Huawei to Leverage Networking History to Build Enterprise Business

By Erik Linask April 02, 2014

Chinese telecom giant Huawei’s challenge isn’t product quality – it has for long been recognized globally among the top carrier network vendors. But, as a three-year-old relative newcomer to the enterprise market, it faces a challenge not only from market leaders, like Cisco and HP, but also from the perception that it is a carriers’ vendor.  Add to that additional political obstacles in the U.S., in particular, and the task at hand seems challenging, at best.

But talking to Patrick Zhang Shunmao, president, Marketing and Solutions, Huawei Enterprise, the company is anything but dissuaded by these factors. Shunmao says Huawei expects to follow a 32 percent growth year in its enterprise business last year with at least a 40 percent margin in 2014, driven by its growing channel program, which is a primary area of focus.

It has already added NewEgg and ASI as distribution partners this year, and has launched a service partner program with Sumaria Networks to provide training and development to Huawei’s customers and partners. It is also looking to significantly enhance its support network in the U.S. to provide 24-hour call center and service capabilities.

According to Shunmao, a key to building its channel is that Huawei has no interest in competing with its partners for service fees, something that has, for many channel programs, become a bone of contention as vendors seek to increase direct revenue streams.

As for product, the fact is that Huawei has expertise in carrier networking, which it is leveraging in its enterprise brand at a time when large enterprises are hardly discernable from small operators. Swift Liu, president, Enterprise Business Group, Networking Product Line, says the next three years will be critical, and that SDN will play a major role, but he sees the evolution of enterprise networks extending beyond SDN, to what he calls agile networks.

It may be a question of semantics, but Liu is referring to SDN as effectively an interface to the agile network, and not capable of fully creating the transformation on its own, as the ASICs aren’t yet able to be fully programmed to the degree that is required.

Liu’s vision of the agile network is effectively a full transformation of the infrastructure rather than a partial implementation in conjunction with aging legacy components. That said he recognizes it is a transitional process and acknowledges the need for interoperability with legacy equipment. He says that, immediately after launching its agile switches, Huawei won some 200 projects, and is currently in competition for more than 500 additional projects.

Wireless is another area where Huawei believes it has an advantage, with more than 100 deployed LTE solutions in the telecom sector, which Shunmao says it is parlaying into success in specific enterprise markets where Wi-Fi simply won’t get the job done under high usage scenarios, such as metro areas and subway systems.

Conceptually, Huawei sees the evolution of networking being driven by the same trends as its competitors – mobility, cloud, big data, IoT, social media – and they all recognize existing networks are incapable of providing the agility and flexibility to meet growing requirements and business models. It acknowledges it has multiple obstacles in its way, but seems to understand where its path to success lies. With its network technology legacy, if it is able to continue to build its partner program – and Shunmao exhibits little doubt it will – the market is certainly big enough to support it.




Edited by Stefania Viscusi

Group Editorial Director

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