UK Intelligence and European Commission Look at Huawei More Closely - IBM as a Partner

British Telcom (BT) has been declining to comment on whether it had received any requests from US officials to stop doing business with Huawei.

Nonetheless, on Friday, a United Kingdom Parliament committee said that it is performing an investigation about  Huawei's business in the UK after governments from Australia and Canada expressed concerns.

The UK Parliament's intelligence and security committee is examining the relationship between Huawei and the UK firm BT.  They are  "reviewing the whole presence of Huawei in regard to our critical national infrastructure and whether that should give rise for concern" according to an article in the Guardian.  Recently, Huawei had announced their intentions of spending almost $2 billion in the UK, including moving into a new 140k square foot building in Reading and plans to increase employment from around eight hundred to about fifteen hundred.  Victor Zhang, chief executive of Huawei Technologies UK, has stated “This move marks the beginning of an exciting new period of development for Huawei in the UK.”  However, this was before the investigation announcement from the intelligence and security committee. 

In March, The Australian Financial Review wrote that Huawei had been banned as a supplier for the $37.4 billion Australia Broadband Network after concerns were raised about the potential security implications.  Huawei, as one would suspect, has been calling this political. 

On the European front, European Trade Commissioner Karel De Gucht has been collecting evidence for a potential anti-dumping or anti-subsidy case against both Huawei and ZTE over subsidies.  The European Commission has suspicions that these two companies have been receiving   receive illegal state subsidies to undercut rivals in Europe. 

Huawei and ZTE are the world’s second and fifth largest manufacturers of wireless telecommunications gear.  Huawei has    many of the biggest telecommunications companies in Europe as it customers.  They include BT and Vodafone in the UK,   Telefónica of Spain, and Everything Everywhere, a partnership between France Télécom and Deutsche Telekom in Britain.  Huawei had European sales of over $3.7 billion last year. They employ about seven thousand people in Europe. 

Huawei spokesperson Roland Sladek   has started, “Europe is almost like a second home market for us.”  Their reception in this is becoming a little chillier.

ZTE is another story.  Cisco terminated a technology relationship with ZTE  in July.  They also  terminated their sales partnership with ZTE  in early October   after an investigation showed  that ZTE had sold Cisco branded networking gear  to Iran.  Iran is under ban from the US government  from  receiving this and other  technologies  from US firms.

IBM as a Key Huawei Partner

An  October 10 Wall Street Journal article,  "Huawei's Ally, IBM", discusses   how IBM has been working closely with Huawei since 1997.  This has included teaching management techniques (R&D, supply chain and financial management),  packaging its technology into Huawei products, a 2000 initiative to jointly develop networking gear, and most recently, advising Huawei on its expansion into selling smartphones and tablets.  Consumer products such as smartphones contributed 21% of Huawei's $32.4 billion in revenues last year. Huawei  announced a strategic partnership with IBM Global Business Services in February. Without IBM, "We could not have had the Huawei of today" stated Charles Ding, Huawei senior vice president for the US. Other companies Huawei has hired as consultants include Accenture, Boston Consulting Group, PrecewaterhouseCoopers, Mercer, and Hay Group.

To read more about Huawei -
 http://kensek.blogspot.com/2012/10/us-intelligence-report-dont-trust-huawei.html

Sometimes You Have to Pick Your Partners Carefully- Huawei

October 5 addendum - "60 Minutes" to have story on Huawei on October 6
 http://www.bizjournals.com/dallas/blog/2012/10/huawei-on-60-minutes-sunday-night.html

Interesting August 27 article (and video) by CNET, “Inside Huawei, and the Chinese tech giant that’s rattling nerves in DC”.  Huawei is a $32 billion technology company, with 140,000 employees worldwide  (including Silicon Valley in California) and the holder of over 50,000 patents.  A US congressional committee has been having ongoing discussions with the organization because of their fears that the company may be a national security threat.

According to the article, “Congressmen Mike Rogers (R-Mich.) and C.A. Dutch Ruppersberger (D-Md.) said they were investigating "the threat posed to our critical infrastructure and counter-intelligence posture by companies with potential ties to the Chinese government.”  Some of this does come across as posturing in an election year.  In because this in involved with the  area of national security, the internet, hacking activities,  corporate and government “monitoring” of other nations by governments, there’s a cause for some concern.

Why Huawei?  The House Intelligence Committee has been vague, according to the article.  They said that they  “have received claims with varying degrees of credibility about cyberattacks internationally that may have been enabled by Huawei technology.”  This may be a bit of a stretch.  Nonetheless, the US government is specific with high tech companies about technologies that can’t be sold to specific countries, such as Syria.  

In March, the Australian government blocked Huawei from bidding on any contracts for the country's A$38 billion (roughly US$39 billion) National Broadband Network.

Symantec had ended a four-year-old joint venture with Huawei earlier in the year because of fears that the relationship could prevent it from getting information from the US about cyberthreats. Neither article discusses whether other US or global antivirus vendors such as Mcafee, Avg Technologies, Kaspersky, Sophos,  or Trend Micro, have a relationship with Huawei. Some immediate questions?  Are there areas that aren't cyber security sensitive that these companies could partner with Huawei on? What's the  tradeoff between immediate  business justification, public relations hits and  potential long term business?  It's that perception versus reality thing.

Slight correction - AVG Technologies could be in a quiet mode with respect to Huawei.  From a Thursday morning Google search using  Huawei and AVG Technologies:

AVG Partners with Huawei

blogs.avg.com/view-from-the-top/avg-partners-huawei/

1 day ago - AVG security solutions are now provided to millions of Huawei customers globally, starting in ... And now, through our new alliance with Huawei, a leading global ...

This is probably AVG Technologies' Mobilation antivirus product for the  Android OS. There also seems to be a promotion going on (can't tell exactly where) for home users owning a Huawei smart phone.

In January, the Pentagon transferred an information-sharing pilot program, called the Joint Cybersecurity Services Pilot, to the Department of Homeland Security.  Originally, the program was intended to share classified National Security Agency intelligence with military contractors.  The government was expected    to extend the program beyond those companies to antivirus companies, like Symantec, and network providers.  According to a March article in the New York Times, Symantec became “worried that its ties to Huawei would be a disadvantage when it came to being the recipient of classified threat information”. 

In 2011, Huawei released their   "Statement on Establishing a Global Cyber Security Assurance System".  Huawei held four meetings in 2011 to decide on   the company’s overall cyber security strategy.  Huawei stated that they are “Willing to work with all governments, customers and partners through various channels to jointly cope with cyber security threats and challenges from cyber security.”

   

In the enterprise, Huawei has an extensive portfolio of products in networking, IT infrastructure, and security.  On the consumer side, products include mobile phones, tablets, broadband, and modems.

http://news.cnet.com/8301-1035_3-57484472-94/inside-huawei-the-chinese-tech-giant-thats-rattling-nerves-in-dc/   

http://www.nytimes.com/2012/03/27/technology/symantec-dissolves-alliance-with-huawei-of-china.html?_r=1