Software cited as reason for Huawei’s recent Cloud and AI business restructure

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Last week reports regarding Huawei’s Cloud and AI divisions splitting only 14 months after they were announced, left many confused as to the company’s desire to continue working on technology and innovation in those respective fields. While Huawei confirmed thereafter that it was a restructure, no official announcement came out of the Chinese organisation as to what the precise motivation for the move was.

That changed this week, however, as rotating chairman Eric Xu (pictured in header) briefed media during a Huawei Global Analyst Summit on Monday.

Xu and his fellow executives were quick to acknowledge that 2020 brought with it many challenges, with the COVID-19 pandemic exacerbating its ongoing struggles over US sanctions. The uncertainty on both of these fronts has since prompted Huawei to look to consolidate many of its efforts and focus on resiliency as Xu terms it.

“We want to boost the resilience of our entire business, and since last year we have been working to optimise our portfolio with this goal in mind,” he explained when questioned on the future of Cloud and AI at Huawei.

One such area where Huawei aims to be more resilient is software engineering, looking specifically to enhance its capabilities on this front.

“We’re on the lookout for new business opportunities in the software sector. When we find the right fit, we will step up investment to increase the percentage of software and services in our revenue mix,” noted Xu.

He also emphasised the fact that ensuring that its software is less reliant on hardware will prove important for the organisation in terms of cloud computing moving forward.

“Software is at the core of cloud. We aim to build a stronger software organisation and ensure it’s decoupled from hardware. Going forward, we will invest more in software to drive growth in this sector and pave the way for ongoing growth in the future,” said the rotating chairman.

With continued uncertainty regarding Huawei’s ability to operate under current conditions, the move to focus more intently on the software side of the business makes sense. This especially as hardware in particular appears to be a sticking point for countries like the US and UK.

That said, with smartphones and routers a big part of Huawei’s recent success in South Africa, it is unclear just how much new hardware we’ll see on our shores as the spectre of US sanctions looms.

Robin-Leigh Chetty

Robin-Leigh Chetty

When he's not reviewing the latest smartphones, Robin-Leigh is writing about everything tech-related from IoT and smart cities, to 5G and cloud computing. He's also a keen photographer and dabbles in console games.

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