“The US is by far our most complex market … for us our entrance into the US is similar to a western company entering China,” Roese said on the sidelines of Interop, an internet technology infrastructure conference in Las Vegas.
For a decade, China-based Huawei has been selling infrastructure to US telecoms operators. It sells routers and switches that move data through networks and devices such as modems and smartphones, but now it aims to provide equipment to large businesses, a market dominated by Cisco Systems.
Huawei in September last year launched its enterprise unit and aims to generate US$15 billion worldwide in revenue by 2015. This year it expects its deals to total more than $7 billion worldwide.
The enterprise unit provides equipment such as hubs, routers and switches that run networks transferring data across corporations.
“We basically said it will take a few years to get to critical mass but the US is not critical to our revenue objective,” Roese said.
Huawei’s enterprise unit revenue rose 57.1 per cent in 2011 to 9.16 billion yuan (HK$11.26 billion), making it the fastest growing division though it contributes only 4.5 per cent of total revenue.
Cisco is the world’s leading maker of networking gear.
“There really has not been a legitimate major competitor for Cisco for a long time … and in comes Huawei and we are not a small player,” Roese said.
Cisco’s chief executive John Chambers (pictured) has repeatedly called Huawei its toughest rival in the enterprise market and promised to be compete aggressively.
In 2003, Cisco sued Huawei for allegedly infringing on patents. Huawei removed the contested parts and the case was dropped.
Cisco’s executive vice-president Rob Lloyd implied that Huawei was still imitating and questioned its security credentials. “The privacy of information, how data is protected, is forefront in our customers’ mind in a cloud-centric world,” he said.
Roese shrugged off the comments. “If they want to declare us public enemy No1 and their biggest threat, I am glad to take that compliment,” Roese said, adding that Huawei was still too small a player in the US to compete with Cisco.
But it is gearing up to take on Cisco. Huawei last week announced its first US distribution agreement with IT-distributor Synnex that will allow it to expand its presence in the US enterprise market. It is also launching new products that compete with Cisco’s telepresence offerings and network switches.
Still, the United States has been a difficult market for Huawei to crack as some US politicians are wary of the company’s secretive founder and chief executive Ren Zhengfei, a former Chinese military officer. There are also concerns regarding the security of its hardware.
- Cisco nemesis Huawei to demo 96-port 100G Ethernet switch (computerworld.co.nz)
- Watch out Cisco. Huawei’s coming! (gigaom.com)
- Cisco on Huawei: ‘Imitation isn’t innovation’ (zdnet.com)