- Huawei made clear its strategy is now based on ‘platform + ecosystem.’ This is the case across the business, but nowhere more acutely than in IoT.
- While investing in the ecosystem is a requirement, its diverse nature makes for a highly fragmented IoT market.
Huawei held its flagship European event in Rome this week, combining a showcase for customers and partners with a series of broad brush announcements around investing in its global digital platforms and ecosystem. The key takeaway from the waterfall of positioning messages is that Huawei not only recognizes its need to partner with other players across its business; it has also made its ecosystem central to its strategy and is therefore investing heavily in strengthening relationships with suppliers, developers, partners, and customers. In the Internet of Things (IoT), it already has a head start, but a number of new developments will support the ongoing commitment to the ecosystem:
- Investment of $50 million over three years in its OpenLab program in Europe, expanding its site in Munich focusing on Industry 4.0 and smart manufacturing by the end of 2018, and opening a third site in Europe by 2021. With its existing OpenLabs in the region, Huawei has developed joint solutions and go-to-market with more than 40 partners, including both innovative startups and global solution providers like SAP, Accenture, and Wipro.
- Launch of a multi-tenant IoT Hosting Center in Europe for incubating local digital ecosystems and accelerating IoT business development. Huawei already announced a similar endeavor in the Middle East earlier this year.
- Announcement of several joint development deals which leverage Huawei’s IoT products and ecosystem, including with WAGO for energy efficiency management in smart factories, Eluminocity for smart city development, and Digicom for smart parking terminals and OpenCloud.
Ecosystem Includes Customers
By investing in joint labs, hosting infrastructure, and working together with application specialists, Huawei can only get so far in reaching the market with solution delivery. System integrators (SIs) and telcos are also key members of the IoT ecosystem, as are the enterprises driving demand for digital transformation solutions. The latter need the former for expertise in bringing the different solution layers together, but service providers are also dependent on their enterprise customers to bring vertical expertise needed to each project.
Huawei is working on standards development for NB-IoT in key verticals like utilities, and SIs try to develop vertical people skills, but both camps understand that ambitious IoT projects can fail without direct and significant input from the enterprise. At a minimum, this is the definition of co-creation. But, there is also potential for enterprises to emerge as IoT experts in their own industries and, branching out as SIs themselves, to implement solutions for their own customers or supply chain partners (as DHL has done with Huawei).
From Deployments to Services
Getting end-to-end solutions by leveraging all manner of ecosystem members for an all-hands-on-deck approach to solution delivery can lead to successful deployments, but Huawei and other vendors recognize that very few IoT use cases have achieved replicated adoption yet, making for a still highly fragmented space.
Telcos could play a role here as the single point of contact for replicated IoT services given their role in connectivity management – and Huawei does have European examples it can point to with Orange, Deutsche Telekom, and Vodafone (with which it has collaborated on a NB-IoT lab in the UK to develop joint value propositions and go-to-market), but when it comes to which part of the ecosystem will be able to assert leadership in end-to-end IoT delivery, it is still early days. This was noted yesterday in “IoT Forecasts Augur Well for Software and Services, a $226 Billion Market by 2023,” which concluded it is “too soon to say whether there is room for all of the different vendors chasing many of the same verticals with, in many cases, overlapping capabilities,” despite the bullish revenue forecast for IoT solutions.