Huawei enterprise-network biz revenue to grow 40% to $2.7 billion in 2013

Huawei Technologies expects 40 percent growth in enterprise-network business revenue this year to about $2.7 billion.

By 2017, Huawei aims to increase the segment’s revenue to more than $10 billion.

In 2012, Huawei enterprise-network equipment business generated $1.9 billion in revenue, up 26 percent from a year earlier and accounting for 5 percent of Huawei group revenue.

By contrast, 73 percent of the company’s revenue came from its telecom-gear business, while its mobile-handset business accounted for about 22 percent.

Huawei competes with Cisco, Juniper, etc.

Infonetics on Wednesday said Cisco, Brocade and Juniper top its enterprise networking vendor scorecard. Cisco leads this field by a wide margin with 6 out of the 7 criteria. There was a tie between Brocade and Juniper.

Huawei sees opportunities in enterprise-network equipment because the market is going through major changes, with more companies adopting cloud computing and bring-your-own-device policies. Potential growth is greater than the telecom network market, said William Xu, a Huawei senior executive in charge of the enterprise-network business.

Huawei challenges

One major challenge is building sales channels. Huawei is the world’s second-largest supplier of telecom equipment after Sweden’s Ericsson (ERIC), but selling network gear to corporate clients outside the telecom industry will require a whole new distribution network that relies on resellers who distribute Huawei products, The Wall Street Journal reported.

There are currently about 3,000 partners world-wide who resell Huawei’s enterprise-network equipment, and more potential partners are showing interest, he said.

On Thursday, Huawei announced a new switching product. Huawei said that the new software-programmable switches, which will be available to customers in September, can be upgraded through software updates, meaning that customers don’t need to replace them with new switches every time they want to add new functions.

William Xu, Chief Executive Officer, Huawei Enterprise Business Group, said “Huawei is committed to customer-centric innovation and open collaboration with the industry, and leveraging our 10 years’ experience in enhancing IP network capabilities to best meet the needs of our customers. With the launch of industry’s first agile network and agile switch that focus on service efficiency and user experience, I am confident that we will change the future of next-generation enterprise networks.”

Huawei is spending $600 million this year on research and development for its enterprise network equipment, up from $500 million.

Huawei’s enterprise-network business currently generates roughly half of its revenue outside China, and its strong overseas markets are in Europe, Latin America and Asia.

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