It also boasts a stronger consumer-facing approach. Huawei is the world's third-largest smartphone vendor. More recently, it has begun to focus on data center products and services. How much can Huawei disrupt an industry that has been dominated by traditional carriers?

Huawei has two groups of offerings for data centers within its "Enterprise" segment, which generated $2.5 billion in revenue last year. The first group is its IT product line, which includes servers, storage, and networking. The second group, called "Network Energy," offers power and cooling systems. The name of this latter division bears a striking resemblance to Emerson's Network Power division, a long-time leader in critical power systems.

Huawei's "Network Energy" business grew very quickly. In less than five years, it went from nothing to having complete lines of UPSs, in-row and rack cooling, power distribution, and racks.

Huawei is also betting on emerging markets such as data center infrastructure management (DCIM) software, where it faces a crowded vendor landscape. Despite only gradually expanding these product lines, Huawei has made a rapid start as a major manufacturer of containerized data center systems; so much so that it is likely to rank among the top vendors in the upcoming IHS containerized data center market analysis. These containers not only benefit from pre-designed and tested projects but also from low-cost labor when assembled in China.

The fact that Huawei has these two stakeholder groups for data centers makes it unique. Its presence in these groups puts it in competition with heavyweights like HP, IBM, and Cisco, while the DCI market is dominated by the likes of Schneider Electric, Emerson, and Eaton. In many ways, the IT and data center facilities sides are highly segregated, and the vendor landscape reflects this. Huawei should create sufficient scale for its operations, and it would be one of the few potential vendors to be a major player on both sides. In the relentless pursuit of companies to become "one-stop shops" for their customer bases, Huawei has quietly carved out a unique position.

Currently, Huawei's distribution is regionalized, with most of its data center sales coming from its domestic market in China or developing markets such as Africa, the Middle East, and South America. Penetrating mature markets, where brand recognition, long-standing reputation, and familiarity are difficult, presents enormous barriers to entry in an industry defined by risk aversion.
Entering the US market is a particular challenge. Aside from the arduous and expensive UL certifications that must be obtained, justifiably or not, there is political opposition to the sale and use of Huawei equipment in the United States. Facing a backlash from Congress, Huawei announced in late 2013 that it would be exiting the US market for telecommunications equipment. It is difficult to imagine that its data center equipment would fare any better. In all likelihood, Huawei will not gain access to the largest data center market.

However, if Huawei has the patience to make a long-term move, future growth in data centers will lie outside the United States and Western Europe. The opportunity will come from "connecting the next 4.4 billion unconnected people," a reference Huawei uses to highlight the fact that two-thirds of the world's population lacks internet access. This was a recurring theme at its analyst summit this year. Huawei views global connectivity as both a moral imperative and a smart strategic decision. We can only assume that its data center ambitions will follow this doctrine.
While its current presence in the data center market is limited, the scale and ambition of a company like Huawei mean it could be a formidable force in the data centers of the future.

By: Jason dePreaux. Director, Data Center and Critical Infrastructure Research