Huawei: No Big Acquisitions Coming Up
Giant Chinese IT vendor Huawei Technologies reportedly will spend the next several years focusing on its management structure and growing the business rather than making any significant acquisitions.
Chen Lifang, senior vice president in charge of Huawei’s external relations and one of 13 board directors, also told The Wall Street Journal that the company will not seek an initial public offering (IPO) for at least the next five years. The decisions were dictated internally by founder Ren Zhengfei and accepted by the board of directors, according to Chen.
“For the next five to 10 years, we will stay focused on internal management improvement,” Chen told the newspaper.
Huawei is the world’s second-largest telecommunications network equipment vendor, and is a significant global player in a range of other areas, from mobile devices to servers and other data center equipment. For the past couple of years, the massive company has been aggressively pursuing the U.S. market, with U.S. headquarters in Santa Clara, Calif.
Chen’s comments come after recent speculation that Huawei was one of a number of companies that could buy embattled smartphone maker BlackBerry, which has been hammered in recent years by competition from Apple’s iPhone portfolio and the long list of devices from such vendors as Samsung that run Google’s Android operating system.
In September, BlackBerry executives said a consortium led by shareholder Fairfax Financial Holdings was prepared to pay $4.7 billion for the company, but that the deal included giving BlackBerry officials until Nov. 4 to continue shopping the smartphone maker around. SAP, Google and Cisco Systems reportedly are talking with BlackBerry executives about buying parts or all of the company.
However, it’s in the networking space—including switches and routers—that Huawei is best known. The company sells its gear to more than 500 carriers worldwide, and is a growing presence in markets outside China. That includes Europe, where it is becoming a larger threat to the likes of Ericsson and Alcatel-Lucent.
Cisco CEO John Chambers last year said that Huawei was a more formidable competitor to his company than such traditional rivals as Juniper Networks and Hewlett-Packard. However, Huawei’s path into the U.S. networking market has been more problematic. U.S. lawmakers and other government officials last year said that Huawei and ZTE—due to their close ties to the Chinese government in Beijing—posed a national-security threat, a claim denied by both companies. That has made it more difficult for Huawei to break into the U.S. networking market in any significant way.
However, company officials still see the chance for significant growth in the United States.
"There is a big window [of opportunity] for Huawei in the U.S.," Jane Li, chief operating officer of Huawei Enterprise USA, told eWEEK in May. "Companies are looking for true options in networking that they have not had in years."
At the Interop 2013 show that month, Huawei officials launched ICT Nation, an effort to accelerate its push in the United States by building a community of tech vendors and channel partners that will help the company create broad strategies and solutions around the trends in enterprise data centers, such as cloud computing, mobility, big data and converged infrastructures.
Huawei will continue investing in R&D, where it spent $4.8 billion last year and where about half the 150,000 or so employees work, according to Chen. Huawei also will be focused on making management more streamlined and decision making faster, she said.