Whale Cloud: ZTEsoft’s Rebrand Makes a Whale of a Marketing Difference

Ron Westfall – Research Director, Global Technology Telecom and Software

Summary Bullets:

  • Whale Cloud formally debuted its new brand name as the telco software unit of parent company Alibaba, expanding its cloud portfolio range and market ambitions.
  • As Whale Cloud sheds its ZTEsoft identity and prior affiliation with ZTE, it must further clarify its portfolio in relation to Alibaba Cloud’s offering and put more emphasis on 5G capabilities.

In August 2018, Whale Cloud formally unveiled its new brand name and portfolio as the telco software unit of parent company Alibaba and a key partner in Alibaba Cloud’s software service ecosystem, shedding its ZTEsoft identity. (A follow-up official announcement and press release is expected in September 2018.) Whale Cloud’s rebranding follows on Alibaba’s acquisition of ZTE’s stake in ZTEsoft for $190.6 million in February 2018. With the new brand, Whale Cloud strengthens its identity as an integral unit of Alibaba, further distancing the company from the ZTEsoft namesake and historical affiliation with prior parent company ZTE after a three-month shutdown for not complying with terms of a settlement reached with the U.S. government in March 2017. ZTE’s struggles created public relations fallout for the ZTEsoft namesake, fair or not, despite the fact that ZTEsoft’s separation from ZTE Corporation was already well underway.

Whale Cloud is now a more formidable competitor combining its ZSmart digital business OSS, BSS, and analytics offerings (Whale Cloud is retaining the ZSmart labeling) with Alibaba Cloud’s cloud, AI, IoT, and vertical assets. The new integrated portfolio enables Whale Cloud to target a broader range of emerging operator requirements including digital transformation, IT transformation, cloud transformation, and cloud service operations.

Whale Cloud now has several items on its ‘to-do’ list to capitalize on its new brand name and ensure long-term differentiation and competitive success.

  • Clarify Portfolio: Whale Cloud is off to a good start in showing how the combination of the ZTEsoft-originated products and Alibaba Cloud’s global cloud assets creates a long-term contender in the telco software market, especially telco cloud applications. However, the retention of the ZSmart label for the OSS, BSS, and analytics products is not consistently applied, causing confusion over how the overall Whale Cloud portfolio is organized. Whale Cloud must consistently apply and align the ZSmart labeling during its launch process in order to minimize market confusion and prevent an opening for rivals to layer on more confusion about the Whale Cloud portfolio set.
  • Sharpen 5G Message: Whale Cloud must devote specific marketing toward the 5G capabilities that are distributed throughout its portfolio but not specifically broken out by Whale Cloud. It must prioritize 5G portfolio development and marketing to counter the 5G-driven initiatives of major rivals Huawei, Nokia, and Ericsson and assure operators 5G is an integral component of the Whale Cloud corporate strategy and vision.
  • Make New Friends While Keeping the Old: As the bulk of Whale Cloud’s current business is still ZTE customers, developing and upgrading that installed base will still be vital for long-term success. At the same time, Whale Cloud needs to build out Alibaba Cloud internationally if it really wants to take its solutions and market vision beyond China. Maintaining ZTE cooperation and support is key to diversifying geographic channels.

Whale Cloud’s brand name debut enables a fresh start for the company and provides the crucial go-to-market strategy and portfolio integration updates related to parent company Alibaba. The Whale Cloud namesake indicates the essential role cloud will play in telco digital transformation as operators speed up their adoption of cloud platforms for enabling digital transformation and 5G readiness. The Whale Cloud/Alibaba Cloud portfolio intensifies competition for telco cloud business, expanding operator choices on a broader, global scale.

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