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Cloud Services

Huawei Expects Relentless Growth

Huawei is nothing if not doggedly optimistic. Despite persistent knockbacks in the U.S. and other markets, the Chinese vendor is predicting (in its annual report, published today) an annual growth rate of 10 percent for the next five years: Based on its 2012 revenues of 220.19 billion yuan renminbi (US$35.49 billion), that would take it to annual revenues of about RMB355 billion ($57.2 billion) in 2017. (See Huawei Expects 10%+ Growth in 2013.) And although Ericsson AB is positive about this year's market -- see Euronews: Ericsson Accentuates the Positive -- it's likely that Huawei will very soon snatch, and retain, the Swedish giant's "biggest vendor" crown. (See Ericsson Retains Its Crown – Barely.) So where is this growth going to come from? Well, not so much from the traditional telecom network hardware and software product lines, even though the vendor's Carrier Network Business Group registered year-on-year sales growth of 6.7 percent to reach RMB160.1 billion ($25.8 billion) in 2012. Huawei expects any growth for this group to come from demand for professional services (managed services, consulting), cloud service enablement and carrier data center builds. More explosive potential exists for the vendor's Enterprise Business Group, which saw its annual revenues increase 25.8 percent to RMB11.5 billion ($1.85 billion) last year. Huawei has been focusing on enterprise customers for less than two years so it is still building momentum with its focus on cloud computing, data center technology and storage. The Consumer unit, with its focus on smartphone development, has been very high profile during the past year. It grew its revenues by 8.4 percent to RMB48.4 billion ($7.8 billion) in 2012 and by the end of last year was the number three smartphone vendor globally, according to Gartner. But for all its gusto, the vendor is aware that, as an increasingly large player in the global technology sector, it is prone to the type of weakness that has killed off other large players (think Nortel, although of course that company wasn't named by Huawei). In the annual report, group CEO Ren Zhengfei notes that Huawei is committed to ensuring its staff play by the rules and limit their financial compensation to the salaries, bonuses and incentives they get from their employer: "No income from outside Huawei is allowed," notes Ren. "History tells us that that if large companies miss a turning point and start to decline, few of them can reverse the situation by restructuring themselves. Naturally, we would hate to fall; so we must restrain ourselves, observe rules, and stay united and dedicated." With 150,000 employees, that's a tough policing job and Ren can be sure that every other player in the market will be watching every move made by Huawei's staff just as closely as the Chinese vendor's own human resources team. — Ray Le Maistre, Editor-in-Chief, Light Reading

chuckj 4/9/2013 | 12:17:01 AM
re: Huawei Expects Relentless Growth The spectrum the small cell-áuse-áis carriers already and the traffic is carriers already, and any application that Cisco provides the Enterprise to push out ads will use a form of SMS or data that is also carriers already for which they get paid by their customers. -á If Wallmart buys the hardware and back haul, they have every right to be able to push ads on their own networks. -á

Let me ask the question another way, if Cisco can not make any move in installing the small cells at Enterprise without the carrier's approval, and there is no hope of getting the government to back them up, then what is the business case for Cisco dumping linksys and buying ubiquisys? -áWhere does Wallmart go to get their cells and back haul installed? -áTelco's? good luck, Wallmart alone has roughly 10k retail outfits in the U.S. and how many of those retail locations are-áincluded-áin the 40k cells ATT is planning for the next two years? -á

If you think Cisco's plan is to sell to Telco's and waiting out their 18 month-áqualification-ácycle, you don't know Cisco.

As for Wifi doing the same thing:-áPeople don't log into Wifi in every store they walk by in the mall and if you have to log in that would not be push ad, therefore not as effective as a true push ad.
brookseven 4/8/2013 | 9:22:09 PM
re: Huawei Expects Relentless Growth Again, -áWalmart + Cisco <<<< Carriers at lobbying at the FCC. -áChances of Walmart or Cisco winning at the FCC is approximately that of a snowball in hell.

Now if Walmart wants to PAY the carriers for the spectrum then they might have something. -áI also don't see Walmart buying spectrum from EVERY carrier serving their area (otherwise they only cover 1 of them). -áYou do want to cover Verizon AND AT&T and T-Mobile and Sprint at least right?

Finally, you could do this only on a small cell at your location. -áYou could not force the carrier to push the ads on their cells. -áThat means that coverage = the small cell coverage ONLY and not always. -áYou can't do always unless you are a carrier (and even then - well spotty always). -áWhich means free store WiFi for customers does the same thing and requires no lobbying.

seven
DanJones 4/8/2013 | 8:27:43 PM
re: Huawei Expects Relentless Growth -áWouldn't they be lobbying against some of their main customers main interests then though?
chuckj 4/8/2013 | 7:40:28 PM
re: Huawei Expects Relentless Growth Wifi would never work. -á You need an always-open channel to the smartphone to effectively push adds and small cells provide that. -áIf this was possible with Wifi Chambers would not have dumped linksys. -áAs for lobbying, if Walmart wants to install these small cells in their stores and push adds right now and has a contract with Cisco to do it, both Cisco and-áWalmart-áwill be lobbying for this-ábecause-áATT is incapable of providing this product/service, and example of that is, the 18 month (or more) the ATT-áis going to take to assure 99.999% clean handoff between the-ámacro cell-áand small cell. -á Every store in the mall that has this technology is at a-ácompetitive-áadvantage-áovers others that don't have it.
chuckj 4/8/2013 | 7:22:03 PM
re: Huawei Expects Relentless Growth I -áthink because the spectrum is used to-átransmit the carriers-áown calls and data they don't have a leg to stand on for not giving permission and Cisco is the 500 lbs-ágorilla that can run them over if they try to put in roadblocks. -áThis is going to be Chambers next multi $billion market for networking hardware and he will have his legal team lined up.
brookseven 4/8/2013 | 7:11:25 PM
re: Huawei Expects Relentless Growth Dan,

That idea of his sounds a lot better for WiFi than small cells.

I see where retail might want -áto push ads. -áNot sure why my small plastic manufacturer wants to put a small cell ad push in.

seven

PS - Cisco lobbying.....LOL. -áThey are nowhere in DC compared to the carriers.
DanJones 4/8/2013 | 6:28:33 PM
re: Huawei Expects Relentless Growth The problem I can see with that is that small cells are using licensed spectrum owned by the operators. Seems like you'd have to get permission to use it.
chuckj 4/8/2013 | 5:59:15 PM
re: Huawei Expects Relentless Growth Enterprise is where the action is, as we all heard the laugh-er-áwith ATT's plan to install their 40k small cells in the next 2 years. -á I bet Cisco's plan for buying ubiquisys is to market to enterprise directly to get them install their own small cells to take advantage of the location based services each small cell can offer which is a potential boon for new revenue for Enterpirse. -áSmall Cells can push adds and we all know push is by far the most effective way to generate revenue. -áEach enterprise can run their own push adds on their own small cells and offer location based products and services, though I bet the Telco's want the piece of the action-áeven though-áthey did not invest a dime. -áCisco is big enough to indemnify their customers and -áfight the Telco's. -áAll the Telco's should get (and don't deserve) are the-áminutes-áand data-ácustomer-áspend on the small cell and I hope Cisco will do something about this via (lobbying) legislation to make all transactions with small cells free. -áThat is a huge market and killer app for small cells. -áChambers wants to own this market from cells to-áback haul.
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