Huawei plans to heavily invest in IT infrastructure

Huawei plans to heavily invest in IT infrastructure

PanARMENIAN.Net - China's Huawei Technologies Co. aims to boost its revenue from its IT infrastructure business—such as computer servers, storage and data center management—tenfold to $10 billion in five years, the company's top executive said, according to the Wall Street Journal.

After becoming one of the world's largest suppliers of networking gear for telecommunications carriers, Huawei has been expanding aggressively for the past few years as a provider of IT infrastructure for government agencies and corporate clients, taking on established Western players like Hewlett-Packard Co., Cisco Systems Inc. and EMC Corp.

"We will heavily invest in this area," said Eric Xu, Huawei's acting Chief Executive, in an interview with the Journal on Tuesday, Sept 16.

Huawei is investing $600 million this year in its IT products and services business, and it will spend more next year as the business continues to grow, Xu said, declining to disclose the amount.

The IT infrastructure business is still a small part of Huawei. Last year, the telecom carrier network business, Huawei's bread and butter, accounted for about 70% of the company's revenue, which stood at $38.9 billion. Its revenue from the IT infrastructure business was just $1 billion last year.

Still, Xu said Huawei sees bigger potential growth in the market for data centers and other IT services in coming years than in the telecom equipment market.

In China, Huawei already provides many banks with products and services for their data centers. Huawei's data center business clients also include Alibaba Group Holding Ltd., which is expected to go public this week in the U.S. in an initial public offering that could raise as much as $25 billion.

Huawei sees a "huge market" in the financial-services sector in China—not just banks but insurance firms and brokerages, Xu said.

Xu was attending Huawei's annual cloud-computing conference in Shanghai, where the company's executives give presentations to clients, suppliers, analysts and the media about its IT infrastructure business.

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