April 23 Shenzhen
$10B target for Enterprise Segment revenues
This morning the 11th annual Huawei Analyst confernce got underway in Shenzhen with an audience of over 400 analysts and media in attendance. The morning started out with the usual vision of the future from Mr. William Xu, Chief Strategy Officer touching on the over arching theme of the event A Better Connected World. Connectivity should be added to the Maslow’s hierarchy of needs is indeed a bold statement from Mr. Xu who contended that connectivity is the new normal.
Mr. Xu continued to evangelize the ability of ubiquitous connectivity to be a new factor of production and competitive advantange. From connected wearable safety jackets used in Chilean mining operations to wirelessly enabled maternal healthcare in Africa to boosting university enrollment in sub-sharan Africa from current 6% and delivering education at half the price, to Starbucks generating $1B or 14% of revenue from mobile payments, the case was passionately made for connectivity as a key driver of societal change for the better.
The link or common ingredient in all these examples is Huawei’s Focus strategy to serve the unquenchable thirst for bigger, fatter, faster pipe in the worldwide market. However, the interesting detail or thematic I took away was Huawei’s desire to be as they call it “prime enabler of digital logistics.” With networks, infrastructure and modules in every classroom, movie theater, car, home, smart machine and devices, Huawei believes the explosion of demand for data will not only continue but accelerate. An equally important take away from the morning’s corporate track was that Huawei categorically rejects targeting or focusing on information and content while repeating its mantra of being the operator’s best friend.
While Huawei makes most of its revenue and profits from the carrier infrastructure business, what stood out for me this morning was its bold ambition to reach USD $10B in enterprise segment business before it considers itself a success. Noting many media have already claimed Huawei has succeeded in the enterprise segment, Huawei went to great lengths to note they are just getting started in winning the war for enterprise connectivity.
While the enterprise segment is a fledgling business at Huawei it already represents over 6% of revenue and posted an impressive 32% growth in 2013. Huawei continues to be in major investment mode for the enterprise focused on product driven improvements and problem solving. Success to date has been largely but not exclusively in China and Asia while expanded product development in data center solutions (more than 330 data centers worldwide) and a strong focus on cloud distributed data center solutions.
Huawei clearly see enterprise as a priority opportunity alongside its core business and the burgeoning LTE opportunity while growth in global service solutions is also expected to be very strong in 2014.
More to follow from our enterprise, network and device analysts.