Huawei Building Up Its Enterprise Muscle

Source: Digital Life, Singapre

China’s Huawei, known for its telecommunications and networking business, is working to triple the staff of its 10-month-old Enterprise Business Group which offers cloud computing and other IT solutions to customers globally.

This group is one of the Shenzhen-based company's three businesses. The other two are in telecom networks and in consumer devices such as tablets.

The enterprise group's worldwide headcount of 10,000 employees will double to 20,000 next year and grow to 30,000 in 2013.

Its president, Mr. William Xu, said the group expects to earn US$4 billion (S$5 billion) this year and US$7 billion the next.

Its revenue target for 2015 is between US$15billion and US$20 billion worldwide, he told a press conference last week at ITU Telecom World 2011 in Geneva, Switzerland.

By then, the workforce needed to support the group is expected to be 40,000 strong, Mr. Mario Fan, Huawei's president of Enterprise Business for Western Europe, told Digital Life.

Doctors and teachers are among those it wants to employ to build up its knowledge pool in healthcare and education, and to help its software developers create applications for these sectors, he said.

Energy, transportation and the public sector are among the other vertical industries targeted.

A vertical industry refers to a group of similar companies which engage in specialized business.

Huawei's enterprise group also needs staff with expertise in cloud computing and professional services, as well as developers to create vertical industry applications.

It requires sales and technical support partners through which most sales efforts will be directed, although Huawei will service major customers directly.

Brand Not Well Known Overseas

The Chinese tech giant will be competing with other companies that also rely on partners, he said. It is setting up a partnership programme to sign up about 10 to 15 distributors and resellers in each country.

It will not be easy to break into national or global enterprise business markets, Mr. Fan acknowledged.

Huawei, started 23 years ago, earned 185.2 billion yuan (S$36.3 billion) last year but has formidable competitors. They include the century-old IBM (which earned nearly US$100 billion last year); 72-year-old Hewlett- Packard (US$126 billion); and 27-year-old networking giant Cisco (US$43billion).

All offer enterprise solutions that include cloud computing, hardware, software, networking and services.

With its strength in networking and telecommunications, Huawei said it can offer a complete package as well as professional consultancy and technical support.

Brand awareness and reputation are issues it has to face, Mr. Fan said.

It was the same when Huawei entered the European telco market about 11 years ago.

“People asked, ‘Who is Huawei and what does it do?’ Prospective customers wondered what liabilities there will be if they bought from Huawei and debated if they should select us. They doubted our capabilities. They asked for customer references,” said Mr. Fan:

Its strategy was to develop a strong customer-centric culture in order to win trust and to build its brand reputation, he said.

Today, it has secured contracts for both fixed-line and mobile networks from 46 out of 50 of the top global telcos, including Bell Canada, British Telecom, Telstra in Australia, SK Telecom in South Korea and, at home, China Telecom and China Unicom.

In Singapore, Huawei won the networking infrastructure contract from Nucleus Connect, the operating company of the island-wide Next-Generation National Broadband Network. It also won the M1 contract for the next-evolution network commonly referred to as 4G.

Last month, it indicated its interest in the Government's Central G-Cloud tender.

And how much money is Huawei setting aside for its enterprise group?

“We don’t have a figure,” said Mr. Fan. “We are still early in our investment period.”

Indeed, the company will need time to prove itself in the enterprise sector.