Huawei's enterprise business revenue to double

By Shen Jingting (China Daily)
Updated: 2011-03-03 10:54
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Company sets target of 10b yuan in Chinese market this year

BEIJING - Huawei Technologies Co Ltd, the world's second-largest telecommunications equipment maker, said revenue from its global enterprise business reached $2 billion last year and is expected to double this year.

In the Chinese market alone, the enterprise business revenue grew by 109 percent to 5.93 billion yuan ($902 million) in 2010. The company set a target of 10 billion yuan for the domestic market this year.

"Huawei is increasingly focusing on enterprise business. The number of global employees who specially work for the enterprise business sector will surpass 10,000 this year," Lu Jun, China market vice-president of Huawei Technologies Co, said in a news conference in Beijing on Wednesday.

Huawei made $34.17 billion in global contract sales last year, behind Telefon AB LM Ericsson.

Though the enterprise business sector contributes a small fraction of its revenue, Lu expects the figure to quickly rise in the near future.

"It (enterprise business) is a huge blue-sea market and will be the major profit growth engine for the company," he added.

Huawei's major businesses include providing services to telecom carriers, enterprise business and personal consumer business. Its product solutions in enterprise business include cloud computing, corporate communications and data center services.

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Yang Jingyu, a telecom analyst at Gartner's China office, said Huawei's strategy to embrace the enterprise business reflected the fact that the profit growth from selling equipment to telecom carriers is not attractive anymore.

"However, along with huge investment and the rapid growth of several industries in China, such as electricity and medical care, there will be a growing demand for enterprise business," Yang said.

"Huawei can grab market share in the corporate sector with its competitive price and advanced technologies. It is the same strategy as when it initially entered the telecom equipment industry," she added.

Cisco Systems Inc could be the biggest competitor for Huawei in both Chinese and overseas markets, according to Lu from Huawei. For example, in the domestic market, Cisco sells more data communication products for building up enterprise networks than Huawei.

Huawei has teamed up with Digital China Holdings Ltd, China's biggest integrated information technology services provider, to fight competition for data communication products.

Ren Zhengfei, founder and chief executive of the company, has pinned great hopes on cloud-computing technology - which is a basic part of the company's enterprise business.

"I hope that Huawei will overtake Cisco Systems Inc in the field of cloud computing in a very short time," Ren said at a Beijing conference last November.