Huawei announces for the first time that its Strategic Research Institute has entered the Innovation Pilot 2.0 era

"Hello, intelligent world".

This is the 16th Huawei Global Analyst Conference. Each conference is a concentrated reflection of Huawei's strategic thinking at the group level. The rotating chairman system with a cycle of half a year allows Huawei's three vice chairmen to take turns to appear. This time it is Hu Houkun's turn, and he used the above words as his opening remarks.

"2018 was a fruitful year for us. Huawei's business grew significantly and its technological innovation made great progress. Of course, we also encountered some challenges. We are actively addressing these challenges while focusing more on long-term development," said Hu Houkun. "The intelligent world is coming faster than we imagined and is already within reach. "

Over the past three decades, Huawei started from a residential building in Nanyou New Village and grew from a private enterprise to a global giant. In 2018, Huawei achieved sales revenue of RMB 721.2 billion, a year-on-year increase of 19.5%, and is expected to continue to grow steadily in 2019. Facing the intelligent world, what will Huawei rely on to achieve future growth?

There are thousands of factors that contribute to a company's success. Huawei answered this question with "innovation" from the perspective of hundreds of analysts in the audience. Xu Wenwei, director of Huawei and dean of the Strategic Research Institute, announced at the conference that Huawei is moving towards the Innovation 2.0 era based on vision-driven theoretical breakthroughs and basic technology inventions. As Xu Wenwei said, Huawei has reached the starting point of keeping pace with the world.

Leifeng.com learned that Huawei's vision was updated two years ago to "bring the digital world to everyone, every family, and every organization, and build an intelligent world where everything is connected." There are two key words in the vision-driven innovation 2.0 era: one is theoretical breakthrough, and the other is basic technology invention.

This means that Huawei is facing its own singularity, an undefined future.

Huawei first proposed the concept of the Strategic Research Institute. Xu Wenwei, President of Strategic Marketing, serves as the Dean of the Strategic Research Institute. Xu Wenwei's external title has also been unified into the latter. It can be seen that Huawei's Strategic Research Institute is basically derived from the Strategic Marketing Department, but there are also differences.

The Strategic Research Institute is a research institute responsible for cutting-edge technologies for more than five years. It uses $300 million in cooperative funds each year to support the academic community in conducting research in basic science, basic technology, and technological innovation. The Strategic Research Institute is an important part of Huawei's technology system, ensuring that Huawei does not lose its direction or miss opportunities in the next five years. At the same time, it creates technologies and business models that subvert the main channel and ensure Huawei's sustainable competitiveness in the main channel.

Huawei wants to subvert itself while ensuring its competitiveness in its main channel. It seems very contradictory. We may get the answer from Ren Zhengfei's words.

"What is the main channel? Everything in the world has a normal distribution. We only focus on the middle part of the normal distribution. We don't do anything else. Even if we say that a place is very profitable, we won't do it. We can't sell many. We just follow the main channel and the main flow. If there is traffic, there is a chance of winning. -- (Quote from Ren Zhengfei's speech and main discussion speech at the Sanya Terminal Strategy Retreat in 2012)

The idea of ​​the main channel has not changed. Huawei's focus on the main channel requires itself to do what it can and not do what it cannot, and to only enter areas with the highest added value. The same is true for the core of the Strategic Research Institute, which studies and explores future technologies around the entire process of information, from the generation, storage, calculation, transmission, presentation to the consumption of information.

Attending this analyst conference, Leifeng.com felt that Huawei is no longer obsessed with talking about its current leadership, but is more focused on future innovation. In fact, the latter is also the theme of this conference.

There has never been a shortage of famous companies at different stages of history, but very few of them can survive and develop well for dozens or even hundreds of years. If you want to avoid being subverted by others, you must first start by subverting yourself.

If we divide Huawei into two parts, one part is the present. Huawei's strategy focuses on connectivity, intelligence, and experience, which is the source of Huawei's cash flow and the pragmatic part of Huawei; the other part is Huawei's future. It does not generate income now and requires large and continuous investment, but perhaps one day it will become the cornerstone of the future digital society. This is the ideal part of Huawei.

Hu Houkun said that connectivity is the foundation of the intelligent world, and 5G is coming much faster than we thought. One year after the 4G standard was frozen, there were no mobile phone chips or mobile phones, only a 4G network. In the 5G era, for the first time in history, terminals and networks have achieved synchronous maturity. Currently, there are 4 5G chip providers, more than 40 5G commercial networks around the world, 100,000 base stations are being deployed, and 40 5G terminals will be commercially available on a large scale.

Huawei believes that with 5G, connectivity will become a platform, not just a pipeline. All things can be connected and all applications can be put on the cloud. At the same time, Huawei also predicts that it will only take three years for the number of 5G users to reach 500 million, compared to 10 years in the 3G era and 5 years in 4G. By 2025, 5G networks may cover 58% of the world's population and serve 2.8 billion users. Huawei has currently obtained 40 5G commercial contracts and shipped 70,000 base stations.

Artificial intelligence has left the bubble. Two years ago, many companies were still hesitant about whether to go to the cloud, but now they are discussing how to go to the cloud as soon as possible. AI is the core driver for companies to go to the cloud, because many companies have realized that AI can help them create huge value by using data on the cloud. Huawei predicts that by 2025, all companies will go to the cloud, 97% of large companies will use AI, and 77% of cloud applications will use AI. Obviously, AI will be the key to cloud competition.

To address the two industry pain points of expensive computing power and difficulty in application development, Huawei started with chips and launched the AI ​​chips Ascend 910 and Ascend 310, providing users with abundant and economical computing resources on Huawei Cloud. To address the challenge of difficult development, Huawei released ModelArts, a one-stop AI development platform.

The smart world requires a seamless experience. With the increasing number of smart terminals and applications, consumers are not completely satisfied with the current digital experience. For example, we have to switch between many smart terminals and applications, and the experience is very fragmented.

Huawei has launched HiAI, which will help terminals better perceive, understand and interact with consumers, both on the terminal side and in the cloud. On the hardware side, the HiLink platform connects all Huawei and partner terminals; on the software side, we will turn the functions of applications into smaller microservices. With the support of AI, all microservices will be provided to consumers on demand, which is the zero-search experience.

The above are all Huawei's pragmatic part. What is pragmatic? Huawei starts from economic benefits and builds a high-rise on the existing mathematical theory research. Huawei is a commercial company, which is its duty. However, at this analyst conference, Huawei clearly conveyed that it would do something beyond its duty.

Ren Zhengfei pointed out in 2017 that Huawei's current innovation is still at the engineering level of engineering mathematics and physical algorithms. Looking to the future, Huawei feels confused and lost. But it was not until today that Huawei officially announced that it has entered the innovation 2.0 era.

After more than 50 years of rapid development, the information industry has encountered development bottlenecks in both theory and industry. Theoretical bottlenecks, such as 5G, have almost reached the limit of Shannon's law, and engineering bottlenecks, such as Moore's law, have made it impossible for CPU performance to increase by 1.5 times every year due to process limitations.

The times call for cutting-edge science. For Huawei itself, the core concept of Innovation 1.0 is based on customer needs and challenges, and is technological innovation, engineering innovation, product and solution innovation, and innovation from 1 to N. The core is to help customers and partners enhance their competitiveness, help customers increase revenue or reduce costs, and help customers achieve business success.

The core concept of Innovation 2.0 is to break the theoretical and basic technology bottlenecks that restrict the development of ICT based on the assumptions and vision of the future intelligent society. It is an innovation that achieves theoretical breakthroughs and basic technology inventions, and it is an innovation that achieves innovation from 0 to 1.

Basic science is never a one-way street. The determination of each theory and the discovery of each law are achieved through continuous trial and error, and can only be achieved through the efforts of scientists. Leifeng.com learned at the scene that Huawei Strategic Research Institute will focus on three aspects:

• Basic scientific research: Huawei will set up a special fund to support basic scientific research and talent training, and promote breakthroughs in basic theories.

• Basic technology research: Huawei has a wealth of industry application scenarios. Universities and Huawei leverage their respective strengths to promote breakthroughs in basic technologies and accelerate the research results of universities to cross the innovation death valley in order to address engineering and technical problems and world-class challenges faced by the industry (such as the limit of Shannon's law, memory wall, and failure of Moore's law).

• Technological innovation: Jointly conduct research on the difficulties of current engineering and technology;

Huawei's connection with basic science will become closer. From 1 to N, Huawei has been doing this for many years and is very familiar with it. From 0 to 1, Huawei will enter a truly uncharted territory.

Opportunities and risks coexist. Huawei must be worried about whether hundreds of millions of dollars will be wasted, so it sees the future trend of technology as starting from five years. However, if Huawei is deeply involved in the maturity process of cutting-edge technology, it will also be one of the first to try out the technology, thereby continuing its lead for several years.

At the same time, Huawei also promotes technology to give back to society, which is very "cool". Huawei's digital inclusion action plan, Tech4ALL, is mainly carried out around three aspects: connectivity, applications and skills. The goal is to enable 500 million more people in the world to benefit from digital technology in the next five years, and ultimately achieve universal access to science and technology. One of the projects is rainforest protection. Huawei Tropical Rainforest Protection Charity Organization uses AI, cloud and mobile phones to protect Costa Rica's tropical rainforests and rare animals such as spider monkeys.

Since we are already lost, let's start navigating ourselves!

At the end of Xu Wenwei's speech, he concluded with the following words: Huawei, this big ship, will continue to explore the unknown new world and sail to areas that have never been reached before.

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