It’s been five years since I last interviewed Huawei and in that time its relationship with U.S. policy makers hasn’t improved. The U.S. imposed a slew of new restrictions on the company under the Trump administration, then President Biden threw a few more on top of the pile.
Now, we have the Neutralizing Emerging Threats from Wireless OEMs Receiving Direction from Kleptocracies and Surveillance States Act, which somehow has been abridged by Congress to the NETWORKS Act (the actual abbreviation is NETWORKASS, which works at a couple of levels).
The main justification for these bans by the U.S. — and its poodle, the U.K. — is supposedly that the Chinese government might use Huawei equipment as a platform for commercial espionage. (Oddly, the fact that 70% of the Congressional lawmakers responsible for mandating sanctions against China’s Huawei use iPhones made with Chinese components by Chinese citizens at a Chinese company in China doesn’t constitute any risk, at all).
Huawei isn’t particularly bothered by the bans.
“To be honest our ability to do business in the United States is not a particular concern of ours. We want to focus on those countries in the world that want to do business with us,” Andy Purdy, Huawei’s U.S.-based chief security officer, told me in an interview last week.
There’s good reason for the company’s insouciance. Even by the standards of Congress, many of whose members behave as if they have the intellectual capacity of a house cat, or loofah, America’s policy towards Huawei is spectacularly ill-advised.
The U.S. is a huge market, but it’s still dwarfed by the global economy as a whole. To paraphrase Douglas Adams, “The world economy is big. You just won't believe how vastly, hugely, mind-bogglingly big it is.” And this fact has been lost on America lawmakers with their sanctions-based political strategery.
By banning Huawei in the U.S., Congress has focused the company on selling to the rest of the world.
Over the last two decades I’ve seen how that’s playing out first-hand on trips to Rwanda, Angola, the Democratic Republic of the Congo, Saudi Arabia, Chile and India. Everywhere I go I see two things: Huawei offices and Huawei radio masts.
The U.S. attitude to these places is myopic. (We don’t sell in Luanda. So what?”). The ‘so what’ is that, unlike super-saturated European and North American markets, these countries are where the growth is coming from, long-term.
And U.S. strategy is backfiring especially badly in the 5G market. As a country, we don’t have a vendor that sells the full 5G portfolio, top to bottom, from apps to infrastructure. Huawei, in contrast, owns more 5G patents than anyone else in the world. (If you work for Huawei or, for that matter, Ericsson, the prognosis for your business is pretty awesome right now).
Sleeper Cloud
Now, Huawei is looking to extend its global advantage into cloud, with a “there when you decide you need it” tactic of building cloud-native infrastructure around the world before its even been ordered.
“We’re building [cloud-native] avalability zones in a number of regions so that when companies there are ready to bring full cloud computing power directly to the edge they can do so,” said Purdy. “It’s a form of plug and play.”
The logical end point to America’s current blunt force foreign policy in a multi-cloud world in which networks have to share information is that we end up forcing countries and companies choose between cloud solutions from the U.S. and its allies or from China. And Huawei is setting itself up to win those decisions.
What’s going on here? Why is the U.S. getting this so wrong? A lot of it is politics, obviously.
Welcome, global citizens, to The United Hates of America where China-baiting is considered an easy vote getter by U.S. administrations on both sides of the aisle.
But corporate culture is another factor. In the U.S. we like winning bigly, but we also want to win quickly. U.S. companies are focused on meeting financial targets for the next quarter. China’s Huawei is happy rolling with a plan measured in decades.
As one of the largest suppliers of cloud and cloud-native 5G, Silverlinings will be covering Huawei’s activities in detail, and that coverage will include inconvenient truths like the fact that no company has done more than Huawei to close the global digital divide. As for our own country, U.S. lawmakers need to be careful they don’t end up sanctioning us into our own Huawei-free cloud backwoods.
Dreaming of the day MWC is over? So are we. Register for our Cloud Cover virtual event from March 14-15 here.