Why Huawei Cloud Wants to Be the ‘Black Soil’ for China’s Software Industry

Today, Huawei rotating chairman Xu Zhijun attended the 22nd China International Software Expo summit and delivered a speech titled “Creating the Black Soil for China’s Software Industry Development.” The Expo, China’s longest‑running software industry event, this year’s theme is “New Era, New Concepts, New Software.”

Xu stated that although China’s software industry appears to be growing rapidly, it lacks successful global software enterprises. Huawei believes SaaS is the inevitable path for the industry’s development, and the earlier companies shift to a cloud‑service business model, the more likely they will win future competition and become global leaders.

Huawei Cloud, as a neutral cloud service provider, adheres to a “three‑no” policy – no touching applications, no touching data, and no equity investment – aiming to become the “black soil” where software companies can develop and operate their solutions on a cloud‑service model.

He highlighted that China’s software revenue in 2017 exceeded 5.5 trillion RMB, accounting for 6.65 % of GDP, with a growth rate of 13.9 %, double the GDP growth, yet Chinese firms still lack global leadership in software products, services, and mixed models.

Analyzing the software market, Xu categorized software into three types: embedded software, pure/general software (licensed or SaaS), and internet‑based post‑sale models. He noted that foreign giants like Oracle, SAP, and PTC derive about half of their revenue from annual software fees, whereas Chinese firms earn less than 20 % from such fees.

The key obstacles identified are: domestic customers’ reluctance to accept license‑plus‑annual‑fee models; the dominance of custom‑development models; small‑shop development practices; and the lack of foundational software such as operating systems and databases.

Huawei’s own experience mirrors these challenges, often equating software sales with hardware sales, leading to inefficient large‑scale custom projects.

Xu emphasized that transitioning to SaaS and cloud‑based subscription models can overcome the resistance to software fees, urging the industry, government, and customers to shift from purchasing software to purchasing services.

To enable this shift, Huawei proposes a unified platform offering IaaS, GPaaS, AI APIs (Enterprise Intelligence), and HiAI SDK for mobile AI, supporting developers and software companies to focus on application development rather than infrastructure.

Huawei Cloud’s extensive nationwide IaaS, combined with a one‑stop development toolchain covering project management, configuration, code analysis, build, test, deployment, and release, already serves over 90,000 developers.

By integrating AI services and a consistent public‑private‑government cloud architecture, Huawei aims to provide a flexible, scalable environment that allows software firms to deploy globally while maintaining data security and neutrality.

Ultimately, Xu concluded that if China’s software industry embraces SaaS and cloud services, it can open new markets, foster global‑scale enterprises, and achieve the “black soil” vision for sustainable growth.