Ecological “Quanhai”: Changes in Supply and Demand in Digital Transformation

The representative of the Almanac School, the French historian Fernand Braudel may be the first scholar to introduce the concept of “ecology” into historical research on a large scale. In his famous book “Mediterranean Sea and the Mediterranean World in the Age of Philip II”, he proposed that the Mediterranean Sea is not just a sea area, but a “combination of seas”. There are dotted islands, peninsulas interspersed, and the surrounding coasts are endless, and the ecology of the ocean and the Eurasian continent is intertwined. The sea effect allows each island and coast of the Mediterranean to breed different resources, products and cultures. These supplies meet the rich trade, technology, and cultural needs of the Mediterranean ecology, and in turn stimulate production in the opposite direction.

The Mediterranean ecology is the balance of supply and demand between civilizations, the product of constant debugging, conflict and balance. This vigorous and rapid matching of supply and demand has built a breeding ground for the creativity of human civilization.

When the digital transformation of enterprises comes to 2021, everyone will agree that this industrial field is extremely important and is related to the foundation of the country; at the same time, another consensus is that digital transformation has entered a deep-water area, with high technical thresholds and complex and diverse needs. Under this situation, the one-dimensional ecology dominated by channels and agents in the ICT industry of traditional enterprises, like a calm but monotonous sea, has increasingly exposed its lag.

The author believes that the new digital ecology should be a kind of sea ecology: every industry island can be deeply cultivated, every technical ocean current can be flexibly used, and merchant ships can pass through even the smallest sea area.

In the process of digitalization, ecological upgrading has become a demand that keeps pace with technological and industrial changes. In the face of the big era, how specific industry participants should adjust themselves and achieve breakthroughs has become a “must-answer” at the beginning of a new industrial cycle.

On May 17th, the “Huawei China Ecological Conference 2021” with the theme of “Being Together and Prosperity” opened at the Shenzhen Convention and Exhibition Center. As we said before, this year marks the tenth year that Huawei and the ecosystem have been working together. At the same time, it coincides with the fact that digital transformation has reached a high demand point for the entire industry chain after the epidemic; technologies such as connectivity, AI, and cloud computing are synergistically mature. This year’s Huawei China Ecological Conference is obviously particularly important.

Under the watchful eyes of both inside and outside the industry, Huawei, together with nearly 20,000 ecological partners, has brought the latest answer to how the enterprise ICT service ecosystem will go to the “sea of ​​crowds” – Huawei believes that the core is to build a new “digital transformation” feature. Supply and demand”.

Let us start from this change in supply and demand to talk about what Huawei has said to its partners, the industry, and the future on the stage of the Ecological Conference for ten years.

When the Big Wave Comes: Digital Transformation Is Nearly Qualitative

Living in China in 2021, I believe that most people can feel the convenience brought by digital technology and the “super speed” of the development of the digital industry. Today, the digital economy and the digital transformation of enterprises have ushered in a comprehensive acceleration and demand expansion due to the maturity of technology synergy, the pressure of the global industrial chain, and the objective acceleration in the post-epidemic period.

Whether it is from data or case observation, it can be found that in today’s digital transformation industry, the core trend is high demand. However, the traditional channel and product-centric supply cannot be adapted to it.

For example, we interviewed such a case not long ago. A manufacturing enterprise originally only had an ERP system to go to the cloud, but it urgently opened a video conference system to go to the cloud during the epidemic. Immediately afterwards, he hoped to deploy AI systems, end-side industrial control systems and industrial AR equipment in the enterprise. These demands are generated very rapidly, and the just-deployed enterprise IT systems and communication systems will be updated soon. Although this high-speed digital iteration has generated strong market demand, it has brought a series of challenges to suppliers.

Another example is some large-scale projects such as smart cities, smart airports, and industrial Internet. Customers often formulate their needs based on development goals. However, if it is divided into specific digital modules, it will present an extremely complex and diverse situation, requiring a large number of products and solutions to coordinate with many enterprises, and including long-term service projects such as consulting, operation, and redevelopment. Similar projects have exceeded the capabilities of the previous enterprise ICT ecosystem, forming a new situation, integration, and large-scale requirements that test top-level design capabilities.

This situation where demand exceeds supply and demand is difficult to supply has become the core challenge of the digital industry.

During the 14th Five-Year Plan, China hopes that the scale of the digital economy will become the largest in the world. However, at the current stage, the GDP contributed by China’s digital economy is still slightly lower than the global average. According to relevant data, only about 9% of enterprises’ digital transformation projects can be successful, and 70% of enterprises’ digital transformation failed to meet expectations. From cases to data, we can see the shortage of supply-side capabilities in the enterprise ICT ecosystem.

In this case, when the market demand is already in place and the underlying technology is fully prepared, the rest is to increase the supply of the intermediate industry ecology. And the leading ecological enterprises must undertake this task at this stage and take the lead in promoting the capacity upgrade of the supply side.

In China’s government and enterprise ICT services, the ecology and value advocated by Huawei need not be repeated. In 2020, Huawei’s enterprise business achieved revenue of 100.3 billion yuan, a year-on-year increase of 23%. Among them, Huawei’s Chinese government and enterprise business has exceeded 10 billion US dollars in sales, and its business revenue in digital government, scenario-based solutions, and data communication products has exceeded 10 billion.

At the same time, it is well known that the ecological strategy is the foundation of Huawei’s foothold and the genes of its survival. The number of government-enterprise business ecological partners has reached 35,000 by the end of 2020, from more than 300 10 years ago. From technological advantages, market positions to industrial advantages, Huawei has the ability and obligation to promote the transformation of ecological supply and demand.

For digital transformation, if you don’t run, the times will run forward and customers will run out. Huawei, which is good at long-distance running, has given more pressure and motivation to ecological partners at this time. Of course, ecological participants have long been accustomed to this. More sweat and a bigger cake have been proven to be the underlying logic of this ecology in ten years.

At this year’s Ecological Conference, Huawei disassembled the insights that the new supply and demand relationship must adapt into specific executable strategies. So as to tell the ecological partners how to run better and what our common direction is.

The new supply-side ecology of the digital industry is called a capability-based ecology.

Convergence of Ocean Currents: The Revolution of Capable Ecology

The so-called ability-based ecology, as the name suggests, is an ecosystem that has the ability to adapt to new needs. For further strategic splitting, the capability-based ecosystem includes two directions: capability upgrades, partners that can adapt to new needs; and an ecosystem with a clear structure that can meet industrial development and unleash the capabilities of partners.

At this year’s Ecological Conference, Huawei’s rotating chairman Xu Zhijun proposed in his keynote speech a reform plan to build a “capable ecosystem” with partners. He said that in the face of the possible challenges of digital transformation, one is to change the existing partner system, and the other is to upgrade the digital technology ecosystem, in order to facilitate the healthy and rapid development of digitalization, and join hands with the ecosystem to win the future.

Specifically, Huawei’s ecological strategy, on the one hand, is to promote the upgrading of partners’ capabilities, build capability-based partnerships, and match new demand spaces; sharing, sharing and common development.

On the partner side, Huawei hopes to promote partners from focusing on channels and resources to focusing on capabilities and collaboration. Let partners with greater capabilities that can meet customer expectations grow first and get more feedback. For example:

For distribution partners, they should have a sales force that has sales capabilities and understand industry needs and customer pain points; for public cloud partners, they should have customer-oriented consulting capabilities, understand and meet customers’ long-term cloud requirements, and have Long-term management of cloud services and one-stop application hosting capabilities; for aggregate partners, they should have the ability to integrate ecological partners and technology clusters for large-scale customer needs to form scenario-based solutions.

Overall, Huawei expects capable partners who can understand customer needs, possess industry knowledge, and integrate ecological resources. Each partner exerts a specific ecological cycle effect on its own unique track, rather than just serving as a one-dimensional module or channel. At the same time, Huawei adheres to the strategy of being integrated, and only does case projects from 0 to 1, and 1 to 3, and the vast market of 3 or more is handed over to partners. Under the new supply and demand relationship, Huawei cannot meet the vast majority of market demands. Only when Huawei does a good job of the bottom layer and the ecological partners exert their own group effect can the supply and demand relationship be adapted.

On the ecological side, Huawei expects to continue to upgrade the digital technology ecosystem, open up the most cutting-edge, basic, and underlying technical capabilities to partners and developers in an ecological way, to achieve the black-field effect in digital transformation. Specifically in the field of government and enterprise ICT, in the three core ecosystems of cloud, AI, and computing, we can see that Huawei has achieved phased results.

In the field of computing, the progress of Kunpeng’s ecology has exceeded expectations, and it has been applied on a large scale in many industries of national economy and people’s livelihood; in the field of AI, Ascend’s hardware and software systems have been effectively recognized by the industry, and MindSpore has become the mainstream deep learning framework in China; in cloud computing In the field, HUAWEI CLOUD has become one of the five global clouds in the intelligent era, and an advanced domestic TOP2 public cloud service provider.

Overall, Huawei’s strategic framework is to consolidate the ecological foundation and comprehensively improve the construction of basic technologies and the degree of ecological empowerment for the digital reconstruction of supply and demand. While accurately delivering these capabilities to partners, we will promote the upgrade of partner capabilities, build an ocean current cycle between ecological capabilities and partner capabilities, stimulate each other, and forge ahead.

The feature of a capability-based ecosystem is that partners can independently meet industry-specific and uncertain needs. Its positioning is no longer a transmission of the industrial chain, but an independent and complete comprehensive capability centered on the industry, service capability, market location, and even its own enterprise.

When there are enough such ecological partners, the cloud, AI, computing and other ecosystems have the characteristics of industry standardization and industrial inclusiveness, and the crowd effect of digital transformation will really start.

Create a sea: “2+4+1” to build a new supply and demand relationship

If it is said that the reconstruction of supply and demand relationship is the background, and the ability-based ecology is the strategy, then Huawei needs to disassemble this change in supply and demand to form specific tactical measures, so that ecological partners can understand how to adapt and meet the future. industry demand.

Wu Hui, President of Huawei China’s Government and Enterprise Business, said in his speech “Possible and Prosperous Because of Gathering”: In the next 10 years, as the transformation of the social development model continues to release huge productivity, the value space of industry digital transformation will be extremely broad. In the face of a future where opportunities and challenges coexist, Huawei and its ecological partners must jointly build a supply-demand relationship with characteristics of digital transformation, achieve “two focuses, four changes”, and adhere to “one keynote”.

“2+4+1” can be understood as Huawei’s final promotion plan after removing the necessity of ecological upgrade layer by layer. Returning to the demand side, we can find that industry specificity, market penetration, and ecological integration are the three main upgrade directions for current digital transformation needs. To this end, Huawei hopes to work with partners to make a series of executable and predictable capability adjustments on the supply side to meet changes in demand.

The first is “2 Focus”.

Since industry needs are changing, and a wide range of markets in prefectures, cities and counties are opening up, Huawei and its partners must focus on two dimensions of development. One is to precipitate digital transformation scenarios based on industry characteristics to meet the special needs of the industry; the other is to promote market coverage Intensify efforts to increase market penetration in prefectures, cities and counties.

Therefore, Huawei hopes to work with its partners to first focus on deepening and penetrating the industry, exploring and forming various standards for thousands of industries and thousands of scenarios in the digital space; In the “Field of Hope”, we will be the helper of our partners, so as to stimulate the satisfaction of the two core growth points of supply-side industry characteristics and market breadth.

Then “4 changes”.

Faced with the complexities of the new demands of digital transformation and the difficulty of solidifying capabilities, Huawei hopes that the supply side can strengthen its response capabilities, and at the same time strengthen capabilities such as operations, consulting, and talents, and comprehensively strengthen the capabilities of partners. Specifically, four changes address supply-side changes in different directions:

1. Deterministic offers to deal with uncertain needs: abstract “digital transformation” into five types of deterministic offers, such as infrastructure, scenario-based, cloud, digital architecture, and business transformation, and meet various types of offers through deterministic and rich offers. The diverse needs of transforming customers.

2. Respond to the long-term transformation needs of customers with continuous operation and delivery capabilities: promote the construction of delivery and operation capabilities and program iteration, and support the rolling development of digital transformation needs and the continuous growth of the ecosystem.

3. Evaluate the grading system based on partner ability to cope with the ambiguity of ability: through a standard and transparent evaluation system, give a clear direction to the development of partner ability, and promote the transformation from a transactional partnership system to a capability-based partnership system.

4. To cope with the long-term development of partners’ capabilities through continuous talent development: Huawei hopes to help partners get through the transformation process of “knowledge-skill-capacity” through a series of talent development measures, and increase resources investment in ICT training in colleges and universities. Provide ample talent supply.

These four changes, with the logic of detail, persistence, standardization, and strong empowerment, have promoted the strengthening and transformation of channel partners into capable partners. At this strategic point, Huawei does not shy away from the fact that its partners need to grow, and at the same time, it does not shirk the responsibility for growth, and adheres to the reform logic of common growth and common development.

Finally, “1 tone”.

After seeing so much focus and adjustment, some people may think that Huawei’s ecology has changed a lot, and the iterations are very obvious. But in fact, all changes are under the unified goal of sticking to the core value of “customer-centric”. As long as this tone remains the same, all changes will be organized, organized, and orderly.

Perhaps it can be said that “2+4+1” integrates detailed ecological cooperation plan adjustment, clear strategic direction determination, and consistent cultural heritage. How to upgrade the new supply and demand relationship in an orderly manner, what can be changed, and what remains unchanged, giving ecological partners a detailed action guideline.

Improving capabilities as soon as possible to meet the strong and challenging industrial needs is the core path for Huawei to promote ecological development and the ecological upgrade of the ICT industry. Everyone is accelerating on their own track while running in a clear and consistent direction. The combined force is the greatest force, the force that can push China’s digitalization to unimaginable places.

At this year’s Ecological Conference, Huawei said that over the past three decades, Huawei and operators have worked together to build China’s fixed and mobile networks into a global leader. In the next ten years, Huawei hopes to work with partners to make China a global leader in digitalization.

We hear this goal today, and it seems to be inconceivable. But all the miracles of the market and technology in the history of human science and technology are the feats that the supply and demand relationship is gradually debugged and forced against each other, and finally completed.

In the face of huge opportunities and the continuous growth of the digital ecosystem, the era of intelligence will be a sure future. If it is said that the Mediterranean Sea once nurtured the classical era of human beings; then China’s digital sea may be the best breeding ground for the intelligent era.

No outside wind can dry a sea.


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