Huawei now #2 telecom supplier in the world

[David Farber <dave () farber net>]

Begin forwarded message:

From: Andrew C Burnette <acb () acb net>
Date: December 2, 2009 3:53:57 AM EST
To: dave () farber net, stan () colventures com
Subject: Re: [IP] Huawei now #2 telecom supplier in the world

Dave,

for IP if you wish.

It isn't innuendo that Huawei did in fact copy cisco products down to the pdf's of the manuals for them. Huawei settled 
the lawsuits and FTC actions with cisco some time ago regarding that very fact.

http://www.networkworld.com/edge/news/2004/0728huawei.html

Simply search the names and the word "copy" (or similar) and you'll readily find various pointers to the trails of 
evidence.

As for selling at a loss, well, the yuan has always traded at a rough 75% discount on the US dollar in the currency 
market for a long time as a matter of standing policy of China's central bank. That's another story entirely.

best regards,
Andy Burnette

Dave Farber wrote:
> Begin forwarded message:
> > *From:* Stan Hanks <stan () colventures com <mailto:stan () colventures com>>
> > *Date:* December 1, 2009 6:01:53 PM EST
> > *To:* <mailto:dave () farber net>dave () farber net <mailto:dave () farber net>
> > *Subject:* *RE: [IP] Huawei now #2 telecom supplier in the world*
> >
> > We use Huawei in several of our portfolio company networks. I’m going to try to answer what I can here, without 
> > crossing NDA boundaries…
> >
> >
> > When we started the process, some years back, there was heavy pressure from certain groups to discontinue our 
> > discussions. There were rumors, innuendos and broad hints that Huawei had in fact reverse engineered Cisco’s IOS and 
> > some of the line cards for the GSR. No one was ever able to demonstrate in an absolute manner that this had 
> > happened. My own use of the various CLIs were not a whole lot different from my experience with other manufacturers 
> > who had previously sought to emulate the Cisco CLI language to make configuring equipment a simpler matter for 
> > engineering professionals – an in-exact copy, close enough to be familiar, different enough to be frustrating.
> >
> >
> > There were also issues raised about the ownership, rumors that it was only semi-private and that it was in fact 
> > controlled by the Chinese central government. While this would have been interesting, I didn’t see it as being a 
> > “show stopper” in any way. Given that we were talking about private network placement, even if there were “bugging 
> > technologies” or the like it would not have been possible for any information so gained to have been exported to an 
> > interested party.
> >
> >
> > There were, and are, concerns about life cycle costs. When dealing with any vendor for mission critical equipment, 
> > you have to worry about what happens if they are unable to provide contracted support. I mean, aren’t there a whole 
> > lot of “no one ever got fired for buying Nortel” guys really, really sweating their futures right now?
> >
> >
> > I can’t comment on pricing other than to note that in every case where we asked them for a quote, the provided an 
> > apples-to-apples technology solution at a price point that provided a clear economic win. How, exactly, they did 
> > that relates to the concerns above about stability and unforeseen costs in the future. If they are a private 
> > company, and are selling at cost or a loss, then that’s non sustainable and sooner or later there will be 
> > repercussions. If they are being propped up by the central government, then that raises other issues. If, on the 
> > other hand, they’ve just figured out how to do this for a fraction of the cost of the Other Guys, then that’s a 
> > whole ‘nuther discussion…
> >
> >
> > In my dealings with their sales team and technology professionals, I was very impressed by what they brought to the 
> > table. They didn’t have “cutting edge” or “ahead of the curve” technology in the offered products, but the glimpses 
> > offered behind the scenes into their R & D efforts were pretty exciting, particularly against those previews I’d had 
> > from other vendors.
> >
> >
> > In the current US tech economy, we suffer greatly from tax changes made in the 80s which make it un-economic to fund 
> > basic R & D on a large scale. There will never be another “Bell Labs” because of the tax consequences. Instead, the 
> > only reasonable way to fund R & D is via acquisition – which is why you see so many early-stage tech companies being 
> > snapped up by “giants” such as Cisco, Microsoft, etc. Which, in effect, means that our VC communities are funding 
> > our future, and since they themselves have succumbed to “herd mentality” the odds of true break-away developments 
> > are in fact slim.
> >
> >
> > That’s where I see companies like Huawei as a “threat” – they don’t have those constraints, and are fully funding 
> > basic research and application research at an aggressive pace. We, simply put, aren’t. Which means, sooner or later, 
> > we’ll likely be licensing stuff from them instead of the other way around…
> >
> >
> > I would also point out this article from 2006, where a lot of the same issues are raised in a quote from the 
> > International Edition of Newsweek, 1/16/2006: 
> > <http://mountainrunner.us/2006/06/the_huawei_way_.html>http://mountainrunner.us/2006/06/the_huawei_way_.html
> >
> >
> > People have been bashing on them for a long time, and they’re still keeping pace with the best we have to offer. 
> > Maybe even outpacing us in the labs, where we won’t know until it’s too late.
> >
> >
> > Stan
> >
> >
> > ------------------------------------------------------------------------
> >
> > *From:* David Farber [mailto:dave () farber net]
> > *Sent:* Monday, November 30, 2009 11:26 PM
> > *To:* ip
> > *Subject:* [IP] Huawei now #2 telecom supplier in the world
> >
> >
> >
> >
> > Begin forwarded message:
> >
> >
> > *From: *Rahul Tongia < <mailto:tongia () cmu edu>tongia () cmu edu <mailto:tongia () cmu edu>>
> >
> > *Date: *November 30, 2009 11:31:30 PM EST
> >
> > *To: * <mailto:dave () farber net>dave () farber net <mailto:dave () farber net>
> >
> > *Subject: Re: [IP] Huawei now #2 telecom supplier in the world*
> >
> > *Reply-To: * <mailto:tongia () cmu edu>tongia () cmu edu <mailto:tongia () cmu edu>
> >
> >
> > Dave,
> >
> > I write as an "outsider" not selling any products, but with some industry knowledge and, some years back, extensive 
> > dealings with N. American industry. 
> > If Huawei is now so big/dominant, then why is that, a priori,  something "to worry about"? Is it not creative 
> > destruction, and something that benefits consumers?  The SingleRAN appears to be technologically advanced, or at 
> > least meeting consumer needs.
> >
> > Why it might be an issue would be (and I would like to know more on):
> >
> > 1) Are they inappropriately reverse engineering or otherwise using technology they shouldn't?
> > 2) Are the govt. ties to the level that it is unfair business practices?  Many European companies have strong govt. 
> > ties - one has to remember the Air France first class bugging to remember how bad things have been. 3) Are there 
> > hidden costs (lifecycle) that are unknown? The article claims the operating costs are lower, as opposed to just 
> > winning on upfront (bid) costs.
> > 4) Are they selling at a loss to create market share?
> >
> > If they are private, and not public (needing "regular dividends") then that is a financing option available to any 
> > company. OK, maybe not without some high-level "support" but that in and of itself is highly unlikely to account for 
> > 40-50% discounts.
> >
> > I get asked by a lot of developing country professionals/govt. officials about Huawei - "how come they are so 
> > cheap"? I don't have a good answer, and would like to understand better.  The two answer (private ownership and 
> > cheap labor) don't seem to be enough.  If it is "commodity" products, then the SingleRAN doesn't fit the bill. 
> > Rahul
> >
> > p.s. I won't bore folks with details, but I spent almost 3 years a "long" while back (10 yrs ago) during the boom 
> > designing a national-scale backbone - US entities didn't behave any "better" than what they would complain newbies 
> > behave like.  The periods of non-disclosure are over, but it's all academic at this point...
> >
> > On Tue, Dec 1, 2009 at 3:01 AM, Dave Farber < <mailto:dave () farber net>dave () farber net <mailto:dave () farber 
> > net>> wrote:
> >
> >
> >
> >
> > Begin forwarded message:
> >
> > > *From:* Richard Shockey < <mailto:richard () SHOCKEY US>richard () SHOCKEY US <mailto:richard () SHOCKEY US>>
> > > *Date:* November 30, 2009 2:47:18 PM EST
> > > *To:* <mailto:CYBERTELECOM-L () LISTSERV AOL COM> <mailto:CYBERTELECOM-L () LISTSERV AOL COM>CYBERTELECOM-L () 
> > > LISTSERV AOL COM <mailto:CYBERTELECOM-L () LISTSERV AOL COM>
> > > *Subject:* *Huawei now #2 telecom supplier in the world*
> > > *Reply-To:* Telecom Regulation & the Internet < <mailto:CYBERTELECOM-L () LISTSERV AOL COM>CYBERTELECOM-L () 
> > > LISTSERV AOL COM <mailto:CYBERTELECOM-L () LISTSERV AOL COM>>
> > >
> > > Well here is something else to worry about.
> > >
> > > <http://www.nytimes.com/2009/11/30/business/global/30telecom.html?ref=busines>http://www.nytimes.com/2009/11/30/business/global/30telecom.html?ref=busines
> > > s
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