Day One of Huawei’s Global Analyst Summit almost always follows a similar trajectory. Most of the analysts are jet-lagged. Most of the presentations are very general in nature – going over company performance and speaking to the diverse background of the analysts in attendance. Most e-mail inboxes are bursting at their seams following an Internet-free day of travel to get to Shenzhen.
It’s a recipe for less than laser focus.
That’s a shame. While most analysts come to meet with Huawei in order to understand product strategies, understand product roadmaps and get their fill of steamed chicken feet, there’s value to be found in the company’s Day One presentations. The sprawling presentation (followed by Q&A) of its rotating CEO, Erik Xu, in particular was critical for understanding the company’s strategy beyond specific product portfolios. Key to that strategy is what Xu outlined as its “PIPE” strategy.
When I say “outlined,” I’m not talking about a passing reference. Xu made a point of noting that the PIPE strategy will guide investments and R&D going forward. That means that if you’re trying to understand Huawei, understanding the PIPE strategy is a good place to start. And if you’re trying to understand the PIPE strategy, two points sum it up fairly well.
– PIPE = Focus. In its 2013 Annual Report, Huawei noted a need for “focus.” For a company of Huawei’s size, the need to focus might seem strange. Yet, while it remains one of the few full-service telecom vendors (with a full suite of fixed and mobile gear), it recognizes that as the enterprise and consumer markets become a bigger part of its business, strategic focus will be important for avoiding wasted R&D or portfolio sprawl. Aligning around one strategic framework – the PIPE strategy – is all about helping Huawei maintain the success it has enjoyed to date.
– PIPE = More than Bandwidth. For Huawei, “PIPE” is not an acronym. It’s also not about bandwidth alone. Yes, a reference to “pipes” has traditionally meant a focus on access – fatter pipes meaning faster connections. For Huawei, however, PIPE is about connectivity more broadly. Put another way, it’s about connectivity ecosystems. This means that it includes delivering broadband access networks, but also the devices that benefit from connectivity and the cloud assets that will deliver services over those networks… not to mention all of the software necessary for intelligently managing and delivering those services.
This broad view of what PIPE means might not seem to lend Huawei much focus. What doesn’t fall under this strategy, you might ask? Xu provided one answer: calling out content and applications as a space in which Huawei would not play. We can imagine other answers, things like managed services out to the enterprise. The only certain answer, however, is “time will tell” how Huawei’s vision of PIPE will evolve, though it’s likely to remain broader than the classic concept of communication pipes – smart, dumb, or otherwise.