On Huawei’s Pipe Strategy
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By Eric Xu, Executive Vice President, Huawei
Everything that we do will be about making the pipe wider in itself and ubiquitous in its
coverage, so that both our customers and ourselves have greater market opportunities to
seize.
Companies choose to position themselves differently in the global ICT (Information
and Communications Technology) ecosystem. Some focus on chips, some on basic
software, some on consumer devices, some on content, and others on service operation.
Huawei, however, chooses to focus on the pipe, which will direct the development and
consolidation of all our businesses.
And by pipe we mean a digital pipe system for carrying information, oriented by
technology and sector (the ICT sector). China’s water system makes for an effective
analogy. Network devices such as mobile phones can be thought of as the taps. When a
tap is open, water flows through, with information generated and consumed. Enterprise
networks are like the tributaries or urban water supply systems, while enterprise data
centers function as reservoirs. If these intermediate waterways are broad and
uncluttered, more water can be channeled into the main pipe, enabling more
information exchange and aiding the proliferation of information technologies in the
business world. Mobile and fixed broadband networks (MBB and FBB) are the
principal rivers, like the Yellow and Yangtze, while data center solutions function as
flood basins such as Dongting Lake. And finally, the backbone network is the Pacific
Ocean, processing and transmitting information that flows in from tributaries. Together,
these elements form a complete pipeline that encompasses the generation, aggregation,
transmission, and switching of information, all the way to an “Information Pacific.” In
this system, the services business also takes a part as they help manage, maintain, and
optimize the pipe network so that it runs smoothly.
IP Video and SDP (Service Delivery Platform) are enabling platforms that help
customers generate revenue from their information pipes, while BSS (Business Support
System) facilitates pipe operation and service billing. Network power systems get the
flow started and keep it moving. All have a role to play in this pipe network, making it
easier to manage and use so that customers enjoy enhanced revenue.
Huawei will focus unswervingly on the pipe. It is our primary area of future investment.
Some investments will be made in products and solutions that enlarge it, and support its
effective billing, management, and maintenance. We will not, however, invest in the
content itself (the water within the pipe).
At Huawei, we endorse the idea of “broadband for all.” We are working towards a
zero-wait customer experience that features high bandwidth and service diversity. We
also actively support and participate in the cloud and M2M ecosystem. Everything that
we do will be about making the pipe wider in itself and ubiquitous in its coverage, so
that both our customers and ourselves have greater market opportunities to seize.
Huawei’s pipe strategy is a focused one. For consumers, we only provide network
devices that generate and consume traffic; non-networked electronics are not our
business. For enterprises and industry verticals, we focus on ICT infrastructure and
position ourselves as a product provider; we will not develop industry-specific
application software. For carrier networks, our focus is architecture, from end to end, so
that a high-caliber pipe that channels surging traffic is achieved. The objective of
carrier network solutions is to deliver a zero-wait experience with high bandwidth and
diverse services.
Huawei has established three different business groups (BGs) to provide ICT solutions
to different customer segments – carriers, enterprises/industries, and consumers.
However, network devices, enterprise networks, carrier networks, and data center
solutions are closely linked and complement one another. Also, technologies used
across segments are vertically integrated and can all be traced to the same origin, the
digital logic design. Wireless technologies are used for both base stations on carrier
networks and handsets used by consumers, while IT technologies are applied to both
enterprise servers and specialized equipment (e.g., MSC and HLR) on carrier networks.
The integration and sharing of technologies makes it possible for us to deliver more
competitive products and solutions to each of the three customer segments, at a higher
return on investment and lower cost. From this perspective, there are two driving forces
that fuel our company’s development. One is customer need, which lies at the core of
every solution that we deliver, thus moving our company forward; the other is
technology, in that constant technical evolution brings a better experience and lower
cost, propelling the industry ahead. These two drivers are interdependent and
complementary; neither can be ignored.
Huawei is committed to building a pipe oriented towards technology and sector. We are
also committed to serving various types of customers that need such pipes. The world
we live in is ever changing, and so are our customer base and their needs. While carriers
will certainly continue to invest in the pipe, the Internet service providers may also
build their own large-scale pipe systems; enterprises and industry verticals will
accelerate their ICT investments as well.
Huawei continues to focus on the customer through the quality that we provide and the
services that we deliver, to all customers who need a pipe and can build a win-win
relationship with us.
Huawei’s pipe strategy is the company’s core, and the pipe business will remain our
focus. As the digital flood approaches, we commit ourselves to enhanced pipe capacity,
strengthened pipe enablers, and optimized pipe management, to deliver ever wider and
more ubiquitous pipes, and an even better user experience. Huawei is striving to build a
connected society with endless possibilities – a society where our life and work are
greatly enriched, made easier through communication.
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