The Huawei Connect 2018 was held in Shanghai on October 10 to 12 and over 20,000 attendees from different countries were at this event. It was a fascinating week led by Huawei key leaders sharing their Artificial Intelligence (AI) strategy along with its vision of an AI powered intelligent world.  For this event, I was looking forward to seeing how Huawei is transforming itself from primarily a provider of IT hardware solutions, to a provider of full-stack cloud services and applications.

Given that my interest lies in the areas of compute, server network connectivity, and cloud data center infrastructure, here are my main takeaways from the event:

AI Chips: Huawei launched the Ascend 910 and Ascend 310 at Huawei Connect 2018, aimed at accelerating AI workloads. The Ascend 910 is designed for the core data center, whereas the Ascend 310 is suitable for low-power edge computing. Both chips are designed by Hisilicon, a company owned by Huawei.  The Ascend announcement is groundbreaking because this is a rare instance in which a manufacturer is able to launch a viable alternative to accelerated processors, such as the GPU from NVidia, or FPGA from Intel or Xilinx, for AI workloads. Google, through its huge engineering resources, have also deployed its own accelerated processor, called the TPU, in its data centers. However, Huawei claims that a cluster of Ascend 910 can even outperform a comparable pod of TPU3, by a factor of 2.5X in floating point operations. More importantly, this is the first time in which a Chinese manufacturer has developed a seemingly competitive accelerated processor, and is aligned with China’s long-term goal of becoming self-reliant in the IT hardware market.  I believe the inclusion of another silicon vendor for accelerated chip sets, especially a foreign one, will drive additional innovation and adoption for AI technologies.

Smart NIC: Huawei announced a Smart NIC with an ASIC, also powered by Hisilicon, for applications such as offloading TCP/IP from the CPU. Initially this Smart NIC will likely be deployed in Huawei’s own cloud servers, but could eventually be sold alongside Huawei’s compute and storage portfolio to Huawei’s enterprise customers.  The Smart NIC market started to heat up in 2018 with no fewer than six major network adapter vendors, such as Intel, Broadcom, Mellanox, announcing or qualifying new products.  Smart NIC deployment is currently still fragmented and limited only to several hyperscalers.  I question whether or not the benefits Smart NICs could outweigh its high price premium and power consumption, which are factors inhibiting more wide-spread deployment of Smart NICs in the data center. However, Huawei’s vertical integration efforts might justify the economics of deploying Smart NIC in its cloud data centers.

Cloud Infrastructure: Huawei has been ramping and advancing its infrastructure to better compete against other public cloud providers, such as Alibaba Cloud. Currently, Huawei operates data centers worldwide, and is in the process of developing state-of-art modular data centers with redundant availability zones, and to optimize utilization and improve efficiencies.  In terms of absolute scale, Huawei has a long ways to go before catching up to other hyperscalers in terms of capacity.  However, I believe that Huawei is in a strong position to grow its public cloud business given the company’s penetration in enterprise accounts, and the only vendor to have an integrated cloud platform, from accelerated processors, to a global network of cloud data centers.

While the adoption of AI technologies is still nascent, its growth has been explosive with numerous potential applications that could change our daily lives.  Smart NIC is another area in which I am closely tracking.  It remains to be seen whether or not Huawei’s internal development of its Smart NIC will pay off and drive a strong use case.  For the next Huawei Connect event, I am looking forward to advances in the development and deployment of Huawei’s own silicon solutions in the fabric of Huawei’s future generation of data centers.

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Baron Fung

Posted by Baron Fung on November 6, 2018

About Baron

Baron Fung joined Dell’Oro Group in 2017 and is responsible for the Server Network Connectivity, Cloud Data Center, Server and Storage Systems Market Research. Prior to joining Dell’Oro Group, he spent five years as Product Manager at Microlease, a global supplier of Test and Measurement solutions in the Wireless and Aerospace Defense markets.