Huawei Gunning For Networking Market Leaders Cisco, HP And Friends

Huawei is using Interop, the networking industry conference under way this week in Las Vegas, to strengthen its position in the U.S. enterprise networking market. The Chinese networking giant is introducing CloudEngine 12800, a next-generation data center switch, and is announcing a distributorship agreement with Synnex to sell its portfolio of IP network infrastructure, unified communications, collaboration and data center products to enterprise customers in the United States. Topping it off, Huawei also intends to vie for a piece of the smartphone market in the United States.

Last year Huawei unveiled Huawei Enterprise Business Group, a U.S. subsidiary. In 2010, the company announced a distribution agreement with Synnex to sell network firewall, security routers, intrusion detection technology, and NAS and SAN storage hardware in a partnership called Huawei Symantec.

With global 2011 revenue of $32.4 billion, Huawei is within striking distance of industry leader Cisco Systems, at $44.8 billion. By other measures, it dwarfs Cisco: Huawei's corporate engineering staff is about 60,000 employees strong, close to Cisco's total employment of about 71,000.

While Huawei has long been selling into the service provider market, including wireless carriers, the new U.S. business is called the Enterprise Business Group because it's making a particular focus on serving the enterprise market. Many of these enterprises are building networks similar to those operated by carriers, says John Roese, senior VP and general manager of Huawei R&D.

"Many enterprises are adopting ... next-generation data centers, cloud architectures, the use of mobile networks and broadband mobile networks. Those are all intrinsically carrier technologies moving into the enterprise," he says.

The CloudEngine 12800 is the latest release in the CloudEngine 12000 series. It will deliver switching capacity of up to 48 Tbits per second (T bps), which Huawei claims is three times the industry average for such switches, and bandwidth of 2 Tbps, which it claims is twice the industry average. The 12800 switch, as well as the 5800 and 6800 top-of-rack (ToR) switches, support the full range of Ethernet connectivity speeds: 100 Gbit Ethernet, 40 GbE, 10 GbE and 1 GbE.

Although Huawei was represented at the Interop conference in New York City last fall, the Las Vegas Interop is a bigger event, says Roese, and Huawei intends to make a bigger splash. The company believes there's still unmet demand to be served there.

"The beauty of the enterprise space is that there is a lot of room for competition," says Bill Plummer, VP of external communications at Huawei Enterprise, particularly for the sales channels, system integrators and other value-added resellers that would sell its products. "As we're entering the [U.S.] market, it's not so much with the intent to displace anyone but rather with the intent to meet demand."

That sounds a little modest--to say the least--to one industry analyst.

"No, it's a zero-sum game, where someone wins and someone loses," says Jon Oltsik, principal analyst at Enterprise Strategies Group, of the networking market. "Huawei will go after the SMB and small enterprise [space] first and, thus, compete with the likes of Dell, Enterasys, Extreme [Networks] and HP."

And while Huawei touts the specifications of its CloudEngine 12800 data center switch, Huawei is more likely to compete on price or on a combination of price and performance, he says.

"The company will try to knock off the most popular switching and routing features, but price will be the key differentiator," he says.

Huawei will also demonstrate telepresence systems to show that it's competing in the burgeoning field of unified communications, including videoconferencing equipment. Also, the company will show off a number of new smartphones it plans to introduce in the highly competitive U.S. market.

Its strategy is to offer more affordably priced smartphones for "customers who've been trapped into feature phones because of price points," says Plummer. Huawei's phones will run the Google Android mobile operating system; some will carry the company name, while others will be labeled for carriers. One model will sell for $129 without a contract, or $29 with a two-year contract with AT&T.

Interop 2012 runs through May 10 and is produced by UBM TechWeb, which also publishes Network Computing.