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Huawei gunning for Cisco in the enterprise

Jim Duffy | Oct. 6, 2011
Things are about to get a little hotter for Cisco in the enterprise market.

"If we took share from everyone but (Cisco), we wouldn't hit our number," Roese says. "The smaller players could potentially struggle in this environment. When there's true competition among the big players, the big players innovate and go after more of those niches filled by smaller players. It will be tough for the mid-sized players to meet the scale of the big players."

First, Huawei has its work cut out. It has to cultivate a roster of channel partners and convince them to push a Chinese brand with a checkered past - Huawei was embroiled in patent and intellectual property litigation with Cisco years ago. Huawei's Chinese roots also led to security concerns in the U.S. when it and Bain Capital looked to acquire 3Com years ago. That deal collapsed.

Huawei also has to Westernize its product portfolio and make the user interface a little more familiar to customers in North America, Roese said.

The Chinese and intellectual property issues are well in the past, Roese says.

"We're multinational with a significant presence in China and developing countries," he says. "Most of the global companies that exist have already gotten over their concerns about competing in a global ecosystem. Lots of verticals in the U.S. are open to a global company, an international company, selling them technology."

He says Huawei over the years has invested "huge resources" into building up its own intellectual property portfolio. It now owns 50,000 patents and has 120 leadership positions in standards bodies around the world, Roese says.

"Clearly, we recognize the value of intellectual property and put a huge amount of resources into making sure we were a have, not a have not, in this market," he says.

Roese is also confident that the economics of the Huawei channel program will entice partners, and that profit distribution will be "a little bit more equal" for all parties involved vs. competitive programs.

One area where Huawei will stay to the sidelines and let the dust settle is in data center fabrics. Huawei already has a unified fabric offering for carriers and service providers; but it's content to wait a bit before pushing it in the enterprise.

"The idea of a customer making such a radical shift in their data center architecture is such a high risk proposition for an enterprise CIO that this is going to take a long time to progress," Roese says. "Let the war happen, let the customer settle down, let the technology mature. Let competitors kill each other, learn what they did right or wrong. We'll be at a pretty good advantage especially when we're not losing the ability to penetrate the market."


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