Last week I gained first hand insight into how one of the up and comers in networking is putting price pressure on heavyweights like Cisco, Ericsson and Alcatel-Lucent.
My colleague Renai LeMay has previously noted that Chinese networking vendor Huawei has made inroads into international markets through its price competitiveness. In fact, international sales outstripped domestic ones for the first time at Huawei last year.
Such is the growing importance of the international market to Huawei that I was fortunate enough to receive a tour of the company's headquarters in Shenzhen, China.
With 20,000 people employed at the site, the company premises are nothing short of huge (1.5 square kilometres). I had to check with my hosts that all the buildings I could see were indeed owned by Huawei. We were driven around the site to different areas, each with their own security entrance as if you were entering a different company. Huawei also has other offices around China.
More interesting however is how Huawei treats its employees. Here are just some of the benefits of being on board:
- Staff apartments are on-site for workers who want to live, breathe and eat Huawei. The cost? Just AU$150 per month.
- A range of meals are available from Huawei eating halls, but the cheapest starts at just AU$2.
- Employees can obtain discounts on other goods on-site using their staff ID card.
Cheap living indeed. As I toured the site I also noticed most Huawei employees seemed to be around 30 years of age or younger.
These factors seem to highlight the cheap cost of labour in China. Huawei can probably pay its staff less than what workers in Western countries might demand, but that doesn't come at the cost of the Huawei employee's pay packet. In fact, the vendor seems to have created pretty cushy benefits for staff.
This, plus the fact that Huawei manufactures the processors used in its products, must all be a pretty strong advantage when it comes to keeping costs down and prices low.
ZDNet Australia's Steven Deare travelled to China as a guest of Huawei.