Huawei Closing in on Cisco’s Dominance of Enterprise Networking Market + Infonetics Scorecard Ranks Other Vendors
Huawei Technologies Ltd (China) expects 40% growth in its enterprise-network business revenue this year to about $2.7 billion. By 2017, the company aims to increase the segment’s revenue to more than $10 billion. That’s a very steep climb from 2012, when Huawei enterprise-network equipment business generated $1.9 billion in revenue, which was only 5% of Huawei’s total revenue.
By contrast, 73% of the company’s revenue came from its telecom-gear business, while its mobile-handset business accounted for about 22%.
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’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. Huawei is spending $600 million this year on research and development for its enterprise network equipment, up from $500 million.
Read more at: http://infotechlead.com/2013/08/08/huawei-enterprise-network-biz-revenue-to-grow-40-to-2-7-billion-in-2013/
Scott Thompson of FBR on Huawei threat to Cisco: While Huawei Technologies Co., Ltd. has been unable to gain a
foothold in North America (due to the impact of the attached stigma from the stance of the U.S. House Subcommittee on
Cybersecurity), without the EU taking a firm stand with the U.S., we expect Cisco has more revenue at risk in China than Huawei has in the U.S.”
Excerpts follow from Infonetics’ Enterprise Networking and Communication Vendor Leadership Scorecard, which profiles and ranks the top 8 vendors of enterprise networking, network security, and communication equipment/software: Alcatel-Lucent, Avaya, Brocade, Cisco, HP, Juniper, NEC and Siemens Enterprise. Note that Huawei was not included in this vendor evaluation.
According to Infonetics Marketing Director Kim Peinado, the vendor rankings are based on actual data and metrics, including direct feedback from buyers, vendor market share, share momentum, financials and solution portfolio — eliminating subjectivity.
Infonetics reports that Cisco has the highest score and leads the rest of the field by a wide margin, giving them an adequate cushion to bolster against future score fluctuations in multiple areas. Cisco has the broadest product portfolio, the highest market share, the strongest financials, and the strongest overall brand. Cisco’s key weakness is market share momentum due to a slight decline in market share in 2012.
ENTERPRISE SCORECARD HIGHLIGHTS:
. Aside from #1 Cisco, for the most part vendor scores fall into a narrow range; a notable exception is financial stability, where there is significant variability in scores
. Brocade strongly improved its ranking this year (tied with Juniper for 2nd place) due to improvements in financials, market share momentum and buyer perception
. Juniper maintained its score from last year, as improvements in solution breadth and buyer perception were offset by weaker financials
. HP ranks 2nd in 5 out of 7 criteria but slid into 4th place overall due to slowing market share momentum and weakening financials
. The core business of the other 4 vendors analyzed in the report – Alcatel-Lucent, Avaya, NEC and Siemens Enterprise – revolves around the PBX market, which has been slow to recover from the recession, limiting their financial stability and growth prospects
. That said, Alcatel-Lucent, Avaya and Siemens offer some of the most extensive product portfolios, and NEC’s early work on software-defined networking (SDN) could raise its technology innovation scores next year
“More than 100 vendors are vying for a piece of the $50 billion enterprise networking and communication infrastructure market, but only 8 have a diverse product offering and consistently capture more than 1% market share,” observes Matthias Machowinski, directing analyst for enterprise networks and video at Infonetics Research and lead author of the report. “Our enterprise scorecard helps buyers make accurate comparisons among vendors based on commonly-used purchase criteria and identify which vendors are most suitable for their organization’s specific requirements.”
Machowinski adds: “Cisco leads this field by a wide margin, claiming a perfect score in 6 out of the 7 criteria that we measure in our enterprise vendor scorecard. But the battle for 2nd place remains heavily contested, as witnessed by the tie this year between Brocade and Juniper.”
ABOUT THE SCORECARD:
Infonetics’ annual enterprise vendor scorecard evaluates the leading enterprise networking and communication equipment vendors using criteria that are commonly used by buyers to select vendors, demonstrate success in the marketplace, and position a vendor for success. The matrix rankings are based on 7 criteria including market share; market share momentum; financial stability; solution breadth; technology innovation; product reliability; and service and support. Companies ranked: Alcatel Lucent, Avaya, Brocade, Cisco, HP, Juniper, NEC and Siemens Enterprise.
A note on excluded vendors:
·Huawei reported over $1.8B in total enterprise revenue last year but does not break out how much of that revenue comes from enterprise networking and communication infrastructure. Once Huawei starts providing revenue break-outs and meets the threshold for inclusion, we will add Huawei to future scorecards.
To buy the report, contact Infonetics: http://www.infonetics.com/contact.asp
GET THE SCORECARD FREE:
Qualified businesses and service providers can download Infonetics’ 2013 Enterprise Networking and Communication Vendor Leadership Scorecard – worth $500 – free of charge for a limited time at