Chinese Infocom Tech Giant Huawei Steps Into North America Business Sector with ASI

Huawei (News - Alert) Technologies consistently ranks among the top five telecommunications manufacturers worldwide yet the massive Chinese company has faced scrutiny and barriers to expansion because of fears over security threats. A 2010 deal in the UK required the company to establish a “Cyber Security Evaluation Center” in England, expressly to examine and prove that equipment it sells in the UK cannot be exploited by spies and cyberthreats.

This week Huawei inked a deal with ASI to distribute its portfolio of IP network infrastructure, unified communications and collaboration, and storage solutions to American customers. It’s a big step into the American market for the Huawei, who has been opposed in deals to buy American tech firms in trouble.

A profile in The Economist explores how both Huawei and China-based competitor ZTE (News - Alert) have faced scrutiny from US House of Representatives’ committees on intelligence and foreign investment, and opinions are mixed. Some leaders seem to feel the fears amount to cold war paranoia while others are firm about the threat of compromised equipment from manufacturers operating under oppressive regimes.

Both what’s known and unknown about Huawei’s founder, Ren Zhengfei, is at the center of some concerns. After retiring from the Chinese People’s Liberation Army he founded Huawei 1987 with a tiny sum of startup capital equivalent to about $5000 USD. He has served on the board of the National Congress of the Communist Part of China and grown his company by practicing savvy business, avoiding competition from the big name Chinese competitors by focusing on small, underserved markets at home and overseas. Huawei’s success in India, Africa and the Middle East is enviable, mostly accomplished through tenacious work building networks where few others bothered to spend time. Now the company has a strong foothold in Europe with plans to get to work on a 5G network. Yet lack of information on Zhengfei’s exact investment in the company, as well as the internal leadership structure, have left too many questions unanswered from some to be comfortable. Recently Zhengfei’s daughter, Cathy Meng, took over as CEO and the public face of the company.

The North American market has been the one nut Huawei hasn’t been able to crack however, so its agreement with ASI is an NBA-sized foot in a valuable door. In England Huawei’s willingness to work with the British intelligence agencies has quelled fears and led to increasing sales. But even if Huawei worked with US intelligence the consumer market – already atwitter with fears of our own government spying on us – could walk away. Starting with the distribution of the enterprise line of business information communication technology could cement the relationships the company needs to grow in the Far West.