Cisco on Huawei: 'Imitation isn't innovation'

Cisco on Huawei: 'Imitation isn't innovation'

Summary: Cisco CEO John Chambers and Rob Lloyd, executive VP of worldwide operations, question Huawei's innovation. Huawei said it welcomes the enterprise competition.

TOPICS: Emerging Tech, Cisco

Cisco CEO John Chambers and his executive crew didn't hold back when asked about their thoughts on Huawei. The comments highlight the increasing tension between the two companies.

Speaking on Cisco's third quarter earnings conference call, Chambers was asked about competition from Huawei---a Chinese networking rival---and didn't pull any punches.

Chambers' comments highlight the high-stakes competition between the two companies. Huawei wants to be a player in the U.S., where its Chinese government ties raise concerns. Cisco wants Chinese expansion in Huawei's home turf.

Also: Cisco Q3 solid, manages dicey IT spending; Q4 outlook cutAmid IT spending pause, Cisco's collaboration tools stumble

Verbal and political jabs aside, here's what's really at stake: Huawei's Chinese heritage and presence in emerging markets can effectively block Cisco's plans for global expansion. While the battle in the U.S. continues, the real war will be for emerging markets, which will drive growth for the years ahead.

A look at Huawei's annual results.

A look at Huawei's annual results

Chambers was asked about Huawei's move to the enterprise. He said:

Let me start with the two minute elevator pitch in terms of Cisco versus a player like Huawei in the enterprise. Every year that I've been here there's either been a key large competitor, a Dell, an IBM, a Microsoft, and teams even an Intel that was going to come at us and unseat us in an area. There are always product transitions every year that people get concerned about and for 20 years we've come out of it stronger. That's not a guarantee of how it will turn out in the future but it does mean we react very, very effectively. In terms of our enterprise customers, there's no one that has higher loyalty to Cisco. You see that in the surveys in the balance. We've got to earn that every day and as we move into an architectural sale that helps them accomplish their business goals. I want to point out Huawei's numbers. They were 11% up year-over-year and they're getting into everything from tablets, to servers, to data centers to traditional networking and we'll see if they get themselves spread too thin. Given the areas they're in with a lot of support from their government i.e. $40 billion in loans, that was not a particularly exciting number as least from my perspective.

Then Rob Lloyd, Cisco's executive vice president of worldwide operations, said:

One of the things at the heart of our customers is looking at innovation. There's so much happening and we clearly know that our customers view innovation from Cisco and they don't see the same from Huawei. We would clearly say that imitation isn't innovation. And I think our customers recognize that. Finally, today's cloud centric world integrity is everything. The privacy of information, how data is protected is forefront in our customers' mind in a cloud centric world. That's not the forte of Huawei.

Cisco's comments are notable for their timing. This week Huawei rolled out its next generation data center switches. The switches, dubbed the CloudEngine series, are aimed directly at Cisco's core enterprise business. Huawei also announced its next-gen telepresence system in another shot at Cisco.

For its part, Huawei's response was measured. Bill Plummer, vice president of external affairs at Huawei Technologies, said:

There is ample room for competition in the enterprise space and Huawei looks forward to leveraging its well-proven history of collaboration to serve customers based on the merits of its globally-recognized innovative and secure solutions.


Topics: Emerging Tech, Cisco

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.


Log in or register to join the discussion
  • I think the key they miss is price

    Cisco gear has always been a premium price. They make quality equipment and I can't think of anyone that disparages them on that front. The challenge they now face is that same thing Nortel faced: The first-mover advantage has limited life and premiums early adopters accept are not acceptable to the bulk of the market. This is where cheap rivals out flank the Cisco's and the Nortel's with the knock-off. The only good thing that can be said about Huawei is that they are cheap. Sometimes cheap is good enough.
  • What about the Espionage Concerns

    Was something proved against HUWAEI? In my country (portugal) all Internet mobile cards are from that company.
  • Innovation and Competititon

    I know CISCO well from my time as the UK Government CIO and information risk owner. They are a good organisation and they should not be frightened of competition.
    I have had the pleasure of working with all of the leading ICT companies when in Government.

    What is clear is that those who welcome competition thrive on innovation and are close to customers will succeed ??? I hope this is the model that John and his team will adopt ??? It is competition that keeps companies alive ??? not trying to block competition through misinformation.

    The reality is that Huawei has less than 1% market share in the USA, yet the USA has substantial security issues ??? security issues therefore inherent in non-Huawei equipment.

    Innovation and competition is what makes companies efficient, increases value and then puts money in the hard pressed tax-payers pocket. Let us embrace this competition not try and stop it.

    I am delighted that CISCO is investing so much in China ($16bn at the last count) and has substantial design, development and manufacturing in China which is then distributed to the rest of the world. John sums up the importance of China, the quality of Chinese companies and engineers when he says ???If I wasn???t American I would be Chinese??? and that ???what we are trying to do is to outline an entire strategy of becoming a Chinese company???.

    China welcomes John and CISCO; it is a pity that John and CISCO do not reciprocate in that openness.

    If we want to see the continued adoption of technology, if we want to see the way technology enriches life then let us all work together collaboratively to solve the cyber security issue.

    At Huawei we warmly welcome any audit, any inspection, any review. We will adopt any internationally agreed standard; allow all of our products to go through independent reviews and verification ??? because after every audit we improve our products, improve our processes and deliver even better products to our customers.

    I wish John and CISCO all the very best and genuinely hope they compete on innovation and customer service as this is what has made Huawei great.

    John Suffolk
    SVP | Global Cyber Security Officer
  • Yes the US need to ditch US companies for chinese companies.......

    We already make tons of stuff there. To save even more costs, why not ditch american companies all together and get the chinese made products directly from chinese companies. Yes this will definitely help U.S economy...

    what U.S needs is competition from U.S companies that make stuff in U.S.
  • CISCO - Great company but low bar

    I am a user of both CISCO and HUAWEI gears. I do not like suppliers bash each other on non-qualitative statements. I would rather have them provide the data to customers/press etc. and let us make up our own mind. Of course this is all ideal.

    But seriously I would have expected that CISCO would have taken the opportunity to rather talk about HOW they are differentiating THEMSELVES than showing the other company down.
  • competition

    does this push them to build harder? or just to stay the same...interesting approach by CISCO. why do they care so much?