Huawei Cloud: A Boosted Presence in South African Tech
The cloud computing market continues to expand, on account of increasing digitalisation and the continued adoption of artificial intelligence (AI) across key industries.
From such an evolution, countries like South Africa are able to emerge in the technology industry, as cloud services become more essential for businesses and governments who are eager to modernise their operations and become more competitive.
Such a trend has attracted leading international cloud providers to establish regional data centres to expand digital offerings in a particular location. Huawei Cloud is a clear example, the cloud computing arm of leading technology company Huawei, as it has recently reported significant growth in its South African operations within the last five years.
The company has made significant progress in the South African market and currently serves more than 1,000 customers across various sectors, including government, financial services, education, telecommunications, media and e-commerce.
Huawei market expansion and customer base
Huawei has been able to successfully expand its data centre services in recent years by making continuous investments to build new energy infrastructure for power systems and digital industries.
The company has been working with its customers and partners to expand the industry to not only embrace the intelligent computing era, but to prepare itself for the new AI-led era. In addition to South Africa, it has also found success in the Middle East with its tenfold revenue increase - whilst launching new data centres and partnerships to drive digital transformation across a broad range of sectors within the region.
"Go to cloud or not, is not an option anymore. The question is how far and how to do it quickly".
The company's success can be attributed to its early entry into the market, which saw it become the first international vendor to host a local hyperscale cloud data centre in the country.
"With this kind of strong support from different customers, our cloud business in South Africa has increased more than 16 times over the past five years,” comments Jacqueline Shi, President of Huawei Cloud Global Marketing and Sales Service.
However, despite the impressive growth, Jacqueline does acknowledge that the total revenue amount "is still not so big" compared to the company's global operations. This has prompted Huawei Cloud to pursue a stringent expansion strategy to focus on launching more cloud solutions to aim for a larger market share.
- The company's ambitions align with the projected growth of the South African cloud market. According to market research firm Africa Analysis, the sector is expected to expand at a compound annual rate of around 26% between 2023 and 2028, potentially reaching a value of approximately US$6bn.
Competitive landscape, strategy and future outlook
Despite Huawei Cloud’s progress in South Africa, it also faces stiff competition from other major cloud service providers, including Microsoft, Amazon Web Services (AWS) and Google Cloud.
To strengthen its position, the company has invested in three data centre zones in Johannesburg to improve its ability to serve local customers with low-latency services.
Working on strategic focus and innovation, Huawei Cloud's strategy in South Africa centres on three key areas, as outlined by Jacqueline Shi:
- Continuing to provide comprehensive data, AI and media cloud solutions through the local region.
- Maintaining a strong local team to offer structure and support for South African customers.
- Building and training the local ecosystem by empowering South African partners.
It has also introduced new offerings to the South African market, including the Huawei Cloud Stack 8.5, which enables better hybrid cloud solutions. This is in addition to digital talent cultivation projects such as Leap, ICT Academy and Seeds for the Future, which have already benefited more than 16,000 people.
Huawei Cloud has pledged to accelerate digital transformation for local industries over the next five years, supporting the implementation of South Africa's National Digital and Cloud Policy.
“Go to cloud or not, is not an option anymore. The question is how far and how to do it quickly,” explains Steven Chen, CEO of Huawei Cloud South Africa, explaining the growing importance of cloud adoption for businesses, and the wider data centre sector, moving forward.
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