Huawei Cloud’s expansion in South Africa, driven by AI adoption and digital transformation, signals growth potential in the emerging cloud computing market.
The global cloud computing market has been experiencing significant growth, driven by increasing digitalisation across industries and the adoption of AI technologies.
From this mass evolution, emerging countries in the technology game like South Africa, are experiencing cloud services becoming essential for businesses and governments seeking to modernise their operations and boost economic competitiveness.
This trend has attracted major international cloud providers to establish local data centres and expand their offerings in the region, with Huawei Cloud emerging as a key player.
Huawei Cloud, the cloud computing arm of Chinese technology company Huawei, has reported substantial growth in its South African operations over the past five years.
Huawei market expansion and customer base
Huawei Cloud has made significant strides in the South African market, serving over 1,000 customers across various sectors including government, financial services, education, telecommunications, media and e-commerce.
It is also expanding its presence in the Middle East, reporting a tenfold revenue increase and serving over 900 local customers, whilst launching new data centres and partnerships to drive digital transformation across various sectors in the region.
“Go to cloud or not, is not an option anymore. The question is how far and how to do it quickly”. – Steven Chen, CEO of Huawei Cloud South Africa.
Jacqueline Shi, President of Huawei Cloud Global Marketing and Sales Service, says: “With this kind of strong support from different customers, our cloud business in South Africa has increased more than 16 times over the past five years.”
The company’s success can be attributed to its early entry into the market, becoming the first international vendor to host a local ‘hyperscale’ cloud data centre in the country.
However, despite the impressive growth, Jacqueline acknowledged that the total revenue amount “is still not so big” compared to the company’s global operations.
Yet this realisation has prompted Huawei Cloud to pursue an aggressive expansion strategy, focusing on launching more cloud solutions and aiming for a larger market share.
The company’s ambitions align with the projected growth of the South African cloud market. According to market research firm Africa Analysis, the sector is expected to expand at a compound annual rate of around 26% between 2023 and 2028, potentially reaching a value of approximately US$6bn.
Competitive landscape, strategy and future outlook
Despite Huawei Cloud’s progress in South Africa, it also faces stiff competition from other major cloud service providers, including Microsoft, Amazon Web Services and Google Cloud.
To strengthen its position, the company has invested in three data centre zones in Johannesburg, enhancing its ability to serve local customers with low-latency services.
Working on strategic focus and innovation, Huawei Cloud’s strategy in South Africa centres on three key areas, as outlined by Jacqueline Shi:
- Continuing to provide comprehensive data, AI and media cloud solutions through the local region.
- Maintaining a strong local team to offer structure and support for South African customers.
- Building and training the local ecosystem by empowering South African partners.
The company has also introduced new offerings to the South African market, including the Huawei Cloud Stack 8.5, which enables better hybrid cloud solutions.
Additionally, Huawei has launched several Pangu AI models in South Africa, focusing on weather forecasting, AI video services for target detection and knowledge management.
The company has also launched several digital talent cultivation projects, such as Leap, ICT Academy and Seeds for the Future, which have benefited over 16,000 people.
Furthermore, Huawei Cloud has pledged to accelerate digital transformation for local industries over the next five years, supporting the implementation of South Africa’s National Digital and Cloud Policy.
Reflecting the increasing pressure on organisations to digitalise their operations and leverage cloud technologies for improved efficiency and competitiveness,
Steven Chen, CEO of Huawei Cloud South Africa, emphasised the growing importance of cloud adoption for businesses: “Go to cloud or not, is not an option anymore. The question is how far and how to do it quickly”.
