Huawei has positioned itself as an IoT leader. The Chinese company has undertaken several initiatives that aim to accelerate IoT ecosystem development both regionally and globally. Speaking to Telecom Review ahead of GITEX 2017, Charles Yang, president, Huawei Middle East, disclosed some of the ways in which Huawei is driving long-term sustainability in the Middle East region through various initiatives aimed at enabling successful IoT strategy and business development.
IoT has been around for some time now. As president of Huawei Middle East, how do you see the IoT market development in the region?
Currently, IoT is on the fast track to becoming a significant market for both carriers and enterprise sectors in the Middle East. To provide IoT services through the cloud will be the trend. This rapid development has been sparked primarily by the smart city mega projects initiated by regional governments almost three years ago. National strategies and vision agendas are aimed at leveraging innovation to drive long-term sustainability. Smart city, smart metering, smart home, logistics and transportation, and connected car are poised to be the some of the most promising market segments to drive IoT development in the region.
According to The global ICT consulting and advisory services firm International Data Corporation (IDC), IoT investments in the Middle East and Africa topped more than 6 billion USD in 2016. IoT revenues in the region will increase at a compound annual growth rate (CAGR) of 21.3% over the next four years, to total more than $14.3 billion in 2020.
Personally, I am optimistic about the IoT market, and Huawei, together with carriers, enterprises and industry partners, will cooperate to ensure steady and profitable IoT market growth in the Middle East.
I agree the IoT market is enormous; however, I haven't seen IoT boosting from carriers in the region so far. What are the main challenges undermining carriers IoT development in the Middle East region?
In our opinion, carriers moving into the IoT space will be defined as connectivity providers, service providers and data providers.
As you mentioned, IoT is a big market with tremendous applications and opportunities especially for carriers that already own the connectivity, which is the foundation of any IoT application. But relying only on connectivity will not bring significant revenue; carriers need to extend their roles and responsibilities beyond connectivity to providing service and data analysis. The ultimate value of IoT lays in data processing and analytics, and application enablement, hence, the need for an IoT platform that enables successful IoT strategy and business development. IoT platforms manage end point devices, network connectivity, collect data, enable vertical service and serve to explore data value by big data analysis.
On the one hand, small and medium operators are very reluctant to invest and develop IoT due to the platform and related ecosystem development required resources and costs. On the other hand, big operators that can afford a platform and have clear services and business development plans also spend all their time building and integrating it into the existing equipment and developing new ecosystems, instead of focusing on the core areas of market and business development.
In short, the traditional way of doing IoT leads to a huge investment and long time to market, which is why carriers are actively seeking a new way.
So as president of Huawei, a leading telecom services provider in the region, how do you plan to address these challenges in order to unleash IoT market development?
Huawei has been very keen to understand and spot these issues early, and has started to work on solutions that will help carriers address the aforementioned economic and technical challenges in the Middle East. Therefore, Huawei introduced the IoT Hosting Center or Platform as a Service (PaaS) solution to help customers quickly develop IoT business while speeding up the time to market, and saving on investment and operational costs. Our PaaS is paving a new path of partnership between Huawei and carriers/enterprises that will allow them focus on marketing and business development by easily launching new services with reduced initial investment, leaving the technical and ecosystem development hurdles to Huawei to handle.
Huawei's PaaS solution is built on open platform, cloud computing and big data technologies in the Huawei IoT Hosting Center. It is scalable, secure, one-stop IoT platform solution for all IoT applications with an established ecosystem and a pre-defined services catalogue that includes technical support, marketing support and business cooperation.
Huawei's Hosting Center can connect millions of end devices/sensors and aggregates data on a big data platform. It allows for the handling of rules and events, and provides over 100 open APIs and serial agent software to ensure various applications release with simplified device access, guaranteed network connection, and seamless data transfer between upstream and downstream devices.
As for ongoing challenges, we have several thoughts on how to address them:
1) Transition from traditional Capex to hosting cloud services, saving on costs and shortening time to market.
2) Go verticals. Help our customers to deeply engage with industry as well as government clients, to get more business opportunities.
3) Designing new business models, for example, transition from traditional data flow charging to messages charging or lifecycle charging, helping our clients become more profitable.
4) Actively build ecosystem along with our customers, locally and globally.
Where is the Huawei Hosting Center deployed in the region? Is it limited to one country only or open to all?
The Huawei Hosting Center is deployed in the Kingdom of Saudi Arabia and serves as a secure platform for all the operators in the Middle East. Data is isolated and privacy is protected. Currently, the Hosting Center helps carriers develop smart home, smart meter, smart parking and connected car services. More applications will be available according to market development and requirements. Huawei is actively working with quite a few carriers to launch IoT services across the Middle East based on the Hosting Center.
As the biggest challenge to IoT development, how does Huawei intend to develop an IoT ecosystem with the Hosting Center?
Indeed, the ecosystem remains one of the biggest challenges when it comes to IoT development and commercialization. This is mainly due to the fragmented and increasing number of alliances and standards bodies around IoT, and the lack of openness and unified OS for them.
To address this issue, Huawei has undertaken several initiatives that aim to accelerate IoT ecosystem development regionally and globally. Huawei has committed to invest $1 billion over five years in equipment and in a vendors development plan. In 2016, Huawei announced its global IoT OpenLab initiative aimed at developing products and applications relating to narrowband internet of things (NB-IoT) and other IoT technologies. The global 7 labs provide a pre-integration testing environment for application developers and device, module and chip manufacturers.
In the Middle East, the UAE OpenLab was launched in partnership with Etisalat, and offers support to developers and partners across the region. They will work with both Huawei and operators to explore cutting edge developments including network solution verification, new application innovation, device integration and product compliance certification.
We are also planning to open a country level IoT Lab to accelerate IoT solution and applications in the country by joint innovation, partners' incubation and ecosystem development in partnership with the UAE's TRA.
Following the same initiatives, Huawei created a program for partners' recruitment and management, as well as a developers' community. The Hosting Center offers carriers and enterprise customers an open development platform with security, data and network APIs designed to unlock the value of both fixed and wireless networks. Huawei's strategy is to create a larger developer community and invite all IoT industry players to support IoT technologies and business development in the region.
Since Huawei PaaS is a good initiative to develop IoT market in the region, can this business model support varieties of IoT business?
Of course, the main purpose of building up an IoT Hosting Center is to speed up IoT development in the region. The PaaS business model is flexible and tailored per use cases in order to satisfy a variety of needs of operator and market development.