HAS2019: Huawei Lays Out Its AI Service Strategy

Introduction

In a perfect world for an ICT vendor (and for that matter, a customer) the ability to offer up a full stack of ‘all’ technologies’ to create a full stack of ‘all services’ is the ultimate goal. Here every new customer requirement could be met through an end-to-end life cycle while the incumbent vendor sustains a distinct competitive advantage. Vendors would offer up vertically integrated products and services and share a horizontal management platform across industries. This two by two matrix is all but impenetrable to competition and tightly managed by the vendor. After attending Huawei’s annual analyst summit, HAS2019, in Shenzhen, China I came away with the impression that this was a leading goal of its own ICT strategy. On Huawei’s journey to become a full stack Artificial Intelligence supplier, it plans to execute on that strategy by initially offering a full stack Big Data service running on its full stack Cloud Computing platform.

Let’s give Huawei credit where it is due, there are few if not any ICT vendors left who have the resources, capabilities and product portfolio to deliver this business model. Huawei may be the only one to do so. However, is this the right strategy for today’s ICT and related business services model? Is this what customers want from vendors? How will competitors respond to Huawei’s strategy?

Huawei’s Cloud Computing

Let’s start with cloud computing. The foundation of today’s ICT infrastructure is built upon a robust cloud computing offering. Already we are seeing this market continuously evolve from everything on a single public or private cloud to a world of interconnected multi-cloud platforms supporting hybrid cloud offerings. These complicated permutations for customers would suggest that Huawei’s strategy of offering the full cloud stack removes process friction from the cloud infrastructure management and generates a more simple environment. Here, the combination of Huawei’s full stack cloud platform combined with its full stack ecosystem and services offers up a solution whereby a customer’s transition to a hybrid cloud solution can be accelerated. Huawei’s global cloud presence is significant and growing. Currently it can provide cloud services across 23 geographies within every major region except North America and Australia.

Competitive Viewpoint: Cloud service providers (CSPs) know that future business models will be based off multi- and hybrid cloud environments. For CSPs to be successful they need attract and retain customers to be able to migrate data away from their competitors and onto their own platform. For example AWS already claims that it runs more Microsoft compatible cloud instances on its platform than Microsoft. As customers build next generation business solutions fed by a broad range of data sources, it becomes imperative for their cloud vendor to be able to curate these data sources and feed their own analytics and big data engines to generate artificial intelligence (AI) outcomes. AWS, Microsoft, Google, Alibaba and others will not freely promote Huawei to migrate their customers’ data and vice versa. However, the ability to aggregate varied data sources is an ICT data management software opportunity and this market is mature with several established vendors. In addition these vendors have strong cloud platform positions with Huawei’s competitors.

With these market conditions in play, Huawei should be prepared to accept that while their full stack cloud strategy covers all the needs of their customers, it will be a goal that is almost impossible to act upon. We would suggest that Huawei market its ability to be an open, compatible and global platform offering up a wide range of customer opportunities for the software based data management companies to build their AI-based solutions. To go to market on this will also mean that it can offer up a robust and more focused big data / analytics strategy.

Big Data

Huawei has made the commitment to build an intelligent big data platform and has claimed to be already in 60 countries, signed up more than 1,500 customers and 500 partners. While we cannot verify these numbers, we believe that most of Huawei’s larger big data customers are local telco companies such as China Mobile and China Unicom along with financial institutions such as the Shanghai Stock Exchange, China Construction Bank, China Merchants Bank and Bank of Communications.

With Huawei’s known strength in specialized microprocessors, its knowledge in high performance computing, distributed databases, and broad product portfolio in traditional ICT infrastructure (especially storage and compute) we believe that this is an opportunity to be successful.

Competitive Viewpoint: With Huawei’s global cloud computing footprint combined with its strength in processing big data, we believe that this is one of their best opportunities to be the ‘engine of choice’ for many big data/ analytics software vendors. While this again thwarts Huawei’s full stack mission, it makes them a very important and integrated part of a customer’s digital transformation – something that is missing in Huawei’s marketing position and messaging. Digital transformation is only as good as the fuel from digital outcomes based off data analytics. When a customer deploys a multi-cloud strategy, Huawei should position its cloud platform as the analytics engine. However, for the analytics process to be complete, data sources need to be collected from across the end-to-end infrastructure and therefore any vendor needs to develop not just a strong enterprise solution of data analytics but also an edge computing strategy.

Edge Computing.

Edge computing has many definitions, but for the sake of this document, we are simply implying that any device in a distributed network that has the ability to process data complies with an edge computing model. With this in mind, there has been a rush to build out edge computing capabilities by CSP traditional ICT vendors and of course industry specific Operations Technology (OT) companies. Processing at the edge of the network is much more complicated than many vendors realize or appreciate. While most lead off with offering up security services as their differentiator, very few actually know how to perform data and systems management services. These management services are critical to be able to perform any level of analytics and ultimately generate AI outcomes. AI services will mature into mission critical offerings that drive and support digital transformation in markets such Industry 4.0, autonomous driving, and other latent-sensitive applications.

At HAS2009, Huawei announced its strategy to provide customers with the ability to process data at the edge of the network while emphasizing the importance of synergy between cloud computing, the edge, and the endpoint nodes. A more valuable position would have been to stress the need for synchronization between these three access points. Quoting from a white paper from the Edge Computing Consortium ‘With the rapid development of machine learning, deep learning and edge AI chips, AI inference is extending to edge from cloud’, Huawei announced ‘KubeEdge’.

KubeEdge’s mission is to brig AI to the edge of the network. Key features from KubeEdge include a lightweight container runtime, edge computing with GPU and NPU chipsets, automatically deploy applications at the edge while maintaining edge-cloud synchronization and coordination.

Competitive Viewpoint: Bringing AI to the edge of the network is an ambitious goal for Huawei to attempt. The AI process steps of learning, inference, and training is typically performed at the Enterprise where compute resources are in abundance. Companies such as nVidia, Microsoft, Google and AWS lead the AI market and are carefully trying to understand what it takes to generate AI-based outcomes at the edge of the network.

Offering a AI environment using lightweight containers is a starting point but there is so much more hardware and software work to be done to make this not sound like it’s a science project and a ‘me too’ strategy. Huawei’s current strength is firmly in its chipset road map offerings of Kunpeng (arm-based cpu for datacenter workloads), Ascend (AI chipset based on unified scalable architectures), and CANN (chipset operators API and tools library.

Conclusion and Recommendation

For Huawei and its customers: Huawei’s AI services solutions is predicated on how successful it executes its cloud computing strategy. Having global cloud services are table stakes in this race to curate and process as many varied data sources to ensure the most valuable AI services. However in the emerging multi-cloud / cloud interconnect world, Huawei will be faced with step competition from all of the CSPs who will actively block any attempt to migrate customers’ data to the Huawei Cloud. Huawei’s marketing strategy should not be to position itself as the full stack provider but rather as the AI market enabler for a couple of reasons:

1. Many customers understand the value of vertically integrated solutions (as they work very well in consumer markets) by reducing complexity, improve integration but increase vendor lock-in while reducing their own competitive innovation. However, in the customers’ minds, this equates to more expensive operating models. We recommend customers seek the best of breed at every stage of an AI workflow, and include Huawei where they meet that criterion.

2. Huawei and its customers should look at the places where Huawei’s strong product portfolio in infrastructure and processing create more competitive value for the customer’s AI strategy and partner with the best of breed in the remaining places. A Hybrid AI solution will generate more innovation, attract more developers, and accelerate AI deployments. By taking this approach, Huawei is embracing its ICT strength while acknowledging that the AI/analytics market is being disrupted as many levels by vendors. These vendors include:

a. Snowflake (data warehousing)

b. Tableau (data visualization)

c. Talend (Data Integration)

Finally, any AI solutions market will be driven by the creation of the most intense customer centric ecosystems. End user customer ecosystems are complicated and difficult to manage. However, in the era of creating and delivering AI services, Huawei and its customers should look to partner with the best ecosystems ‘manager’ – one who has the voice of the customer but has the digital experience to create the ecosystems management platform. These platform vendors will not be traditional systems integrators but rather be customer engagement and services vendors. Business models will be based off subscription and consumption frameworks and everyone, including Huawei will be expected to have fully transformed themselves into digital business services companies. This is not an easy task, but one that we feel Huawei has the ability to adapt over time.

Huawei's Pre MWC (Mobile World Congress) 2018 Announcements

February 9th 2018.

The Mobile World Congress in Barcelona is just around the corner and tech. suppliers are briefing the analyst community on what to expect. Given the importance of connectivity, be it in a mobile device or a simple sensor, this year’s event could be the year when many emerging and maturing technologies finally hit a point where they have satisfied the sceptics. The technology list is long and included #IoT (The Internet of Things), #5G, #AI (Artifical Intelligence), NB-IoT, Lora and Sigfox, and Machine Learning. Carriers will be looking for new business models as they plan and strategize what new data services they can create and deliver to tech. buyers. Of course any time the carriers make a move, they are matched by the OTT (Over The Top) and IT vendors – all jockeying for the mind share and wallet of the buyer.

I will be at MWC covering the event looking at what disruption and trends I will see that are emerging from the abundance of data being generated by connected devices. My coverage began earlier this week with an analysis of a Huawei pre-briefing in London. Please take a moment to see what one of the most influential tech. suppliers is announcing at MWC.

Huawei’s executive director of the board, and president of the carrier business group, Ryan Dings kicked off the session with forecasts that by 2025 there would be 40 billon devices ‘sensing the physical world’, 100 billion connections  with ‘data going online to power machine intelligence’, and180 billion terra bytes of data resulting in ‘big data and AI powering applications’. He also stressed, like many in the industry today, of the importance of using #AI, and in Huawei’s case, this means AI in the cloud, in the pipe (with intent-driven networks), and AI chips, AI voice assistants devices. All of this will be driven on one physical network (5G) giving rise to new carrier opportunities with business models based off IoT and business services off video. Finally, Huawei is not slowing down its R&D spending as it continues to invest between $10 Billion - $20 Billion over the next 5 years (Note: in 2017, they invested $12 Billion).

At the pre-briefing, one of the highlights for MWX will be Atlas. Huawei executives shared generic details about its AI platform designed to manage and orchestrate AI functions from the edge of the network to the core. Atlas is described as a heterogeneous computing solution managing CPU, GPI and FPGA chipsets with the single click. However, in our opinion, we should view Atlas as very strategic to the success of 5G management. Atlas should give carriers the ability to create 5G management services using a framework built on three tenets – Intelligence, Synergy and Ultra Broadband.

Huawei has also invested a lot in Narrow Band IoT, or NB-IoT, and they believe that the industry is near a market inflection point. They estimate that in 2018 there will be 100 networks running NB-IoT , up from 39 in 2017, 1.2 million sites up from 500,000 in 2017, and 150 million connections up from 10 million in 2017. All of these statistics are good news for telco carriers who see this broadening infrastructure support IOT. Overall IoT growth rates translate to revenue for telco carriers and Huawei forecasted that in 2018 the revenue will be $8 Billion, rising to $38 Billion in 2020, and hitting $400 Billion in 2025. The important metric for everyone is that IoT as a percent of total revenues will finally break 1% in 2019.

 

This is significant as it represents the knee in the revenue curve rising to 2% in 2020 and shooting up to 20% in 2025. Carriers are now seeing IoT beyond a connectivity sensor, but rather an enabler of business life cycle solutions services.

Finally, Huawei promoted its ‘3T+1M’ IoT security framework. The 3T represents 3 technologies – Defense @ The Device, Assurance @ The Pipe, and Analysis @ The Cloud. We assume that the ‘3T+1M’ will wrap itself into the OceanConnect cloud IoT Platform as part of the overall ‘Cloud plus AI’ go to market strategy.

In our opinion, it is clear that Huawei is working hard at creating, enabling and sustaining the carrier eco-system to take full advantage of the next connected world. This environment will be running off a 5G network, bring data via IoT and video, serviced at the edge of the network or in the cloud, and driving analytics and machine learning in a full vertical stack. We would like to see the broader strategic picture whereby Huawei’s carrier group integrated its capabilities with its core enterprise network and data center group and its consumer/mobile group. This vision would differentiate Huawei from most of the ICT tech. suppliers, while not under playing how challenging it would be.

Does IBM and Maersk Block Chain Joint Venture Make Sense?

The Announcement:

IBM and Maersk announced a joint venture applying Blockchain to improve global trade and digitize supply chains. This comes at a time when companies and vendors are trying to legitimize the use cases for the promising capabilities of Blockchain.

 

Maersk, a global leader in container logistics, recently reported that nearly 80% of its operating revenues were generated by its transport and logistics division (Note: In 2016, 57% of Maersk's $36.4 billion in operating revenue was generated by Maersk Line).

 

IBM and Maersk’s technology is built on Hyperledger Fabric 1.0, a blockchain first developed by IBM that is now maintained by the Linux Foundation’s Hyperledger group. However, IBM and Maersk began a collaboration in June 2016 to build new blockchain- and cloud-based technologies. Since then, multiple parties have piloted the platform including DuPont, Dow Chemical, Tetra Pak, Port Houston, Rotterdam Port Community System Portbase, the Customs Administration of the Netherlands, U.S. Customs and Border Protection.

 

The joint venture will now enable IBM and Maersk to commercialize and scale their solutions to a broader group of global corporations, many of whom have already expressed interest in the capabilities and are exploring ways to use the new platform, including: General Motors and Procter and Gamble to streamline the complex supply chains they operate; and freight forwarder and logistic company, Agility Logistics, to provide improved customer services including customs clearance brokerage.

 

Our Opinion:

Blockchain has been on a marketing rampage for some time now, and finding justifiable use cases has not been easy. Here are some reasons:

Deploying Blockchain into commercial environments will require IT departments to consider how to truly support a compute intensive distributed application linked back to critical business systems. Creating a high volume transaction based system outside the confines and security of the enterprise is not easy. To that point Blockchain isn’t suited to all commercial applications that vendors and customers would hope for.

 

Many people have tried to link together  IoT and Blockchain as a solution to IoT’s security challenges. IoT sensors attached to assets create the data that could feed a Blockchain application. While this sounds good in theory, it is an incredibly difficult real time infrastructure challenge. The distributed ledger framework that Blockchain is built upon is very compute intensive, while the IoT ‘edge’ computing capabilities are still in an embryonic stage. With this situation, Blockchain solutions will probably have to be integrated into a cloud/network solution to present the data to enterprise-grade platforms.

 

With this as a backdrop, assets such as ships and containers are good use cases for using Blockchain. Firstly, the assets are typically slow moving, easy to locate, easy to record their information, and don’t necessarily need high speed, real time financial trading desk infrastructure attributes. This would enable a centrally managed, but a disturbed Blockchain environment to be built. This could deliver some of the key business functions in international supply chain management where Maersk’s core business plays such an important part  (e.g. according to a 2013 study by the World Economic Forum, reducing the friction around information-sharing and border administration when it comes to international trade “could increase GDP by nearly 5% and trade by 15%”—a boost that amounts to trillions of dollars).

 

Our conclusion is that IBM and Maersk have a solid Blockchain use case that has the potential to create significant economic improvements, while not overstretching the capabilities of a Blockchain technology eco-system to the point of making it vulnerable or non-supportive in a scalable production environment.

Causeway Connections Creates The Second Chance Program - Donates 10% Of Revenues To Charity

Causeway Connections believe that our expertise holds transformational potential. We believe in partnering with our clients to build a better world with technology being a material element. We also believe that technology on its own is not enough if not connected with communities that we live in and care about.

This is why we are proud to introduce the Causeway Connections Second Chance program. Causeway Connections will donate 10% of revenue from every contract to a charity of the customers choosing.  Causeway Connections is committed to helping others gain a second chance in life. This way we partner with visionary clients to build stronger communities fueled by technology and animated through human connection.

Founder, Principal and Chief Strategist, Vernon Turner has seen the power of being given a second chance in a variety of different ways in his life. Mr. Turner immigrated to the United States from Ireland in 1988. Despite a successful career in the U.K., Turner had often dreamed of working in the U.S. With the support and encouragement of several individuals, he was successfully able to restart his career. He knew this “second chance’ was gift to embrace.

In 2011, Turner had emergency six-artery bypass surgery, just barely staving off a massive heart attack. Turner firmly believes he was again given a ‘second chance’, and everyday looks at ways to honor that opportunity.

Finally, Turner was a part of a reduction in force at his most recent employer after being employed there for almost 19 years. The layoff, and believing that his work with the Internet of Things has not come to a conclusion propelled him to grab another ‘second’ chance, and encouraged him to start Causeway Connections.

Throughout Turner’s personal journey, he has always believed in finding ways to help others get their ‘second chance’.  Part of this support has come through fund raising for charities as part of his marathon runs. He has raised over $20,000 for the Boomer Esiason Foundation for Cystic Fibrosis, The Framingham High School Foundation, and Resiliency For Life (Framingham High School).

Vernon Turner Launches Causeway Connections - A Different IoT Consulting Company

 

 

 

 

Welcome to Causeway Connections, the new ICT market research firm that has its roots firmly placed in real-world Internet of Things (IoT) experience. Founded by Vernon Turner, IDC’s former IoT Research Fellow and Senior Vice President, the mission of Causeway Connections is to provide customers with strategic advice and services that goes beyond the initial influence of an IoT environment.

Technology market coverage will include adjacent technologies such as Artificial Intelligence, Blockchain, Big Data, Machine Learning, Digital Twins, Augmented Reality, and Robotics. Advice on new software programming and services models for infrastructure, network, mobile, cloud platform and edge computing will be introduced to both legacy and green field deployments. Geographic coverage will be global and IoT business markets will include smart cities, connected transportation, manufacturing, buildings, consumer/home, healthcare, retail and energy sources. Causeway Connections has the global industry network connections to plan, manage and deliver an eco-system based IoT solution that promises to challenge the status quo.

 

Turner has a global reputation of being a passionate, and candid change agent, transforming and accelerating all sizes of businesses from global multi-billion dollar businesses to small, nimble and innovative startups into their next phase of growth, scale and success. A global events spokesperson for IoT, enterprise and network infrastructure, and digital disruption, Turner has also been on advisory boards such as the IoTWorld Forum and The State of Illinois Smart State. Turner is consistently ranked in the top tier of all IoT technology analysts in terms of influence (via Onalytica and other sources). While at IDC, Turner became its first research fellow (for IoT) in more than fifty years, and was also awarded the Alexander Motsenigos Memorial Award, presented to the entrepreneurial IDC U.S. employee who demonstrated the passion, persistence, and collaboration needed to launch his/her innovative vision.

 

What’s in a company name? Causeway Connections exposes the love for Turner’s upbringing on Northern Ireland’s coastline. The Giant’s Causeway is a rock formation that, for millions of years, has stood as a natural rampart against the ferocity of the Irish Sea and a stepping stone to Scotland. The rugged symmetry of the hexagonal columns allows visitors to walk safely from one stone to the next. Combining these two qualities of a solid pathway connected to neighboring rocks gave Turner the inspiration to start Causeway Connections as the trustworthy research firm that safely takes customers to the next step of their IoT journey.