Close Menu
TechCentralTechCentral

    Subscribe to the newsletter

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    Facebook X (Twitter) YouTube LinkedIn
    WhatsApp Facebook X (Twitter) LinkedIn YouTube
    TechCentralTechCentral
    • News

      Listed: All the MVNOs in South Africa – 2025 edition

      19 June 2025

      TCS | Tech, townships and tenacity: Spar’s plan to win with Spar2U

      19 June 2025

      WhatsApp founders hated ads – Meta is adding them anyway

      19 June 2025

      China’s car factories run cold as price war masks deep overcapacity

      19 June 2025

      Yellow Card, Visa in deal to hasten stablecoin uptake in Africa

      19 June 2025
    • World

      Watch | Starship rocket explodes in setback to Musk’s Mars mission

      19 June 2025

      Trump Mobile dials into politics, profit and patriarchy

      17 June 2025

      Samsung plots health data hub to link users and doctors in real time

      17 June 2025

      Beijing’s chip champions blacklisted by Taiwan

      16 June 2025

      China is behind in AI chips – but for how much longer?

      13 June 2025
    • In-depth

      Meta bets $72-billion on AI – and investors love it

      17 June 2025

      MultiChoice may unbundle SuperSport from DStv

      12 June 2025

      Grok promised bias-free chat. Then came the edits

      2 June 2025

      Digital fortress: We go inside JB5, Teraco’s giant new AI-ready data centre

      30 May 2025

      Sam Altman and Jony Ive’s big bet to out-Apple Apple

      22 May 2025
    • TCS

      TCS+ | AfriGIS’s Helen Hulett on how tech can help resolve South Africa’s water crisis

      18 June 2025

      TechCentral Nexus S0E2: South Africa’s digital battlefield

      16 June 2025

      TechCentral Nexus S0E1: Starlink, BEE and a new leader at Vodacom

      8 June 2025

      TCS+ | The future of mobile money, with MTN’s Kagiso Mothibi

      6 June 2025

      TCS+ | AI is more than hype: Workday execs unpack real human impact

      4 June 2025
    • Opinion

      South Africa pioneered drone laws a decade ago – now it must catch up

      17 June 2025

      AI and the future of ICT distribution

      16 June 2025

      Singapore soared – why can’t we? Lessons South Africa refuses to learn

      13 June 2025

      Beyond the box: why IT distribution depends on real partnerships

      2 June 2025

      South Africa’s next crisis? Being offline in an AI-driven world

      2 June 2025
    • Company Hubs
      • Africa Data Centres
      • AfriGIS
      • Altron Digital Business
      • Altron Document Solutions
      • Altron Group
      • Arctic Wolf
      • AvertITD
      • Braintree
      • CallMiner
      • CYBER1 Solutions
      • Digicloud Africa
      • Digimune
      • Domains.co.za
      • ESET
      • Euphoria Telecom
      • Incredible Business
      • iONLINE
      • Iris Network Systems
      • LSD Open
      • NEC XON
      • Network Platforms
      • Next DLP
      • Ovations
      • Paracon
      • Paratus
      • Q-KON
      • SevenC
      • SkyWire
      • Solid8 Technologies
      • Telit Cinterion
      • Tenable
      • Vertiv
      • Videri Digital
      • Wipro
      • Workday
    • Sections
      • AI and machine learning
      • Banking
      • Broadcasting and Media
      • Cloud services
      • Contact centres and CX
      • Cryptocurrencies
      • Education and skills
      • Electronics and hardware
      • Energy and sustainability
      • Enterprise software
      • Fintech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Lifestyle
      • Motoring
      • Public sector
      • Retail and e-commerce
      • Science
      • SMEs and start-ups
      • Social media
      • Talent and leadership
      • Telecoms
    • Events
    • Advertise
    TechCentralTechCentral
    Home » Cloud services » Huawei besieged on new front as US targets cloud business

    Huawei besieged on new front as US targets cloud business

    By Agency Staff15 October 2020
    Twitter LinkedIn Facebook WhatsApp Email Telegram Copy Link
    News Alerts
    WhatsApp

    Huawei Technologies, already getting squeezed out of Europe’s vast market for the next generation of telecommunications equipment, is under siege in another fast-growing business: cloud computing.

    US officials have been lobbying European lawmakers and industry leaders to use Western companies — while shunning Huawei — to build data centres and offer infrastructure to handle the growing tide of information.

    As part of a European tour last week, US undersecretary Keith Krach met executives including Deutsche Telekom CEO Timotheus Hoettges and Meinrad Spenger, the head of Spanish telecoms carrier MasMovil, to urge them to ditch Chinese vendors of cloud infrastructure on data-security concerns.

    Look at this as an extension of that 5G. Clouds are really important, whether it’s in the service cloud or in data centres themselves. This is a big deal

    “Look at this as an extension of that 5G,” Krach said. “Clouds are really important, whether it’s in the service cloud or in data centres themselves. This is a big deal.”

    Pressure from Washington affects one of Huawei’s fastest-growing businesses. China’s largest technology corporation by sales has in past years accumulated an impressive roster of clients, including Deutsche Telekom, France’s Orange and Spain’s Telefonica. It’s now seeking to expand its reach to customers such as oil companies, power grid operators and logistics providers.

    Vulnerable

    While Alibaba Group operates a larger cloud business and WeChat-operator Tencent isn’t far behind, Huawei is more vulnerable given the Trump administration has managed to convince some governments in the region to exclude its 5G networking gear. Europe’s cloud infrastructure is a US$12.4-billion business that grew 33% this year from 2019, according to market researcher IDC. US players dominate, led by Amazon.com ’s AWS and followed by Microsoft, IBM, Google and Oracle.

    “Chinese players like Alibaba and Tencent are not making huge inroads into the European market,” according to IDC’s Carla Arend.

    A spokesman for Huawei declined to comment on its European cloud business.

    Similar to European telecoms firms slowing turning away from Huawei for their 5G infrastructure, US pressure is already working in the cloud. Orange CEO Stephane Richard told analysts in July that the company’s cloud built on a Huawei infrastructure was “likely no longer relevant”.

    “Clearly today, the Huawei Cloud infrastructure is not necessarily the one we’re going to be promoting in Europe,” he said. Orange’s Huawei-built cloud is currently used by the European Space Agency and car marker PSA. Just days before Richard’s call with analysts, Orange signed a cloud deal with Google.

    Deutsche Telekom declined to comment on its CEO’s meeting with Krach and its cloud-business plans. The company, whose biggest sales come from its T-Mobile unit in the US, has cloud partnerships with Cisco, Microsoft, OVH and Amazon’s AWS. It also has an offer based on Huawei infrastructure called “Open Telekom Cloud” for small and medium-sized companies.

    Their handset sales continue to do well, but in infrastructure they are being squeezed out of the developed world

    While Huawei is struggling, US companies are thriving. Nokia on Wednesday signed a five-year deal to move its IT infrastructure onto Google Cloud. The US provider also recently won a multiyear deal to store Renault’s manufacturing data, marking the US tech company’s first major industrial cloud deal in France.

    “Huawei is losing market share in Europe,” said Jim Lewis, director of technology policy programme at the Center for Strategic and International Studies in Washington, DC. “I think its brand has been damaged. Their handset sales continue to do well, but in infrastructure they are being squeezed out of the developed world.”

    Far from defeated

    US sanctions have already jeopardised Huawei’s supply chain. A US ban in chip sales to Huawei kicked in on 15 September, disrupting its wireless, handset and cloud offerings. In 5G, the UK has imposed a full ban, while France has devised rules making it riskier for operators to use Huawei equipment, without banning it outright.

    Telefonica, which retracted plans to use mainly Huawei for its 5G, sells a cloud offer with the Shenzen company in Spain, Brazil, Argentina and Chile. It also has partnerships with Google, SAP and Microsoft. Krach cited Telefonica as one of the 50 telecoms operators committed to the US’s “clean network” plan.

    Huawei is far from defeated in Europe. On a rainy day last week, it opened a 743sq m research centre in an upscale Paris neighbourhood. Local telecoms champion Orange said it will selectively keep parts of Huawei’s infrastructure in its offerings.

    But for now, the US is maintaining pressure on its European counterparts.

    “All these companies that have cloud businesses and data centres that use Huawei, they understand that in terms of 5G, sophisticated smartphones and their servers, they are going to be out of chips,” Krach said after his eight-country European tour.  — Reported by Helene Fouquet, (c) 2020 Bloomberg LP



    Alibaba Amazon Amazon Web Services AWS Deutsche Telekom Google Huawei Orange Stephane Richard Telefonica Tencent top
    Subscribe to TechCentral Subscribe to TechCentral
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email Copy Link
    Previous ArticleStandard Bank ramps up IT spending to fend off fintech rivals
    Next Article Crypto M&A surges past 2019 total

    Related Posts

    Stolen phone? Samsung now buys you an hour to lock it down

    18 June 2025

    Major rift opens between Microsoft and OpenAI

    17 June 2025

    Meta bets $72-billion on AI – and investors love it

    17 June 2025
    Company News

    Why parents choose CambriLearn for online education

    19 June 2025

    Disrupt first, ask questions later – the uncomfortable truth about incident response

    18 June 2025

    Sage brings together HR leaders to explore the future of payroll and people management

    18 June 2025
    Opinion

    South Africa pioneered drone laws a decade ago – now it must catch up

    17 June 2025

    AI and the future of ICT distribution

    16 June 2025

    Singapore soared – why can’t we? Lessons South Africa refuses to learn

    13 June 2025

    Subscribe to Updates

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    © 2009 - 2025 NewsCentral Media

    Type above and press Enter to search. Press Esc to cancel.