Chinese tech giant Huawei has won a significant contract with United Bank for Africa (UBA), one of Nigeria’s largest banks. The deal, worth an estimated $3 million, involves providing 200 petabytes of storage and cloud solutions to UBA. This marks another success for Huawei as it continues to make inroads into Nigeria’s banking sector.
Traditionally, major Nigerian banks have relied heavily on IBM for their storage needs. However, a growing push to reduce costs, especially those in US dollars, has led banks to explore alternatives. Huawei has capitalized on this opportunity, offering competitive pricing and attractive deals to win over clients.
UBA’s decision to partner with Huawei comes as the bank faced the need to expand its storage capacity for its over 30 million retail and corporate customers. Previously, UBA used IBM for storage and VMWare for virtualization. However, recent changes in VMWare’s pricing model following its acquisition by Broadcom led to significantly higher costs, prompting UBA to seek more affordable options.
Huawei’s strategy includes offering free one-year proof-of-concept trials, allowing banks to test their solutions without immediate financial commitment. This approach has proven effective in attracting potential clients.
The deal with UBA is not Huawei’s first in Nigeria’s banking sector. In 2023, the company secured a contract with Zenith Bank and has also done business with other financial institutions such as Fidelity Bank, First Bank, and Opay.
Despite Huawei’s growing presence, some concerns remain among Nigerian banks regarding data security and privacy. As a result, many banks continue to use IBM for critical workloads while exploring Huawei’s offerings for other needs.
Huawei’s expansion into Nigeria’s banking sector mirrors its success in the country’s telecommunications industry. The company aims to become a one-stop shop for banks, telecom companies, and other large organizations in Nigeria.
Looking ahead, Huawei is reportedly in talks with at least one other major Nigerian bank to provide cloud storage services. The company’s strategy appears to be focused on gradual expansion and market dominance in the long term.
This development highlights the changing landscape of enterprise technology in Nigeria’s banking sector. As banks seek to optimize costs and improve efficiency, they are becoming more open to exploring alternatives to traditional providers. Huawei’s competitive pricing and willingness to offer extended trials are proving attractive in this environment.
However, the shift also raises questions about data sovereignty and security, which remain important considerations for banks as they adopt new technologies and service providers.
As Huawei continues to expand its presence in Nigeria’s banking sector, it will be interesting to see how other technology providers respond and how banks balance their need for cost-effective solutions with concerns about data security and privacy.
