EMC unfazed by compeition from Huawei's 'young' enterprise biz

With its enterprise business still in the early stage and focus on consumers, Huawei currently presents little competition to EMC, says CTO John Roese, who once led Huawei's Futurewei business.
Written by Eileen Yu, Senior Contributing Editor

LAS VEGAS, USA--EMC remains cool about any potential competition from Huawei Technologies as the latter's enterprise business is still in its early stage and poses little real threat.

Furthermore, the Chinese telecom equipment maker's focus remained primarily on the carrier and consumer markets, which offered significant growth opportunities for the company, EMC's senior vice president and CTO, John Roese, said in an interview.

Speaking to ZDNet at the vendor's EMC World 2016 conference here this week, he said: "Huawei does very well [as a company, but] its enterprise business is young and not their core competence. It's an early-stage market for them."

While the Chinese vendor had talked about its aspirations in this space, and its ambition was "big", Roese noted that it was "a distant big" and insignificant compared to the size of its carrier and consumer businesses. The company also had been investing in its 4G and 5G networks as well as tapping growth potential in the Internet of Things (IoT).

"I would not want to be a mobile equipment supplier competing against Huawei, but I'm perfectly comfortable competing with them in the enterprise space, where we're 100 percent focused on innovating," he said, while stressing his respect for Huawei where he himself had been an employee. Prior to joining EMC, Roese had led the Chinese vendor's Silicon Valley advanced development arm, Futurewei Technologies.

"They are big, but the way you compete with Huawei and any [other big player] is to out-innovate them," he said, pointing to EMC's pipeline of next-generation technology and product releases unveiled at the conference this week. He added that the combined entity of Dell and EMC, should the merger receive its final rounds of approval later this year, would be one of few that were comparable in size to Huawei.

Huawei's 2015 revenue climbed 37 percent year-on-year to 395 billion yuan (US$60.8 billion) worldwide, with growth fuelled by a robust consumer business and increased demand for ICT. Generating 27.6 billion yuan (US$4.3 billion) in revenue, its enterprise business contributed just 7 percent of its overall business, compared to it carrier business which accounted for 59 percent. Its consumer business contributed the remaining 33 percent.

The vendor had said it was targeting to generate US$10 billion revenue from its enterprise business by next year, with cloud leading the way, It also expressed a desire to become the world's third-largest data storage vendor by 2018, targeting to claim market share from current leaders EMC and IBM.

Dell itself had identified China--its second largest market outside of US--as a key market potential, alongside India and the US. Founder and CEO Michael Dell last year said the company was looking to invest US$125 billion in the country over the next five years, sustaining one million jobs through the ecosystem.

EMC Asia-Pacific Japan COO and vice president of specialty sales, Dmitri Chen, also pointed to significant growth potential in the region, which was home to two-thirds of the world's population.

Pointing to emerging markets such as Vietnam and Myanmar, Chen said these countries were ready to embark on their digitisation journey and modernise their infrastructures without having to worry about legacy systems.

Modernisation had been a key theme throughout EMC World, where the storage vendor unveiled a sleuth of products touted to help customers with their digital transformation and deliver what it had identified to be the four key pillars of modern data centres: flash, cloud-enabled, scale out, and software defined.

Hyperconverged architectures also featured strongly, with Chen stressing its growth potential in Asia-Pacific where small and mid-range companies would find the simplicity in deploying and managing such systems appealing. They also would be able to start small with the VMware VxRail appliance and scale out, to up to 64 nodes, as they grew their business, he said.

Not generic public cloud player

At the conference this week, EMC also pushed its Virtustream Storage Cloud offering to the forefront of its public and hybrid cloud offerings, leading to suggestions it was pitting itself against major public cloud platforms AWS, Google, and Microsoft Azure.

Roese, however, dismissed such notion. He noted that both Dell and EMC had been peddling products and systems to help enterprise customers build their own cloud infrastructures as well as cloud service providers looking to scale out their own network. For instance, its Isilon NAS and cloud-based storage offering had been deployed by web-scale companies.

EMC and Dell also provided systems that could be packaged, as part of their converged infrastructure efforts, to help substantiate cloud architectures, he said.

"The one thing we're not interested in...we see no reason to participate as a generic public cloud [players] like Azure, AWS, or Google," Roese said, adding that these players' economic model was driven by the idea that millions of customers could get on a shared network to access the same set of applications. "But there are also customers that benefit from not being on the blob of the cloud."

These organisations would need what EMC described as a "hyper-scale storage platform" built to host mission-critical applications and data on the cloud. This, he said, was where Virtustream was well placed, offering a core architecture designed to provide the resiliency and performance to support complex business systems such as SAP. Such tier-1 applications would not be able to run well on public clouds such as AWS, which were not built to support high-performance applications.

Asked about VMware's decision to pull out from the Virtustream integration plans, Roese explained that it was an inevitable result of resolving a complex merger that involved multiple companies and technologies.

While it was unfortunate that this had to be resolved on the public domain, he said they had to work through the different options and decide what would make the most sense for the companies involved. The financial impact, resources needed as well as the impact on customers had to be assessed in all decisions, he noted.

"When we looked at how we should organise our pubic cloud assets, we concluded [VMware's Virtustream integration] didn't quite make sense," he said, noting that VMware vCloud Air was designed for elastic compute and workload demands, while Virtustream was built specifically for high-performance mission-critical applications. "Just because both are public clouds doesn't mean they should be in the same space."

Based in Singapore, Eileen Yu reported for ZDNet from EMC World 2016 in Las Vegas, USA, on the invitation of EMC.

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