Huawei Seeks Foothold in Enterprise Market（WSJ.com Blogs）

http://blogs.wsj.com/digits/2013/08/08/Huawei-seeks-foothold-in-enterprise-market/?KEYWORDS=Huawei

6:55 am

Aug 8, 2013

By Juro Osawa

China’s Huawei Technologies Co. is looking beyond its mainstay telecommunications network equipment business and trying to diversify into the market for communications gear used by corporate clients to build their own campus networks. In an interview this week, a Huawei senior executive said the company expects revenue from the enterprise-network business to grow 40% this year.

On one hand, telecom network equipment – a market where Huawei already has strong global presence — and equipment for corporate campus networks share common elements in terms of technology. Still, one crucial difference is the way equipment is sold.

In the telecom network business, Huawei works closely with telecom operators around the world to supply equipment. In the enterprise-network market, equipment suppliers work with sales partners who distribute the products to corporate clients in various industries. Huawei needs to build strong relationships with resellers around the world in order to reach more clients. The world’s two dominant enterprise-network gear suppliers, Cisco Systems Inc.CSCO +0.54% and Juniper Networks Inc.JNPR +0.73%, already have large communities of resellers around their businesses.

Building relationships with resellers “is like dating or marriage,” said William Xu, who heads Huawei’s enterprise business group in an interview this week. “It takes mutual attraction.”

Canalys analyst Matthew Ball said that, while it may be possible for Huawei to convince some resellers currently working with Cisco and Juniper to start dealing in Huawei products on the side, it will take a lot more time and effort to convince the sales partners to prioritize Huawei over Cisco or Juniper.

Other than the enterprise-network gear business, Huawei is also trying to expand its smartphone business. The company, which has grown in China as a major supplier of low-cost handsets, is trying to sell more sophisticated smartphones globally to compete against more established brands such as Samsung Electronics Co.