During its European Analyst Summit in London, Huawei provided details regarding two crucial elements of its expanding market positioning: It outlined its intention to launch mobile devices and enterprise solutions. Although Huawei has been engaged in these activities in China for some time, it is a new and exciting step for its European strategy. Competitors should not underestimate Huawei’s ability to take business away from them in these areas.
Huawei’s mobile device range for Europe is small, but very effective. The company targets the low-end smartphone segment with a €100 device (Blaze), the mid-market (Vision), and high-end (Honour), in addition to a tablet (Media Pad). The marketing strategy is to position these devices as affordable, easy-to-use, and reliable (i.e., the “Volkswagen of the mobile devices”). All devices are touch, have fast processors, crisp screens, and retail at about €100 below competitors’ offerings. Timing is good for Huawei, given the relative weakness of the competitive landscape, especially RIM and Sony Ericsson. Initial customer feedback on sites such as Amazon.com reflects positive customer experiences.
The fact that Huawei has no consumer brand in many European countries should not be a great obstacle. Rather, Huawei could use this factor in order to involve its emerging customer base to build a brand using social networking and viral marketing. Traditional big-board advertising campaigns would be pointless: Nokia will dominate the traditional channels with its Lumia campaign in the coming months. The main channels for Huawei will be MVNOs like Fonic, consumer electronics outlets like Phone4U, as well as selected larger operators.
In a surprising move, HP and Cisco announced that HP will be reselling a custom-developed Cisco Nexus switch, the “Cisco Nexus B22 Fabric Extender for HP,” commonly called a FEX in Cisco speak. What is surprising about this is that the FEX is a key component of Cisco’s Nexus switch technology as well as an integral component of Cisco’s UCS server product, the introduction of which has pitted the two companies in direct and bitter competition in the heart of HP’s previously sacrosanct server segment. Combined with HP’s increasing focus on networking, the companies have not been the best of buds for the past couple of years. Accordingly, this announcement really makes us sit up and take notice.
So what drove this seeming rapprochement? The coined word “coopetition” lacks the flavor of the German “Realpolitik,” but the essence is the same – both sides profit from accommodating a real demand from customers for Cisco network technology in HP BladeSystem servers. And like the best of deals, both sides walk away thinking that they got the best of the other. HP answers the demands of what is probably a sizable fraction of their customer base for better interoperability with Cisco Nexus-based networks, and in doing so expects to head off customer defections to Cisco UCS servers. Cisco gets both money (the B22 starts at around $10,000 per module and most HP BladeSystem customers who use it will probably buy at least two per enclosure, so making a rough guess at OEM pricing, Cisco is going to make as much as $8,000 to $10,000 per chassis from HP BladeSystems that use the B22) from the sale of the Cisco-branded modules as well as exposure of Cisco technology to HP customers, with the hope that they will consider UCS for future requirements.
It’s been a few years since I was a disciple and evangelized for HP ProCurve’s Adaptive EDGE Architecture(AEA). Plain and simple, before the 3Com acquisition, it was HP ProCurve’s networking vision: the architecture philosophy created by John McHugh(once HP ProCurve’s VP/GM, currently the CMO of Brocade), Brice Clark (HP ProCurve Director of Strategy), and Paul Congdon (CTO of HP Networking) during a late-night brainstorming session. The trio conceived that network intelligence was going to move from the traditional enterprise core to the edge and be controlled by centralized policies. Policies based on company strategy and values would come from a policy manager and would be connected by high speed and resilient interconnect much like a carrier backbone (see Figure 1). As soon as users connected to the network, the edge would control them and deliver a customized set of advanced applications and services based on user identity, device, operating system, business needs, location, time, and business policies. This architecture would allow Infrastructure and Operation professionals to create an automated and dynamic platform to address the agility needed by businesses to remain relevant and competitive.
As the HP white paper introducing the EDGE said, “Ultimately, the ProCurve EDGE Architecture will enable highly available meshed networks, a grid of functionally uniform switching devices, to scale out to virtually unlimited dimensions and performance thanks to the distributed decision making of control to the edge.” Sadly, after John McHugh’s departure, HP buried the strategy in lieu of their converged infrastracture slogan: Change.