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Saturday, 12 May 2012 - Huawei gearing up to take on Cisco on its home turf |
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      Edition: U.S. Africa Arabic Argentina Brazil Canada China France Germany India Italy Japan Latin America Mexico Russia Spain United Kingdom Home Business Business Home Economy Technology Media Small Business Legal Deals Earnings Social Pulse Business Video The Freeland File Markets Markets Home U.S. Markets European Markets Asian Markets Global Market Data Indices M&A Stocks Bonds Currencies Commodities Futures Funds peHUB World World Home U.S. Brazil China Euro Zone Japan Mexico Russia India Insight World Video Reuters Investigates Decoder Politics Politics Home Election 2012 Issues 2012 Candidates 2012 Tales from the Trail Political Punchlines Supreme Court Politics Video Tech Technology Home MediaFile Science Tech Video Tech Tonic Social Pulse Opinion Opinion Home Chrystia Freeland John Lloyd Felix Salmon Jack Shafer David Rohde Bernd Debusmann Nader Mousavizadeh Lucy P. 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See the best of Reuters photography.  See more | Photo caption  Photos of the week Our top photos from the past week.  Slideshow  Mother's Day in prison An annual Mother's Day event, Get On The Bus, brings children to visit their mothers in prison.   Slideshow  Afghan girls An indepth look at the lives of girls in Afghanistan in times of uncertainty.  Slideshow  Huawei gearing up to take on Cisco on its home turf Tweet Share this Email Print Related News Cisco shares drop on tech spending worries Thu, May 10 2012 Cisco outlook underwhelms, economy fears persist Wed, May 9 2012 Motorola Solutions profit beats on strong govt spend Wed, Apr 25 2012 Ericsson raises hopes mobile gear market stabilized Wed, Apr 25 2012 Huawei forecasts handset shipments above 100 million this year Wed, Apr 25 2012 Analysis & Opinion Can Silicon Valley fix the mortgage market? Twitter gives peace a chance in patent wars Related Topics Tech » The logo of the Huawei Technologies Co. Ltd. is seen outside its headquarters in Shenzhen, Guangdong province, April 17, 2012. Credit: Reuters/Tyrone Siu By Nicola Leske Fri May 11, 2012 8:51pm EDT (Reuters) - Huawei's head of research and development in North America said his company is more than ready to take on larger rival Cisco Systems but noted it will take some patience -- and time. "The U.S. is by far our most complex market ... for us our entrance into the U.S. is similar to a western company entering China," John Roese said in an interview with Reuters on the sidelines of IT infrastructure conference Interop in Las Vegas. For a decade, China-based Huawei with U.S. headquarters in Plano, Texas, has been selling infrastructure to U.S. telecom operators. It sells routers and switches that move data through networks and devices such as modems and smartphones, but now it aims to provide equipment to large businesses, a market dominated by Cisco Systems. Huawei in September of last year launched its enterprise unit and aims to generate $15 billion worldwide in revenue by 2015. This year it sees deals totaling more than $7 billion worldwide and expects to invest $4.5 billion in research and development. The enterprise unit provides equipment such as hubs, routers and switches that run networks transferring data across corporations. "We basically said it will take a few years to get to critical mass but the U.S. is not critical to our revenue objective," Roese said. Huawei's enterprise unit revenue rose 57.1 percent in 2011 to 9.16 billion yuan ($1.45 billion), making it the fastest growing division though it contributes only 4.5 percent of total revenue. Roese, a technology veteran who has worked at Nortel, Broadcom, Enterasys and Cabletron, said the company had not publicly set any financial goals for the U.S. market but he made it clear that Huawei has what it takes to be a formidable rival to Cisco in the United States. Cisco is the world's leading maker of networking gear. "There really has not been a legitimate major competitor for Cisco for a long time ... and in comes Huawei and we are not a small player," Roese said. Cisco's Chief Executive John Chambers has repeatedly called Huawei its toughest rival in the enterprise market and promised to be compete aggressively. In 2003, Cisco sued Huawei for allegedly infringing on some of its patents. Huawei removed the contested parts and the case was dropped. ANNOUNCES NEW DEALS Cisco's executive vice president Rob Lloyd implied that Huawei was still imitating and not innovating and questioned its security credentials: "We clearly know that our customers view innovation from Cisco and they don't see the same from Huawei. We would clearly say that imitation isn't innovation," Lloyd said on the company's earnings call this past Tuesday. "The privacy of information, how data is protected is forefront in our customers' mind in a cloud centric world. That's not the forte of Huawei," Lloyd also said. Roese shrugged off the comments. "If they want to declare us public enemy No 1 and their biggest threat, I am glad to take that compliment," Roese said, adding that currently Huawei was still too small a player in the U.S. to compete with Cisco. But it's certainly gearing up to take on Cisco. Huawei this week announced its first U.S. distribution agreement with IT-distributor Synnex that will allow it to expand its presence in the U.S. enterprise market It is also launching new products that compete with Cisco's telepresence offerings and network switches. Still, the United States has been a difficult market for Huawei to crack as some U.S. politicians are wary of the company's secretive founder and Chief Executive Ren Zhengfei, a former Chinese military officer. There are also concerns regarding the security of its hardware. Roese said Huawei was currently not doing business with the U.S. federal government or the financial services market. "We have to get a few things behind us before we can sell to the federal government," Roese said. Huawei has been at pains to overcome national security concerns in the U.S. and was dealt a fresh blow this week when the House of Representatives Armed Services Committee adopted legislation that included a measure to root out any technology produced by Huawei in the United States nuclear weapons complex. Roese added that it did not have the necessary distribution channels needed to serve the financial services industry yet. The company is focused on supplying businesses in the health care industry and education sector with its products such as telepresence equipment and data center switches, Roese said. "We are definitely in a building phase and we are very patient," Roese said and quipped that thanks to Cisco the company was at least getting some free advertisement. "I joke that our biggest ally in educating people who we are has been Mr. Chambers. He has done a fantastic job teaching people how to pronounce our name." ($1 = 6.3106 Chinese yuan) (Reporting by Nicola Leske; Editing by Bernard Orr) Tech Related Quotes and News Company Price Related News Tweet this Link this Share this Digg this Email Reprints   We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/ Comments (1) CountryPride wrote:   Edition: U.S. Africa Arabic Argentina Brazil Canada China France Germany India Italy Japan Latin America Mexico Russia Spain United Kingdom Back to top Reuters.com Business Markets World Politics Technology Opinion Money Pictures Videos Site Index Legal Bankruptcy Law California Legal New York Legal Securities Law Support & Contact Support Corrections Connect with Reuters Twitter   Facebook   LinkedIn   RSS   Podcast   Newsletters   Mobile About Privacy Policy Terms of Use AdChoices Copyright Our Flagship financial information platform incorporating Reuters Insider An ultra-low latency infrastructure for electronic trading and data distribution A connected approach to governance, risk and compliance Our next generation legal research platform Our global tax workstation Thomsonreuters.com About Thomson Reuters Investor Relations Careers Contact Us   Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. Thomson Reuters journalists are subject to an Editorial Handbook which requires fair presentation and disclosure of relevant interests. NYSE and AMEX quotes delayed by at least 20 minutes. Nasdaq delayed by at least 15 minutes. For a complete list of exchanges and delays, please click here.

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