000 gigabytes of data a day.
“By 2020, one car will produce as much data as 3,000 people. There’s going to be a flood of data—and that’s going to be a huge network load but also a huge opportunity to optimize and create value,” he said.
It’s exactly why Intel is focusing on end-to-end solutions that are built on really strong ecosystem partnerships. Said Krzanich, “We at Intel recognize that this really requires a 5G network that’s much more flexible, able to go to many locations, and this is much more than an evolutionary step from 4G. Our partnership with Huawei, which is one of the global leaders of wireless infrastructures, is a great example of that ecosystem partnership. Our work with Huawei and other industry partners on open platforms and global standards will help to accelerate early 5G technology developments and make cloud computing more accessible and easier to deploy.”