Huawei channel boss: The world's biggest vendors are hurting

Chinese vendor challenges UK partners to grow services capabilities as it continues fight against incumbent giants

The most established vendors are struggling to keep up with changes in IT as cloud and Internet of Things (IoT) adoption accelerates, according to Huawei's UK channel director Michael Rae.

Speaking at Huawei's 2017 partner conference Rae outlined Huawei's immediate plans for its channel in the UK, including further investments to improve its delivery times and training resources.

Huawei currently has around 300 partners in the UK and Rae challenged them to improve their level of services certification around IoT and cloud, accusing other vendors looking for a quick-fix solution by bolting on additional products for partners to sell.

"We're seeing a real shift in the traditional IT market and what I'm hearing is that shift is really hurting some of the big established vendors," he said.

"They'll have to adapt to that, and many of them are adapting with an ‘attached' strategy. They're attaching licenses that you (partners) now have to sell, they're attaching services that you have to sell - that's going to affect your costing and will have a knock-on effect to customers as well."

To aid partners in reaching higher service standards, Huawei has invested in its training resources with a new webinar service and recently launched its online training platform Huawei University, which partners can also use to train customers.

Huawei also invested around $10m in its own Bucharest global services centre at the end of last year, but Rae said that the intention remains for partners to carry out services, not Huawei itself.

"We've made significant investments in our support function," he said.

"We invested $10m in our enterprise global service centre in Bucharest towards the end of last year and that facility provides tech support, network operation support, remote deployment support and partner support.

"Even though we're building out our partner support and technical support functions, we still see a split of service revenue today of 85 per cent in favour of our partners and I don't think many other established vendors can say that."

Strained supply chain

Rae acknowledged that partners have often been frustrated at Huawei's sluggish supply chain, but outlined what the vendor is doing to improve this.

Some 68 per cent of deliveries are now being made out of Huawei's European distribution hubs in the Netherlands and Hungary - while these hubs now carry around 75 per cent of Huawei's enterprise product portfolio.

"We know we're not perfect with delivery times but I can assure you that we're reducing them all the time and making the right investments to make them improve as time goes on," Rae said.

"We're making significant investments in our production facilities from a planning, forecasting and build perspective; so we're working hard to improve our lead times."

Cliff Fox, COO at Huawei partner Pure Technology Group, told CRN that the "calculated risk" to partner with Huawei a year ago has proved successful.

Fox said that the £20m-plus VAR currently has a pipeline of around £2.1m with Huawei, adding that he has been impressed with the improvement in Huawei's delivery times.

"For us it wasn't a gamble but it was a calculated risk," he said. "We'd done some business with Huawei but it was storage on our cloud platform and I was interested to see what else we could do. The equipment is fantastic; they've invested a tonne in R&D and it shows.

"We knew at the outset that in terms of their supply chain structure it was going to be a challenge and that we'd have to prepare our customers for lead times that were out of the norm, but they've put a lot of effort into that in the last eight months or so and that's showing now. Where things were 12 weeks, now they're two to three weeks which is better and testament to the effort they've put into the channel."

While Fox said the positives outweigh the negatives, he highlighted one criticism of Huawei as their marketing engine, which he argued is not as productive as it could be - putting pressure on Pure to build marketing campaigns itself.

"The thing that I find strange is that they have a good brand presence in consumer and consumer advertising, but there is a split between enterprise and consumer where they can't use each other's stuff which for me is a bit ridiculous," he said.

"The marketing needs attention and work, but we've compensated for that and put a really effective campaign together."