Industry Voice: Win Together: Huawei's Ecosystem Partners Grow from 500 to 28,000

Huawei Enterprise Business Group’s Vice President of Partners & Alliances discusses how their commitment to working closely with channel partners has delivered consistent sales growth and a sustainable ecosystem.

clock • 16 min read
  • Share Success

In the past, Huawei has achieved success in direct sales, but we require our employees to change their mindset to focus on creating shared success with partners. In any cooperation, employees should take the partner's perspective into consideration, extending the relationship beyond simple sharing of profit and loss. The only way for Huawei to succeed is for partners to succeed as well, necessitating a mutually beneficial relationship.

To turn this into reality, Huawei's partner policies are taken very seriously indeed, to protect Huawei's brand image and reputation, and ensure the sustainable growth of the company. In particular, we prohibit arbitrary deduction of incentives for partners, and we require employees to not make promises lightly. Indeed, every promise must be fulfilled and partners should receive all the incentives they deserve. There are strict disciplinary actions for individuals failing to keep promises or for poor behavior.

  • Maintaining a Fair, Just, Transparent, and Simple Approach

Huawei adheres to principles of fairness, justice, transparency, and simplicity in every collaborative partnership. We have teamed up with partners in order to establish a just market order that plays by fair market rules, to create a healthy, harmonious, open, and mutually beneficial partner ecosystem.

Huawei continuously seeks to optimize its IT systems, including management systems, the ‘e + partner system' — which is used for procedures such as partner registration — and online transaction platforms. By simplifying management and increasing a partner's authorization to access Huawei's materials, Huawei improves the operational efficiency and service security of the ecosystem, making transactions with partners more convenient.

Four Measures: PSEE (Profitability, Simplicity, Enablement, Ecosystem)

Huawei released its future-oriented channel architecture and channel policies in 2012, and they have been frequently updated based on the business development of our partners and their feedback. To ensure the stability of the overall framework, in 2020 Huawei will further optimize its ecosystem partner policies related to business outside of China, based on four measures:

  • Profitability

In 2019, we canceled the sales rebate threshold, which means partners are now rewarded for every dollar they earn. As a result, there was an 80 percent year-on-year growth in the number of partners who received incentives, with the total incentive amount distributed nearly doubling over the same period. In 2020, Huawei will maintain the stability of the channel partner incentive framework and expand the scope of qualifying products, to include standalone software as well. Partners will also receive service content support in accordance with their star level. With a higher star level, partners are entitled to more authorization and more benefits. Diversified special incentives such as capability rebates and Business Incentive Programs (BIPs) will be introduced to motivate partners to pursue more ambitious goals.

  • Simplicity

Huawei has been continuously simplifying policy and process execution. Over the years, partner certification requirements, rebate capability appraisal, and the Market Development Fund (MDF) and Joint Market Fund (JMF) have all been simplified. Our partner policies are now easier to remember, understand, and implement — facilitating Huawei's cooperation with partners.

In addition, Huawei will build a partner policy center based on the ‘e + Partner' platform, to provide partners with more transparent and timely policy information, clearly communicating certification policy requirements, the various incentives available, and program solutions. In 2020, we will release a list of products that partners may get rebates on to improve policy transparency and make incentives easier to predict. We will allow partners to independently apply for and accept MDFs to accelerate the execution of marketing activities and make Huawei's entire business process visible to partners.

  • Enablement

Huawei will raise the capability requirements for both pre-sales and post-sales for core partners. But Huawei will also increase capability rebates and provide free training and exam vouchers that match the partner type — motivating partners to invest in improving their capabilities. In 2020, Huawei will launch Huawei Certified Pre-sales Professional (HCPP) certification for IP and storage products, to help partners gain in-depth knowledge about relevant products and acquire the practical skills needed to provide independent customer guidance, deliver scenario-based solution design, and conduct Proof of Concept (PoC) tests. We have also extended the availability of MDF and JMF to support global partners, solution partners, and carrier partners in their business development. We want our partners to reap the benefits of upgrading their capabilities to deal with the challenges of digital transformation.

  • Ecosystem

Huawei has established the Huawei ICT Academy Development Incentive Fund (ADIF) for 2020, to drive the development of the Huawei ICT Academy, support its training and operations, and motivate trainees to obtain Huawei certifications. Meanwhile, ADIF will increase awareness for the Huawei ICT Academy brand, strengthen cooperation with educational communities, and develop technical talent for Huawei, with talent and the Academy brand becoming a point of strength for the company. In the future, Huawei will also attract more ecosystem partners through a series of favorable policies, ranging from the Joint Solution Development and Marketing Fund and the Global Partner Incentive Fund (GPIF), to improving satisfaction levels for service delivery and making the MDF available to more partners.

In the era of ecosystem collaboration, it is more important to manage cooperation than to manage competition. With this in mind, Huawei will continue to increase investment in building a diversified ecosystem.

Five Advantages: Brand, Rapid Growth, Continuous Innovation, an Extensive Product Range, and Security Compliance

Although Huawei has been in the enterprise business for less than 10 years, and still has much to learn from industry leaders and competitors, Huawei has several distinct advantages.

  • Fortune Global 500 and Interbrand's Top 100 Best Global Brands: Huawei's Brand Value Benefits Partners

As a leading global ICT solutions provider, Huawei has been growing rapidly and steadily by offering cutting-edge technologies and exceptional services. Huawei was listed in the Fortune Global 500 index for the first time in 2010, and it has risen in the ranking year after year, becoming the world's 61st largest company in 2019. In 2015, Huawei also became one of Interbrand's Top 100 Best Brands , ranking 74th in 2019. Throughout this period, there have been no major ups and down and no impetuous attempts to ‘leap forward;' instead, Huawei has maintained smooth and steady growth.

  • Continuous and Rapid Growth, Driving Strong Growth for Partners

Over the past five years, year-on-year, Huawei's revenue has maintained a Compound Annual Growth Rate (CAGR) above 20 percent. Despite facing some adversity in 2019, Huawei's annual revenue is still expected to exceed CNY850 billion (US$123 billion). 

Huawei's robust growth means that the business growth of its partners is also assured. By the end of 2019, enterprises in more than 700 cities around the world, including 228 Fortune Global 500 companies, had selected Huawei as their partner in digital transformation.

  • Long Term Investment in Technical Innovation and Product Innovation Helps Partners Build Leading ICT Solutions

Huawei continues to focus on its strategy of investing in the R&D of telecom networks, cloud data centers, and smart devices. To remain at the forefront of the industry, we will focus on innovations for cutting-edge technologies that are driven by actual customer needs. Huawei has more than 96,000 R&D engineers worldwide, accounting for approximately 50 percent of the total workforce. In 2019, investment in R&D is expected to reach CNY120 billion (US$17 billion), of which roughly 15 percent was invested in cutting-edge technology research. In addition, Huawei has joined more than 400 standards organizations, industry alliances, and open source communities, holding more than 400 key positions. A total of nearly 60,000 proposals have been submitted by Huawei, with over 5,000 standard proposals submitted in 2019 alone. Over 87,000 patents have been granted to Huawei and over 90 percent of those are invention patents.

  • An Extensive Product Range Enables Partners to Create End-to-End One-Stop Solutions and Services for Customers

Huawei's products and solutions cover fields such as mobile network, broadband, IP, optical network, network energy, telecom value-added services, and terminals. Huawei EBG integrates multiple new ICT technologies, including cloud computing, AI, IoT, big data, converged communications, video, and Geographic Information System (GIS), and uses the ‘platform + ecosystem' strategy to provide high-quality solutions for both government and enterprise customers, supporting digital transformation. In 2020, we will carry out co-marketing activities with partners for our star products including next generation AirEngine Wi-Fi 6, OceanStor Dorado flash storage, and the Uninterruptible Power Supply (UPS) + SmartLi power solution (a lithium battery-based energy storage system solution) and increase resource input for partners to achieve results that benefit both parties.

  • Security and Compliance Have Been Top Priorities for Over 10 Years, Ensuring the Healthy Development of the Partner Ecosystem

Huawei prioritizes network security over its commercial interests. Additionally, Huawei adheres to strict business ethics, all international conventions, and the laws and regulations of each country it operates in. Huawei's management team has always adhered to the core philosophy of "compliance with international laws and regulations" and regards it as the cornerstone for Huawei's global operational compliance. The article titled "Huawei Compliance System Safeguards Partner Ecosystem Development" (pp. 72-75) describes in detail Huawei's initiatives and achievements in terms of network security and a compliance framework over the past 10 years. It covers the building of the compliance management system as well as trade compliance, security and trustworthiness, anti-corruption and anti-commercial bribery policies, intellectual property rights, and trade secrets protection. These initiatives and achievements are all vital for the healthy development of the partner ecosystem.

In the intelligent era, EBG's targets are to integrate ubiquitous connectivity, a digital platform, and pervasive intelligence, to build the foundation of digital China and be positioned at the core of a digital world.   In the era of intelligence, the key to a mutually beneficial ecosystem is to enable everyone to use their own strengths to create a whole that is greater than the sum of its parts. Huawei will continue to evolve its ecosystem policies to expand the partner ecosystem, help partners achieve their goals, and provide better support for partners. We will dedicate our efforts to the development, cultivation, support, incentives, and compliance of our partners. Ultimately, we will streamline partner management to build an open, cooperative, and mutually beneficial ecosystem, and strive to become the preferred supplier for digital transformation.

 

Frank Shen, Vice President of Partners & Alliances, Enterprise Business Group, Huawei Technologies, Co., Ltd.

Mr. Frank Shen now serves as Vice President of Partners & Alliances, Enterprise Business Group, Huawei Technologies, Co., Ltd., overseeing the management of global partner strategy and operations. Mr. Shen joined Huawei in 1997 and has worked in several representative offices both in and out of China. He holds a master's degree in electronic materials and components from Southeast University, and with more than 20 years of experience in market expansion and sales, he has served as country general manager, director of the commercial affairs department, and field office director of the channel business dept. He has also received Presidential Commendation on several occasions.

 

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