Huawei to build new company with 700 million yuan to strengthen information security, big data AI and other software businesses

Recently, Super Fusion Technology Co., Ltd. (hereinafter referred to as "Super Fusion"), which is wholly owned by Huawei Technologies Co., Ltd., was registered and established. According to Jiwei.com, in the context of Huawei's increase in the proportion of software business revenue, the establishment of Super Fusion may mean the strengthening of its information security, big data, artificial intelligence and other businesses in the fields of enterprises and industries.

The registration place of the super fusion company is Suzhou Industrial Park. It is understood that as early as 2012, Huawei invested in the establishment of Huawei Digital Technology (Suzhou) Co., Ltd. in the park, positioning it as the headquarters of Huawei's domestic enterprise business. In August 2019, the Suzhou Municipal Government and Huawei signed a deepening strategic cooperation agreement. Suzhou Industrial Park will jointly build the Huawei (Suzhou) Artificial Intelligence Innovation Center with Huawei.

Therefore, the establishment of Super Fusion in Suzhou will help Huawei to form synergy in information security, big data, artificial intelligence and other businesses.

Industrial and commercial information shows that the legal representative, executive director and general manager of Chao Fusion is Zheng Liying. According to Jiwei.com, Zheng Liying previously served as the director of the transaction execution department of Huawei's corporate development department. Her department was deeply involved in the establishment and acquisition of Huawei Symantec. Another key person in the company is Li Jinge, a veteran in Huawei's sales.

Independent information security business may be restarted 

Industrial and commercial information shows that on July 8, Super Fusion Technology Co., Ltd. was established with a registered capital of 727 million yuan. Its business scope includes information security equipment manufacturing, artificial intelligence basic resources and technology platforms, big data services, software development, integrated circuit design, etc. Shareholder information shows that the company is currently wholly owned by Huawei Technologies Co., Ltd.

In the opinion of an industry insider, the establishment of the Hyper Fusion Company means that Huawei will strengthen its information security-related business.

More than ten years ago, Huawei made efforts in the security business.

In 2008, Huawei and Symantec established a joint venture in Hong Kong, Huawei Symantec (hereinafter referred to as Huawei Symantec), to provide customers with innovative security, storage and system management solutions. Due to operating losses, in 2011, Huawei announced that it would acquire Symantec's 49% stake in Huawei Symantec for US$530 million. After the transaction is completed, Huawei will hold 100% of Huawei Symantec's shares.

However, according to the above-mentioned industry insiders, after Huawei took back Symantec's shares, there were many internal opinions on how to carry out the business, whether to integrate it into the company's large platform or operate it independently. In the end, the storage product line was merged into the enterprise business IT product line, and the security product line was merged into the enterprise business data communication product line.

"Establishing an independent company now means restarting the independent security business. The independent company will have a more flexible mechanism, can operate in a more market-oriented manner, and may also seek to go public in the future," said the above-mentioned industry insider.

The person also pointed out that security-related products have very strong software features and may include some security chip forms, but their essence still exists in the form of software.

The above-mentioned person said that Huawei has business intelligence (BI) business for the operator market, as well as big data software platforms, which have some applications in industries such as finance. It has also accumulated a lot of experience in artificial intelligence, such as the launch of the full-scenario AI computing framework MindSpore and the enterprise-level AI application developer kit ModelArts Pro.

"If the software platform can be independent, it means that these business capabilities will be able to be better expanded into the government, industry and enterprise markets," the person said.

Increase the proportion of software business revenue

Since the US crackdown, Huawei's business has been greatly affected. At the Huawei Global Analyst Conference held in April this year, Huawei's Vice Chairman and Rotating Chairman Xu Zhijun admitted in an interview with Jiwei.com and other media that in the past two years, Huawei's main focus has been on dealing with sanctions, and there has not been much time to think about whether it can really survive in the future. Now, after a long period of inventory and business adjustments, it is found that there is hope to survive, but we still have to strive to live a better life.

In 2021, Huawei plans to optimize its industry portfolio, with 5G, full scenarios, energy, and supply becoming the five key initiatives that will continue to be Huawei's strategic focus, with enhancing industry "resilience" becoming the primary goal.

An important aspect of this is to strengthen software and investment in industries weakly related to advanced processes, tap into new revenue growth points, and offset the impact of weakened competitiveness caused by the constraints on the capabilities of underlying advanced hardware platforms.

Huawei founder Ren Zhengfei has emphasized the importance of software on many occasions in recent years. At the end of 2018, Huawei's board of directors passed a decision to invest $2 billion to improve software engineering capabilities. According to Xu Zhijun, Huawei's overall software engineering capabilities have achieved gratifying results over the past two years. For this reason, Huawei hopes to further use the improvement of software capabilities to reduce demand and dependence on chips and enhance product competitiveness.

It should be pointed out that Huawei's strengthening of software investment and improvement of software capabilities does not mean abandoning the "softwareization" of hardware. Instead, it means that under the current constraints on the competitiveness of chip hardware platforms, the software side will drive the coordination of software and hardware to improve the efficiency of hardware use.

"Huawei will continue to invest in software and elevate the company's software engineering capabilities to a higher level within a five-year period," said Xu Zhijun.

In addition, Xu Zhijun said that Huawei will also pay attention to more opportunities in the software industry. Once such opportunities are found, it will increase investment and increase the proportion of revenue from software and services.

The cybersecurity sector has reached its daily limit

The news that Huawei established a hyperfusion company appeared today, coinciding with the release of the "Three-Year Action Plan for High-Quality Development of the Cybersecurity Industry (2021-2023) (Draft for Comments)" (hereinafter referred to as the "Draft for Comments") on the official website of the Ministry of Industry and Information Technology, and publicly solicited opinions and suggestions from the society.

The draft for comments shows that the development goal of the three-year development action plan is to significantly improve the innovation capabilities of cybersecurity technology by 2023, continuously improve the levels of products and services, accelerate the release of economic and social cybersecurity needs, achieve precise and efficient industrial and financial cooperation, grow the cybersecurity talent pool, continuously enhance the basic capabilities and comprehensive strength of the industry, further optimize the industrial structure layout, and ensure a healthy and orderly industrial development ecosystem.

The goals in the draft for comments include: In terms of industrial scale, the scale of the cybersecurity industry exceeds 250 billion yuan, with an annual compound growth rate of more than 15%. In terms of technological innovation, a number of key core technologies in cybersecurity have achieved breakthroughs and reached advanced levels. The integration and innovation of emerging technologies and cybersecurity has been significantly accelerated, and the innovation capabilities of cybersecurity products and services have been further enhanced; in terms of enterprise development, a number of leading enterprises with obvious advantages in quality, brand, and operating efficiency and the ability to lead the cybersecurity ecosystem have been initially formed, and a group of "specialized, specialized, and innovative" small and medium-sized enterprises facing new tracks such as the Internet of Vehicles, Industrial Internet, Internet of Things, and Smart Cities have grown rapidly, and the number of single champions in cybersecurity products, services, and solutions has gradually increased; in terms of demand release, the proportion of cybersecurity investment in key industries such as telecommunications to informatization investment has reached 10%. Security applications in key industries have been accelerated across the board, the cybersecurity capabilities of small and medium-sized enterprises have been significantly improved, and the level of cybersecurity protection for key industry infrastructure has been continuously improved.

Influenced by the news, the network security sector rose sharply on the morning of the 12th. Zhaori Technology and Renzixing rose by 20% and hit the daily limit. Qi'anxin once rose by more than 14%, and its share price hit a 4-month high. Deep Technology, Green Alliance Technology, Meiya Pico, Blue Shield Co., Ltd. and others all rose by more than 10%, 360 rose by more than 5%, Baosight Software and Inspur Information rose by more than 3%.