What is h3c?

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Core Tip: What makes Cisco uneasy is that, as a company rooted in China, H3C didn't win share by low-end strategy.

Cisco is not the kind of company that can be easily defeated.

In August, Cisco entered the new fiscal year. The latest financial report shows that the net profit in the fourth fiscal quarter of last year was $65.438+0.23 billion, down 36% year-on-year, and the net profit in the full fiscal year of 2065.438+0 was $6.5 billion, down 654.38+0.6%. Cisco is used to this new reason. August, 2009 19 is the end time of Cisco's 6500-person layoff plan. Since then, Cisco has continued to shrink its front line in an all-round way, giving itself a leisurely recovery time.

But in all kinds of worries, Cisco can't ignore a spirit. It comes from Hangzhou Huasan Communication Technology Co., Ltd. (also known as H3C). As far as the enterprise network market is concerned, in Chinese mainland, where Cisco is not well managed, the sales in 2009 was the same as that of Huasan, and 20 10 was surpassed by Huasan. Even in Cisco's powerful global switch market, its market share has been reduced by H3C by 6 percentage points, and its router business has been reduced by nearly 6 percentage points.

For Cisco, H3C is not an opponent in the usual sense. From the perspective of volume, the two are still far from each other. For example, in the first half of 20 1 1, Cisco's share in the global switch market was nearly 70%, while H3C/ HP was only 12%, showing a steady growth momentum of 20 1 1; But this is enough for Hua San to sit firmly in the second position. This 8-year-old company completed the goal of H3C CEO Zheng Shusheng in just 3 years: "Every company has its own specialty, that is, concentration. H3C hopes to become the second choice in the world besides Cisco based on the IT field. "

What really bothers Cisco is that, as a company rooted in China, H3C has not won market share through low-end strategy. Its top-end data center products have conquered mainstream multinational customers such as Procter & Gamble and Wal-Mart, which was originally Cisco's territory.

Moreover, compared with Cisco's financial difficulties, H3C's cash flow and operation are healthy, whether it is net profit or gross profit. From a global perspective, "it is similar to Cisco, perhaps with higher net profit." An insider of Huasan told this magazine. In the last fiscal quarter, Cisco's gross profit margin has dropped from 62.7% to 665,438+0.3%. In an exclusive interview with this magazine, Wang Wei, vice president of Huasan Marketing, not only lamented: "We should be one of the companies with the best financial situation in the whole industry, which is also a reason why we have been sold many times, but we have paid a lot of premium every time."

This sentence implies bitterness. From 1995, from Huawei's data communication department, Huawei's 3Com and H3C, to Huasan, which now belongs to Hewlett-Packard, it has changed hands several times, with a lot of fate, which is really rare in the development history of high-tech enterprises in China. The vitality of this fast-growing company with the ability to challenge Cisco stems from a bumpy growth process.

From June 2003 to October 2003 10, Zheng Shusheng led 1000 people to move to Hangzhou from Shenzhen and Beijing, and Huawei Data Communication Department became the initial team of Huawei 3Com. The move is mainly to ease the intellectual property litigation between Huawei and Cisco. Shortly thereafter, Bruce Claflin, President of 3Com and Chairman of Huasan, revealed that 3Com was the active party. The negotiation lasted for one year and made rapid progress in the last three months-this is the most intense period when Cisco sued Huawei for infringement. On March 24, 2003, four days after the establishment of the joint venture company, Bruce stepped forward and provided extremely favorable testimony in the American court, freeing Huawei from the lawsuit of Cisco.

According to the design at that time, today's Huasan "has completed its historical mission", a person who left Huasan told this magazine. By the end of 2006, Huawei sold 49.5% of H3C shares to 3Com, achieving the goal of focusing on its core business and shrinking its front line. Through this joint venture and sale, Huawei achieved a commercial return of nearly $654.38 billion.

Since its birth, Huasan has been placed in a highly competitive living environment and has undertaken a unique mission. Until 2009, due to HP's acquisition of 3Com, H3C was taken over. On the capital level, H3C has never really mastered its own destiny. "3Com's main assets are based on Huasan, all built by themselves, all sold by themselves, and have no sovereignty." An industry insider said.

However, in this passive state, H3C expanded its sales scale from 600 million yuan to 654.38+0 billion yuan in six years. Dramatically, the competition pattern at the beginning of its birth has evolved again this year: H3C has temporarily maintained its independent position in the HP system and can challenge Cisco, while Huawei, the former parent company, has begun to enter the enterprise network market and become its future rival.

For Hua San, everything is normal. Since it can't control its own destiny, this company has learned how to maintain its vitality.

What follows is an innate sense of crisis. "Hua San has a strong sense of crisis. We are always ready for the severe winter, which is related to experience or to the whole industry. " Wang Wei told this magazine. In his view, Hua Sanben was born with risks and was doomed to an uncertain future. "Hua San Ben is called Hua San Ben because it originated from Huashan (III) Road since ancient times."

Attack Cisco

Long-term performance growth has given China Sany an instinctive pride. Now Sina, Sohu, Baidu, Tencent, Taobao and Shanda are all using H3C equipment, whether it is the top core equipment or the lowest access equipment.

However, it is worth discussing how H3C won all this and challenged Cisco in such a complicated background.

Obviously, H3C won the blood of Huawei in the early stage and became the foundation of its core competitiveness. For example, H3C will spend 15%- 18% of its annual income on research and development. At the same time, the in-depth exploration of customer needs also inherits Huawei's tradition, which is reflected in the customization of products, which is very different from Cisco China. In addition to providing customized services to a few large customers, Cisco also provides the same services and products to China market as its headquarters, while H3C goes deep into China market. "Frankly speaking, most of our products are customer-led needs." Wang Wei, vice president of H3C marketing, said.

A few years ago, Sohu was still the third-generation search engine sogou, and only Huasanhe and Cisco participated in the test. At that time, Cisco was in full swing in the China market, but in the end, Sohu chose H3C precisely because H3C was willing to spare no effort to meet Sohu's needs. In 2006, in the joint laboratory of H3C and Baidu, H3C technicians asked, "How big do you need our switch capacity?" "We can consume all the equipment in an instant, no matter how big it is." Therefore, since then, H3C has been carrying out the largest capacity conversion in the world.

In this way, countless experiences have prompted Huasan to gradually establish a set of corresponding systems around customer needs.

Huasan has a huge electronic process of user demand, and all personnel of the company's technical support, pre-sales, account manager, sales, rehearsal, research and development are connected to the platform. Among them, the R&D team that keeps in touch with big customers for a long time will bring various needs of customers, small pure technical needs brought by product R&D team and product planning needs brought by product preview. In order to maintain a more objective evaluation, the collected requirements are not directly judged by product designers, but form a task book for C-Marketing departments to make hierarchical predictions to ensure the accuracy of decision-making.

Besides adjusting products according to users' needs, H3C spends more time on channels than Cisco China. Generally speaking, channels are divided into general agents and secondary dealers. The general agent acts as a transit station to a greater extent, delivering goods in cash from the equipment manufacturers, delivering goods to the secondary dealers first, and giving the latter a certain refund period.

When there is a risk of capital withdrawal, it is easy for the general agent and the secondary channel provider to have conflicts. Frankly speaking, manufacturers have no obligation and responsibility to guard against such risks. However, in order to make the whole channel cleaner and more transparent, Huasan has set up a credit evaluation system for the channel, and all agents are eligible to enter the system to check the reputation level of agents in the industry, and they can also report vicious incidents.

In addition, some profit-seeking channel providers may replace some products or product modules with cheap products in the integrated solutions sold to customers. As long as customers complain, Huasan will stop supplying agents. Dealers who were listed on the "praise list" at the annual channel conference were suspended for 6 months.

On the contrary, in Cisco's sales system, only gold agents and some silver agents can place orders directly, and most senior certification agents do not have this right. H3C has five general agents and more than 2,000 secondary agents, and they can also place orders directly. At the same time, employees of H3C will also accompany agents at all levels to meet customers, so as to maintain a strong customer relationship.

In fact, the growth of H3C is also in line with the development of China enterprise network market. Different from the operator market which is familiar to communication equipment manufacturers and adopts centralized procurement, in the enterprise network market, customers are widely dispersed, which indirectly leads to different product chain models. At first, H3C also adopted the low-price model, and was later complained by channel providers. Customer relationship and channels are king, which is the rule of the game in this new market.

Survive at HP

The process of building competitiveness by relying on customer relationship and channel advantages is also related to Huasan's unique lifestyle. H3C can maintain its independent operation status in both 3Com era and HP era.

Although it has changed hands several times, the real trader of H3C is still an old employee of Huawei. In 2006, Huawei said that according to the original joint venture agreement, only 20% of employees of Huasan were Huawei's old department and had Huawei job numbers, and 80% of them were recruited from the society. But these 20% employees have the decision-making power of Huasan, and Ren's orders can be effectively uploaded and issued. Before it was sold to 3Com, it was not an exaggeration to call Huasan "Huawei Enterprise Network Division".

"They are all old people from Huawei, and 3Com couldn't get in at that time." A person familiar with 3Com told this magazine. However, since it was sold to 3Com, the management relationship between H3C and Huawei has gradually drifted away. H3C became the core business of 3Com, and Huawei made a lot of money from it. However, only 3Com owned by H3C is unsustainable. In June 2009, HP acquired 3Com as it wished.

No matter on which platform, H3C is like a strategic chess piece, which is closely related to the industry layout of the acquirer.

In the past few years when H3C changed hands, the pattern of IT industry is also developing in the direction of "cloud". After experiencing the integration and separation from software and hardware to services, the IT infrastructure industry, including storage, computing, security, monitoring and so on, has shown an unprecedented integration trend.

In the new strategy released in March 20 1 1, global CEO Apotheker of HP proposed to provide all-round products from back-end infrastructure to terminals. "On the one hand, HP will provide a public cloud and a secure and manageable enterprise cloud that users can rely on. On the other hand, HP will provide global enterprises with complete products and technologies to build a hybrid cloud. " Chen Lei, director of HP's public relations, told this magazine.

In order to deploy the future industry layout as soon as possible, HP has successively acquired 3PAR in the storage field, Mercury and Opsware in the software industry in recent years. In the field of network system called cranial nerve system, H3C naturally becomes the target of public criticism. Hewlett-Packard, Dell and Huawei all participated in the bidding.

Little known is that in the middle of 2009, IBM also hopes to cooperate with H3C in network equipment. After several rounds of negotiations, it was almost successful. But at the same time, 3Com executives actively sought HP's acquisition. In this regard, most people inside Huasan only learned the exact news a few weeks ago, and the IBM project was terminated.

As a result, HP found Huasan, the designer of the cranial nerve system, and IBM cooperated with Junbo.

How to establish its independence within the HP system is a challenge that Huasan must face.

After HP's acquisition of 3Com was completed, there was a small traffic peak in H3C. Although HP executives promised H3C that "it will not change in five years", employees are worried that the tragedy of EDS will repeat itself. After HP acquired EDS, the number of EDS offices in China was reduced from dozens to dozens, and the cancelled offices adopted a more economical way of working from home.

Fortunately, H3C and HP are also looking for a suitable cooperation model. In terms of management structure, H3C has no direct relationship with HP China, but reports to the network department under HP Global Enterprise Business Department. On the product line, HP China merged the original switch team of more than 20 people into Huasan.

Specific to the sales level, the domestic market, Huasan continues to promote according to the original channels and strategies; In the international market, H3C sells its products to HP and enters the HP channel with a series of products. Since then, H3C products have entered the data centers of Fortune 500 companies such as Wal-Mart and Procter & Gamble.

Before 2007, China's business continued to soar, and H3C also wanted to explore the global market by itself. At that time, it also made breakthroughs in Southeast Asia, North America and Brazil. But in April 2008, after Mao Yunan became the CEO of 3Com, his first task was to sell 3Com, including H3C, and Wall Street investors were waiting to cash out. Therefore, the overseas business during the capital investment period is temporarily put on hold.

Under HP's sales channels and service channels, H3C's overseas market share has grown very rapidly. During a visit to China at the beginning of the year, the head of HP's network department in charge of China III business was very happy to deliver a speech "Our overseas sales increased by more than 100%". At the same time, the expansion of overseas markets has also injected more funds into Huasan, which is conducive to the development of its domestic market.

This is very important for H3C senior management team including Zheng Shusheng.

"Mr. Zheng believes that the funds obtained through HP's overseas channels can make the domestic market go better. Otherwise, the rise of Huawei's enterprise business will bring greater pressure to H3C in the near future. " An H3C employee, who asked not to be named, told Global Entrepreneur, "This is not the same as the view and perspective of Huawei's core management team."

In fact, H3C has been learning how to integrate resources on different company platforms. 3Com once brought a stricter financial system to H3C. H3C's quarterly financial report has been audited by an international accounting company and publicized according to the GAAP auditing principle of the United States, which is the basis for H3C to be sold at a premium after many changes of ownership. Now, the rational use of HP's global resources has enabled H3C to strengthen its counterattack capability against Cisco in the global market.

For HP, not only H3C products, but also its R&D and technical strength.

Over the past year, the two sides have had frequent exchanges in product research and development. R&D personnel of H3C often fly to the United States to discuss storage, cloud computing and unified management, and also participate in the formulation of some international standards. According to Wang Wei, last year, our understanding of computing and storage was comparable to Huasan's 56 years of exploration. At present, Huasan has formed a detailed three-year product plan. This is actually beneficial for H3C to provide higher-end and more comprehensive solutions.

However, even if it is effectively integrated into HP's chessboard, H3C is sticking to its own survival mode.

In order to make the work of R&D more controllable, H3C has established a unique "separation of three powers" mode. One third of the 2600-person R&D team is engaged in legislative work: standardizing the original program and code to form a * * * platform, and no one can modify the program; The administrative system refers to the specific operators who are engaged in meeting the needs of customers. When they receive the task book, they will choose the required programs and codes from the platform built by legislators, and make some innovations on this basis to achieve the goal of the task book. In this way, there is not much innovation in each new project, and too much innovation will lead to system instability.

Judicial personnel are responsible for "picking holes", and they conduct various tests and evaluations on the products produced by the administrative system. In order to maintain the independence of this link, the employees of the system report directly to the company's decision-making department.

Be born of sorrow

Maintaining independence has penetrated into the spiritual world of employees in Huasan. Followed by an unspeakable "insecurity." In the history of China enterprises, no company has changed owners so frequently as Huasan.

After being acquired by HP, some employees chose to leave their jobs. "H3C is too small in HP's system, and it is very likely that it will eventually merge into a product line, and even the brand of H3C will disappear in the end." A resigned employee told this magazine. And some people who choose to stay also privately said, "Don't think about how we will feel when we merge into HP."

From a purely private enterprise to a part of a foreign company, H3C hopes to maintain its dignity while changing its role. Some objective circumstances have also enhanced Huasan's confidence. In the same position, the salary of H3C employees is "two to three times higher than that of HP employees", and H3C still inherits Huawei's incentive mechanism.

At the same time, the diligence of Huawei people has also penetrated into the blood of Huasan.

No matter how the environment changes, every report of Huasan Marketing Department is still like a debate. Wu Jingchuan, the global marketing director, sat in the front with his head down and didn't read the PPT reported by the bosses of various departments. But she listened carefully, took notes carefully, and asked detailed questions at any time, so that each report lasted more than two hours. "I've been asking questions and debating from morning till evening," said an employee of Huasan.

Like Huawei, H3C attaches great importance to systems and principles. When employees make mistakes in principle, they will be fired even if they are capable. However, many experiences of changing owners made Hua Sanger emphasize humanized management.

Unlike most companies, H3C will affirm employees' contributions and achievements to the company, even if they are fired. A middle-level employee made a mistake and left. Huasan paid his previous work bonus in advance and gave him half a year's salary.

In the process of scouring the sand with big waves, all the people who are too uneasy have left, and those who remain are undoubtedly the holdouts. It is very important for the top management of Huasan to coordinate the relationship between HP and employees and find new independence.

"The boss will also complain that he used to have the final say, but now he has to report to HP, regardless of domestic business. Many things we have to think of other ways internally. " An employee told this magazine.

After the merger with HP, at the beginning of each year, the senior management of H3C will fly to the United States to discuss the arrangement of employee bonuses with HP senior management. At the beginning of 20 10, we talked for the first time and determined the fixed ratio incentive mechanism. At the end of the year, employees in the first-tier market received relatively few bonuses and benefits, so the company tried to adjust the bonuses to some extent. At the end of the transition period, 20 1 1, H3C executives decided to talk with HP about the floating incentive mechanism.

On the other hand, HP did make some adjustments to H3C. Initially, H3C's business layout included network (security, video), multimedia (multimedia monitoring) and storage (IP storage). Because the storage and monitoring department has been unprofitable and overlaps with HP resources. Now, both parties intend to sell the original storage and monitoring of H3C, and if there is demand for H3C in China market, they can buy it from HP. Therefore, Huasan Shenzhen R&D Center, which focuses on warehousing, may disappear and some employees will be lost. At recent agent conferences, Zheng Shusheng always said to dealers, "We are all brothers. Even if it is divided in the future, everyone should manage the storage and monitoring system. "

All kinds of experiences have turned anxiety into a strong sense of hardship.

As a high-tech industry based on innovation, H3C knows the rules of the game with high investment and high risk. "If you want to resist risks, you can't live by borrowing money," Wang Wei told this magazine.

Since its birth, Huasan has always attached importance to the smooth cash flow and turned losses into profits by relying on its own funds. The only loan was that Zheng Shusheng borrowed millions from the bank in order to let the accountant know the loan process and technology.

During the financial crisis, Zheng once told employees: "Don't worry too much, we still have 4 billion cash in our account." At present, this fund is about 6 billion yuan. In May this year, the financial systems of HP and H3C merged. This "venture capital" is "a very troublesome thing" for HP.

No matter how hard you try. Anxiety still exists. Will H3C merge into HP China? Whether Huasan brand will disappear in the future-similar speculation sometimes appears in employees' minds.

"If the brand of H3C is really lost, it will definitely affect morale. In only one case, H3C may be merged into HP China. That is the rapid development of domestic cloud computing and data center business ... but from the current domestic trend, it is impossible for at least three years. " A Huasan employee said.

In addition, the relationship with Huawei is almost subtle. After losing H3C, Huawei has never slackened in the field of data communication. According to informed sources, products similar to H3C have R&D and backup in Huawei. In the future, Huawei and H3C will become competitors of China Enterprise Network. At the same time, H3C's core employees all own shares in Huawei. Huawei's dividends and incentives. If you leave H3C, you can accept Huawei's competitive terms after your resignation. "

For Lao Hua, the future of HP may not be clear enough, but it doesn't matter anymore-being as independent as possible in such a complicated situation is the presentation of vitality.