Global Courant 2023-04-25 10:07:05
Chinese tech giant Huawei has announced the release of its proprietary Enterprise Resource Planning (ERP) software, ending its reliance on US-based Oracle and taking another step away from vulnerability to US sanctions.
On April 20, Huawei announced that it had “replaced the old ERP system” with its own MetaERP system “over which it has full control”. The legacy system was supplied by the American software company Oracle.
Oracle defines ERP as “a type of software that organizations use to manage day-to-day business activities, such as accounting, procurement, project management, risk management and compliance, and supply chain operations.”
It says, “A complete ERP suite also includes enterprise performance management, software that helps plan, budget, forecast, and report an organization’s financial results.”
Huawei refers to ERP as “the most critical IT system for business management”. It was therefore critical when Oracle was forced to stop providing software upgrades and technical services to Huawei after the US Department of Commerce’s Bureau of Industry and Security added Huawei to its entity list in May 2019.
Tao Jingwen, president of Huawei’s Quality, Business Process & IT Management Department, said: “More than three years ago, we were cut off from our legacy ERP system and other core operations and management systems. Since then we have not only been able to build our own MetaERP, but also manage the switch and prove its capabilities. Today we can proudly announce that we have broken through the blockade. We survived!”
Huawei’s announcement included this statement: “Today, Huawei hosted the MetaERP Award Ceremony to recognize the individuals and teams who have made critical contributions to this project. The event titled ‘Heroes Fighting to Cross the Dadu River’ was held at the company’s Xi Liu Bei Po Village Campus in Dongguan, China.”
Huawei has a new homegrown ERP system. Image: Twitter
In addition to thousands of its own employees, Chinese partner companies, including Qi An Xin Technology, Kingdee International Software and Kingsoft, have contributed to the project.
Qi An Jin is one of China’s largest cybersecurity companies. Kingdee is one of China’s major ERP software suppliers. Kingsoft provides office, security and other software and cloud computing services.
In 1935, the Red Army of the Chinese Communist Party defeated Nationalist forces at the Battle of Luding Bridge, crossing the Dadu River in western Sichuan on the Long March.
In the words of Tao Jingwen, “Not having access to ERP became Huawei’s ‘Dadu River’ blocking our way forward and threatening our survival.”
According to Huawei: “The legacy ERP system has been the core system supporting Huawei’s business and rapid development for more than 20 years. It supported Huawei’s efficient operations, which generate hundreds of billions of dollars every year, in more than 170 countries and regions around the world.”
In 2016, Huawei and Oracle agreed to deepen their collaboration using Huawei’s KunLun Mission Critical Server and Oracle’s database platform technologies.
In 2017, they announced a “Power IoT Ecosystem Partnership” in advanced metering infrastructure and smart grid software. After that, however, the relationship broke down.
In 2019, Oracle laid off about 900 of the 1,600 employees at its R&D center in China, most of them researchers, and Huawei announced its own database management software called GaussDB shortly after.
Then, with the start of the US government sanctions, Huawei decided to “develop a fully self-driven MetaERP system to replace the old ERP system.”
“MetaERP,” said Huawei, “currently handles 100% of Huawei’s business scenarios and 80% of its business volume. MetaERP has already passed the tests of monthly, quarterly and annual billing while ensuring zero errors, zero delays and zero accounting adjustments .”
China ERP
China’s commercial ERP market should grow about 15% this year to $2.2 billion, according to estimates by Chinese market research and consulting firm Tenba Group.
According to the Tenba Group, the global ERP market is expected to grow 11% to USD 55 billion, with China accounting for only 4% of the total. Given the size and complexity of China’s economy, China should continue to outgrow the global market for many years to come.
Two companies, SAP and Oracle, have more than half of the ERP business at major Chinese companies, according to Tenba, while the top seven vendors have nearly 90%. These companies are:
SAP (33%) – Germany Oracle (20%) – US Yonyou (14%) – China IBM (8%) – US Kingdee (6%) – China Talosoft (5%) – China Infor (3%) – US
Most Chinese small and medium-sized enterprises (SMEs) use domestic ERP providers, but SAP has about 15% and Oracle 6% of the market.
Manufacturing and communications industries are the largest users of ERP in China, followed by construction, utilities and transportation.
SAP has been in China for 30 years. It now has more than 6,500 employees, 100 official partners, 20,000 certified consultants and about 16,000 customers in the country.
In March, the president of SAP Greater China told China’s state news agency Xinhua that “Chinese companies are going fully digital, connected and environmentally friendly, opening up an opportunity for SAP in China.”
“As a German-founded multinational company, SAP’s business development in China has benefited from China’s profound reforms and opening up and rapid economic development,” he said. Indeed, the market share figures confirm this.
Huawei now has its own ERP software and SAP is the largest ERP software provider in China, with Oracle a distant second. That makes two goals of its own for the U.S. government — an outcome perhaps only to be expected when the government’s trade strategy prioritizes revenge over profit.
Follow this writer on Twitter: @ScottFo83517667
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