February 24, 2014
Chinese media outlets recently published a speech given by Huawei CEO Ren Zhengfei in which he addressed Huawei’s enterprise business. This speech was not only represents the first public enterprise business overview since Huawei entered the market three years ago, but it also details the firm’s enterprise business development strategy for 2014.
First note that Huawei recorded US$2.5 billion in enterprise revenue in 2013, representing year-on-year growth of 33% — which did not meet the company’s expectations. Mr. Ren’s speech shows how Huawei is further fine-tuning its enterprise strategy and what that means for end users. He said that Huawei:
- Has an enterprise solution to support your big data strategy. Organizations need to translate huge amounts of data into business outcomes. While Huawei’s big data hardware solution didn’t address business requirements by industry and region, it plans to build complete big data solutions using FusionCube, its converged infrastructure product.
- Will centralize its resources in key products and regions. This is a good strategy for Huawei’s enterprise business, which focuses mainly on Asia Pacific and Europe. By concentrating on key countries like China, Japan, and India, Huawei can improve its local service capabilities, including maintenance, tech support, and ecosystem development, via ISVs and SIs.
- Still needs to refine its channel. In 2013, we observed that Huawei’s partner program structure, especially for IT services, brought those partners added revenue. The firm has also invested in channel enablement and assessment tools to bring transparency and streamline processes with its partner community, including SIs and ISVs. Huawei still needs to further localize its channel strategy and staff and incorporate local culture into its go-to-market strategies.
- Must keep its price advantage in the global market. Huawei wants to improve the margin on its enterprise products, but as a new player in the enterprise market, it’s difficult. Huawei can improve its margins but must maintain its price advantage in order to compete with global vendors and push more innovative products in storage or cloud computing.
- Will recruit more talent from competitors across the world. Recruiting global talent will not only introduce Huawei to global customers, but also familiarize it with enterprise requirements and business development trends worldwide. But Huawei’s must improve its talent recruitment plan in the global market to avoid situations such as when, in 2012, its general manager for enterprise channel sales in Australia, Gavin Milton-White, left the company after just 10 months.
What should I&O teams do with Huawei? They should start by learning about Huawei’s solutions and capabilities and understanding how Huawei’s options, whether low-price or customized, work with their IT infrastructures. I’m currently writing a report entitled “Consider Whether To Put Huawei On Your Provider List,” which should be published in the next month. I welcome your comments and feedback about your perspectives on Huawei’s enterprise solutions.