Huawei aims for $10B enterprise revenue via cloud

But its 2017 goal will face challenges, particularly in data security, given the Chinese networking vendor's links to spying allegations.
Written by Eileen Yu, Senior Contributing Editor

Huawei Technologies is looking to clock US$10 billion revenue from its enterprise business and has high hopes cloud will help lead the way. 

The Chinese networking equipment vendor said its enterprise unit was targeting to hit US$10 billion by 2017 by securing contracts in cloud hosting and networks, reported Bloomberg. This business division chalked up US$2.5 billion in revenue last year, climbing 32 percent, and would register a higher growth rate in 2014, said William Xu, who leads the business unit, at this week's CeBIT show in Hanover, Germany. 

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Shenzhen-based Huawei faces stiff competition from U.S. networking giant and current market leader, Cisco Systems, but the Chinese vendor is seeing bigger growth in the U.S. market. Its COO for enterprise in the U.S., Jane Li, said in a January report Huawei wasn't looking to on a price-cutting strategy but on providing the technology businesses today want to operate in a cloud environment. "The best competition is [about] who can win the cloud computing race," Li said. "There's huge growth in cloud computing and big data, [but] traditional IT equipment are designed for on-premise data centers. So we need to have a large R&D (research and development) platform to reinvent those equipment to adapt to the cloud infrastructure."

Xu told Bloomberg: "Our products are ready and leading in the industry. Meanwhile, we forged a lot of alliances with our partners and we developed a lot of resale partners."

He also dismissed allegations that Huawei was helping the Chinese government spy on foreign companies, and declined to comment on whether the Snowden-NSA revelations helped boost Huawei's play over Cisco in some markets. "Others may accuse us, but all we can do is our share to prepare, to assure that our network is secure and reliable," he said.

Huawei last year described the U.S. market as a "commercial disappointment", following the U.S. government's allegations it was helping the Chinese government spy on the country. It also declared it was no longer interested in the U.S and was shifting its focus on expanding in Europe, though Li earlier this year denied this was the case. "We are not leaving U.S., on the contrary, we are growing our business in the U.S.," Li said. "When you're caught in the crossfire between two large world economic powers, it's hard not to get sentimental about it. But the truth is, this is one of the greatest markets in the world for IT and we like it here," she noted.

According to Li, Huawei spends over 14 percent of its US$40 billion revenue on R&D.

Concerns about data security, however, continue to plague the Chinese vendor. The U.K. government departments including the Home Office, Ministry of Justice, and Crown Prosecution Service were reportedly instructed to stop using Huawei's videoconferencing systems during internal meetings amid concerns they could be embedded with tapping devices. The Chinese vendor dismissed the ban, calling it "misleading" and based on "inaccurate" information. 

Given that cloud hosting contracts will involve large volumes of corporate data, including confidential information, any concerns about security will need to be resolved should Huawei hope to achieve its US$10 billion enterprise revenue goal. But it has Snowden to thank for leveling the playing field a tad. 

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