Alibaba Group and Amazon.com Inc. will now have a new competitor as Huawei Technologies Co. Ltd. announced on Tuesday, April 11, that it is expanding into public cloud services, Reuters reported.
According to Huawei, it has a new unit tasked to hire 2,000 more people this year.
"We used to focus on private cloud and did well," Zheng Yelai, president of the new unit, said. "Now the purpose is to strengthen our public cloud offering."
The market for public cloud services is estimated to climb from $247 billion this year to $383 billion by 2020, according to Consultancy Gartner.
The report said that Huawei's expansion into global cloud services is expected to bring revenue to the company at a time when smartphone sales are declining and spending on telecommunication infrastructure has decreased.
Alibaba Cloud would be Huawei's biggest rival in China while the latest competitor is Dalian Wanda Group Co. Ltd. in partnership with International Business Machines Corp.
Huawei has a global network of telecom clients and partners, especially in Europe and other developing countries, which will give the company with an edge against its rival, Eric Xu, deputy chairman of Huawei's board and one of three rotating chief executive officers, said.
"I believe we can build upon our advantages accumulated over the years," Xu said.
"Compete and coexist with AWS and Microsoft, I believe that is the trend we are going to see," Xu said, referring to efforts by Huawei vs Amazon Web Services and Microsoft Corp.'s Azure.
Xu added that Huawei will not lower its prices to compete for market share against its rival.
"Our strategic focus will be on our telecom partners' cloud transformation," Xu explained.
The company expects its revenue from its cloud computing services to reach 10 billion yuan by 2020.
These remarks were made as China's Ministry of Industrial and Information Technology on Monday, April 10, published a Cloud Computing Development Three-Year Action Plan.
China's cloud computing industry is expected to grow from 150 billion yuan in 2015 to 430 billion yuan ($62.32 billion) by 2019, the ministry said in its forecast, adding that "two to three leading global players" may also emerge in the coming years.