Huawei and Cisco
's direct confrontation in the enterprise market
After
obtaining good results in
the operators and terminal market, Huawei
began to use "assassin's mace" in enterprise market. August 8, 2013, Huawei's
business department suddenly announced that its world's first switches S12700
(fifth generation), designed to meet the cloud computing, Internet of things,
big data such as required.
Prior to the enterprise network equipment market is dominated
by U.S. companies such as Cisco,
But
this time , Huawei's new generation of switches has advanced technology than
the Cisco nearly a year, this was quite
a shock for the whole industry . Obviously, Huawei and Cisco will
commence confrontation , face to face .
Compared with traditional switches,
agile switch is
fully programmable architecture, any user's needs
can be achieved through
software upgrades and it is worth noting that the function of the traditional switch
is immutable.
It's like the difference between functional phones with smart
phones, smart phones can upgrade software directly , along with the popularity of smart phones, after all the functional phone
is going to withdraw from the market.
"said by Huawei's enterprise business BG CEO , XU wenwei. He
also said that the new generation switches use the Huawei self-developed chip , named "ENP
", so Huawei is full of confidence
with this product .
This shows the ambition of Huawei
to gain the switch market. According to third-party statistics, Cisco's
share of the global switches market is as high as 58.8% in the first quarter of
this year,, while Huawei's
share is only 3%. Mr Xu expect that the next-generation
switch will help Huawei to enhance two points of market share.
It is also
because of Cisco's dominance
in the switch market, Cisco does not have enough power to break the current market
structure and business model.
In accordance with the Cisco 's consistent
business model, Cisco always develop new chips a few years ago, at the same
time submit various industry standard, than launching products, while the other
companies which has no ability to developed new chip can only waiting for the commercial
chip come out and then they begin to develop new products. but at that moment
they are already behind the market
leader.
Last year, Huawei 's enterprise network
equipment revenue is $1.9 billion, increase 26% from a year earlier, its proportion
of total revenue in Huawei group was 5%. In contrast, 73% of Huawei's revenue from telecommunications
equipment business which accounted
for 22% of the mobile phone business revenue. Enterprise network device, by contrast, is
still a in the initial period of the business. But the report predicts, the
proportion of enterprise mobile office will reach 35% in 2013, there will be
billions of people enjoy the convenience of mobile office, and the size of the
global data center network equipment market will exceed $30 billion. Obviously,
Huawei also don't want to miss this delicious "cake".
Mr Xu said, enterprise network business
revenue this year is expected to increase 40% to $2.7 billion, domestic and
international operations 's revenues will increase nearly 40%. by
2017, Huawei's goal
is to enhance enterprise network revenues to more than $ 10 billion.
It is reported that Huawei's R & D spending on the
enterprise network equipment is $ 600
million in this year , higher than last year's $500 million,
and this number will continue to grow. "We have 150000 employees,
including 70000 R&D staff , we are really used technology to meet the wave
of mobile Internet."
However, Cisco gains more than 55% of
income comes from the United States, but because of the "out of thin air "
questions and accusations in the U.S. market, Huawei 's income in the us
market is very little, which means
that if Huawei enterprise
business want to scale beyond Cisco, there is quite
a distance.
References:
http://finance.sina.com.cn/roll/20130809/141016400777.shtml
http://www.yicai.com/news/2013/08/2925281.html
By YUAN Peng
Huawei and Cisco would be most successful idea with enterprise market. thanks for posting.
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