Huawei's five major legions were established, why did you choose these five major industries

China Business Daily (trainee reporter Zhao Yiru) Huawei recently held the inaugural meeting of the legion, and established five major legions, including the coal mine corps, the smart highway corps, the customs and port corps, the smart photovoltaic corps, and the data center energy corps. This matter has aroused strong concern from the outside world, why did Huawei choose these five industries to set up a legion? Can the legion organization drive Huawei's performance to rebound?

The five legions were ready to go

Recently, the Huawei Voice community uploaded a video of "No Retreat is the Road to Victory - Inaugural Meeting of the Formation of the Legion". According to the video, on October 29, Huawei held the inaugural meeting of the legion in songshan lake park, and established five major legions, including the coal mine corps, the smart highway corps, the customs and port corps, the smart photovoltaic corps, and the data center energy corps. A number of Huawei executives, including founder Ren Zhengfei, attended.

In the video, Ren Zhengfei said: "Peace is fought, we must use hard struggle and heroic sacrifice to create a peaceful environment for the next 30 years, so that no one dares to bully us again, we are sacrificing our lives for ourselves, we are also laying down our lives for the country, the sun and the moon are the same light, the phoenix nirvana, everyone looks up to everyone, people will remember you, wait for the day when we drink celebratory wine together, listen to the thunder in the silent place." ”

It is reported that in April this year, Huawei established a coal mine corps; in October this year, Huawei issued an internal document to formally establish four major legions of customs and ports, smart highways, data center energy, and smart photovoltaics.

What is a Legion? Ren Zhengfei once said in an interview that the legion model was learned from Google, that is, to bring basic research scientists, technical experts, product experts, engineering experts, sales experts, delivery and service experts all together in one department to shorten the cycle of product progress.

Ma Jihua, a senior telecommunications industry analyst, told the China Business Daily reporter that this regiment is similar to the front army or military group formed in the war for specific campaign objectives, and is also similar to the "special class" often set up by the government, which is conducive to unified command and coordinated operations, has great independence, and will also stimulate the subjective initiative of relevant personnel.

"The formation of the legion can carry out in-depth customized research and development around the pain points of the industry, on the one hand, shortening the cycle of product development, on the other hand, expanding the depth of solving pain points and the breadth of solutions." One department faces it uniformly, avoiding the problem of internal kicking ball, as well as the problems of research and superficial satisfaction of customer needs. Zhang Lihua, an expert in R&D and innovation management consulting and author of "Huawei R&D", told China Business Daily reporter.

"'Concentrate superior forces to fight the war of annihilation', Huawei has gathered resources and forces from all aspects to make efforts in these areas, and these just complement Huawei's 5G, communication technology, intelligence, cloud computing and other capabilities." Xiang Ligang, a senior communications industry expert, told the China Business Daily reporter.

Why choose these five major industries

At the inaugural meeting of the legion, Huawei said that in the coal mine corps, it should "make pioneering contributions to the safety and efficiency of coal mines in China and even the world"; in the smart highway corps, it is necessary to "firmly seize the digital opportunity of 'construction, management, maintenance, transportation and service' in the highway industry"; in the customs and port corps, it is necessary to "deeply understand the needs of customers, to solve customer problems, to improve port operation efficiency, customs operation efficiency, and create value for customers"; in the smart photovoltaic corps, It is hoped that the legion will build its core capabilities to the extreme and become a true global king"; in the data center energy team, it must "be able to seize the opportunity to continue to move forward and lead the company to become a leader in the data center energy field".

Why did Huawei choose five major industries: coal mines, smart roads, customs and ports, smart photovoltaics, and data center energy to form a team?

Ren Zhengfei has said that coal mines may become a very important business growth point for Huawei. Through the combination of ICT technology and coal mining technology, Huawei can help the coal industry to carry out digital and intelligent transformation, realize a production model of "safe, fewer people and no one, and more efficient", and also allow coal miners to "wear suits and ties" in the future.

Ma Jihua said that Huawei has selected the five areas with the most market value and high matching of its own capabilities as breakthroughs in transformation and development, and most of them are related to new infrastructure, with large market value and strong demonstration effect, which is convenient for concentrating front-end and back-end resources to carry out integrated marketing, which is its consistent style of selling "wolf culture" for many years.

"If you want to cut into an industry, first of all, this industry is a big industry, and secondly, the industry's requirements for intelligence are relatively high and urgent, and it is necessary to build its own capabilities through intelligence, so this is a better commercial entry point for Huawei." In addition, Huawei's ability to face the industry and enterprises is relatively strong, and it will also look for entry points in these areas. Xiang Ligang said.

"Thirty years ago, when China's reform and opening up and the information industry were just opened, Huawei was a small exchange for agent users, and its main customers were unit users such as coal mines and ports. These industrial, mining, and transportation enterprises are just needed users of the information industry and have an urgent need for professional information technology. Nowadays, the needs of these private network users have shifted to 'unmanned', low-carbon, artificial intelligence, and 5G upgrades. In the mines alone, there are 5,300 in the country to be upgraded. This is a huge unmet demand, and the demand overseas is also very large. This is not only to find technology exports for Huawei itself, but also to seek a sales outlet for the entire Chinese information industry, driving the overall expenditure of the information industry. Zhang Lihua said.

Huawei has begun to deploy in these five major industries. In June this year, Huawei Digital Energy Technology Co., Ltd. was formally established with a registered capital of 3 billion yuan; in September this year, the National Energy Group and Huawei jointly released the "Minhong Operating System", which is the Internet of Things operating system launched by Hongmeng for the coal mining industry; in October this year, Huawei and Shandong Electric Power Construction Third Engineering Co., Ltd. successfully signed a contract with the Saudi Red Sea New City Energy Storage Project, which is the world's largest energy storage project to date.

Whether it can drive revenue

On October 29, Huawei's official website released its operating results for the first three quarters of this year, and the company achieved sales revenue of 455.8 billion yuan in the first three quarters of last year, down 32% compared with 671.3 billion yuan in the first three quarters of last year.

According to market research institute Counterpoint research data, Huawei ranked sixth in domestic mobile phone sales in the third quarter of this year, with a market share of 8%, a decrease of 77% compared with the same period last year, and a decrease of 18% compared with the second quarter of this year.

Can the formation of the five major legions save Huawei's declining revenue?

"Huawei's performance decline is mainly in the consumer business, these new areas will certainly make up for its performance, but whether it can be fully replenished, or how long it takes to make up, the answer is certainly not so optimistic." After all, the consumer business once accounted for more than half of Huawei's total revenue. Xiang Ligang said.

Ma Jihua said that Huawei's transformation and development is on the way, opening up new markets is conducive to increasing revenue, but these industry applications are not enough to make up for the loss of consumer business, mainly from economies of scale to scope economies, from to c (consumer-oriented) to to b (enterprise-oriented), fully realize resource sharing, knowledge reuse and multi-party collaboration.

In view of the operating results in the third quarter of this year, Guo Ping, rotating chairman of Huawei, said that the overall operating results are in line with expectations, the to c business has been greatly affected, the to b business performance is stable, and will continue to strengthen technological innovation, R & D investment and talent attraction, and constantly improve operational efficiency, and is confident that it can continue to create value for customers and society.