2016 EMEA Conferencing Endpoints and Infrastructure Growth Excellence Leadership Award

2016 EMEA Conferencing Endpoints and Infrastructure

Growth Excellence Leadership Award

2016

BEST PRACTICES RESEARCH

© Frost & Sullivan 2016 2 “We Accelerate Growth”

Background and Company Performance Industry Challenges

Frost & Sullivan ongoing research reveals that the EMEA video conferencing endpoints and

infrastructure market is faced with the following key challenges:

1. Different UC applications are working in silos: Though vendors are opting to

grow inorganically by acquiring other solutions in the ecosystem in order to offer a

holistic UC portfolio, a vast majority of providers are still offering siloed solutions

and services.

2. Abundant availability of a large number of unequipped huddle rooms:

Recent Frost & Sullivan research finds that the ratio of large conference rooms to

huddle rooms in enterprises is about 1:4. In addition, huddle spaces vary widely in

size and physical characteristics (lighting, privacy, seating arrangements, etc.),

which precludes a one-size fits all approach to outfitting huddle spaces with video

conferencing equipment. Rather, there is a high requirement for an all-in-one lean

and flexible video conferencing setup - rather than comparatively complex

traditional outfitting.

3. Cost of deployment, operations and management of on-premise

infrastructure: The cost of deploying an on-premise MCU (multipoint control unit)

is significantly higher than cloud video conferencing services. Additionally,

customers are faced with the huge burden of ensuring interoperability and service

uptime across all video endpoints in their organization.

Frost & Sullivan notes that a growth excellence leader successfully addresses these

industry challenges by striking a balanced approach to meet customer demands. As such,

this growth excellence leader is well positioned to stand out and thrive in the competitive

marketplace.

Growth Performance and Customer Impact of Huawei

Growth Strategy

Huawei is a leading ICT solutions provider with a competitive ICT portfolio of end-to-end

solutions in telecom and enterprise networks, devices, and cloud computing. The

company’s core business segments include Carrier, Enterprise and Consumer – each of

which grew significantly in terms of global revenue in 2015. Video conferencing is a sub-

segment of enterprise and grew 10.1% in revenue terms and 23.8% in terms of

shipments globally in 2015. Huawei’s executive leadership team has introduced several

organic growth initiatives to achieve this growth.

First, the company’s growth can be attributed to its comprehensive video conferencing

portfolio, which offers customers tremendous flexibility and customization options for



different conference room environments – from large meeting rooms to huddle spaces.

Huawei’s video conferencing portfolio includes:

1. Telepresence - Immersive Telepresence – Max Presence, TP3206-55, TP3106-70;

Room Telepresence – RP100, RP200

2. Video conferencing endpoints - TX50, TE40/TE50/TE60 ； All-in-One endpoint -

TE30/TE20/TE10

3. Executive systems - DP300, TE Desktop, TE Mobile

4. Video peripherals- VPC800, VPC 600 /VPC 620, VPM 220 series

5. MCU – VP9660, VP9650, VP9630

6. Others - Management system - SMC2.0/ Media X; Recording - RSE6500, Switch

Center

Frost & Sullivan monitors how Huawei’s consistent product launches have greatly

accelerated its growth. In 2015, Huawei launched the TX50, which adopts H.265

technology to deliver video experience at ultra-low bandwidth consumption. Another

product called DP300, which is an executive system, was also launched in 2015. It is an

all-in-one device comprising a codec, camera, microphone, speaker, and touch screen.

Both devices are based on Huawei’s patented super error concealment technology, which

ensures good video quality (even at a packet loss of 20%). Both endpoints provide 1080P

video resolution at 60 frames per second and enable wireless connectivity.

Second, Huawei remains at the forefront of technological innovation by leveraging its

state-of-the-art R&D facilities. In 2015, it invested around 15% of its sales revenue in

R&D. Innovation is a key factor to attain growth in every market; in the mature video

conferencing, it is quite critical to invest in R&D systematically to gain competitive

advantage.

Finally, Huawei has a well-structured partner strategy that corroborates its vision of

establishing a better-connected world. In the channel partner field, Huawei has

orchestrated a global channel ecosystem and performed in-depth cooperation with

distributors, value-added partners (VAPs), global partners, carriers, and tier-2 channel

partners. For example, by the end of 2015, Huawei EBG increased the total numbers of

global channel partners and solution partners to over 8,000 and 350 respectively. Huawei

has also established partnerships with T-System (Deutsche Telekom) and Vodafone Global

Enterprise in the enterprise ICT field. Frost & Sullivan recognizes that Huawei’s video

conferencing partner strategy is truly non-conflicting, and margins are designed in such a

way that it is a win-win situation for all parties involved.

Above-Market Growth

Video conferencing is one of the fastest growing segments within Huawei’s portfolio. While

the mature EMEA video conferencing endpoints market grew by 9.9% in 2015, Huawei



considerably outperformed the market by achieving a growth rate of 22.3%.

To keep in tune with the market shift to cloud and to stay ahead of the market demand,

Huawei has launched Cloud MCU and cloud video conferencing endpoints in H2 2016.

These new products collaborate with each other to ensure smooth cloud-device

collaboration, allowing enterprises to gain tangible benefits from cloud communications.

Growth Sustainability

At the Huawei Global Analyst Summit 2016, Huawei expressed its objective to march

towards an “All Cloud” future. As a result, all products and solutions will be delivered on

the cloud. This resonates well in the video conferencing space, as it aligns with the market

shift to emerging cloud services that are scalable and affordable from on-premise

infrastructure. Frost & Sullivan expects these cloud services to boost further investments

in endpoints.

To execute on this strategy, Huawei partnered with Videxio, a leading Norway-based cloud

video conferencing service provider. As a result, Videxio extends fully automated support

including plug and play activation, unique URL, global QOS video network, native

interoperability, high security, and call quality monitoring to users of Huawei’s video

endpoints. Other notable cloud video conferencing service provider partners include Zoom,

BlueJeans, Starleaf and Mida in overseas, and EICG, Cloudtp in china.

In addition, Huawei launched Cloud MCU services in Q3 2016. Cloud MCU is a virtualized

platform on a distributed network. It provides elastic scalability and flexibility to integrate

a variety of software video clients with existing video endpoints and infrastructure

components. Huawei also launched cloud endpoints (such as TE10 and TE20) in Q3 to

sync up with cloud MCU. With the all-in-one architecture, TE10 integrates six functional

modules (HD camera, codec, microphone, speaker, Wi-Fi & Bluetooth, and Foldable

Bracket) into one box and is expected to be targeted at small-sized conference rooms;

TE20 is targeted at small and medium sized conference rooms. Both TE10 and TE20

enable integration with third-party cloud platforms.

Growth Diversification

Huawei plans to achieve organic growth with the help of its eSpace UC platform. This is a

fully cloud-enabled enterprise product offering that includes voice, video, voice mail,

console, unified messaging, conferencing, directory, and presence. eSpace is built on an

open architecture with application programming interfaces (APIs) and software

development kits (SDKs), and offers developers and resellers further scope for value

addition. This platform provides communication-enabled business processes by tightly

integrating with enterprise’s business applications to deliver converged solutions. Huawei

plans to deliver this solution through channels that could host it as a UCC service, or

deploy the solution at the customer’s premises.



Huawei has consistently demonstrated that it has a solid roadmap to drive organic growth

and margins, and that the company can complement this organic growth with a disciplined

partnership strategy that promotes its reach in enterprises and helps gain considerable

mindshare.

Customer Ownership Experience

Huawei aims to provide exceptional video quality, blending excellent product design with

superior video processing capabilities. An illustration of this approach is the company’s

video implementation for EDP (Energias de Portugal), a leading energy producer in

Europe. Huawei’s video conferencing endpoints and video-as-a-service proved to be the

best fit for EDP’s requirements of connecting its 12,000 employees over video across

meeting rooms, smartphones, and tablets. Huawei – along with Tecnocom, a highly

experienced system integrator in Europe – helped EDP to replace its legacy video

conferencing systems with Huawei’s terminals across 255 large and small conference

rooms. The ability of Huawei’s endpoints to seamlessly integrate with Microsoft Lync

protects the company’s investments in the Microsoft ecosystem. As part of a 4-year

contract video-as-a-service, Tecnocom extended its network operation center (NOC)

services to monitor EDP’s network 24X7.

In its position at the cutting edge of technological innovation, Huawei serves to reinforce

better video conferencing experience across users at distributed locations, utilizing

different endpoints across a range of platforms.

Brand Equity

Huawei is a well-established brand in the carrier network infrastructure space and for its

consumer terminals (handsets) worldwide. Riding on this popularity, the company has

found a sweet spot in the enterprise space and in the video conferencing market

specifically. Huawei is known for its video clarity based on Adaptive Definition

Enhancement (ADE) technology and Accurate Color Restoration (ACR) technology.

Through an extensive research in video, Huawei delivers 4K Ultra-HD (High Definition)

video experiences to customers. Its research in H.265, the next-generation video coding

technology for future video, accentuates its brand name as a technology enabler in the

video conferencing industry.

Conclusion

Huawei has been a remarkable pioneer and leading innovator in the video conferencing

industry for the last few years. The company continues to develop innovative video

conferencing solutions and remains focused on delivering even greater value for its

customers and partners worldwide. Huawei’s complete product line of video conferencing

systems, strategic focus on innovation and product line expansion, and large channel

partner network will help the company to gain greater customer mindshare in the video



conferencing market in EMEA. With its strong overall performance, Huawei has earned

the 2016 Frost & Sullivan Growth Excellence Leadership Award.

Key Benchmarking Criteria

For the Growth Excellence Leadership Award, Frost & Sullivan analysts independently

evaluated two key factors—Growth Performance and Customer Impact—according to the

criteria identified below.

Growth Performance

Criterion 1: Growth Strategy

Criterion 2: Above-Market Growth

Criterion 3: Share of Wallet

Criterion 4: Growth Diversification

Criterion 5: Growth Sustainability

Customer Impact

Criterion 1: Price/Performance Value

Criterion 2: Customer Purchase Experience

Criterion 3: Customer Ownership Experience

Criterion 4: Customer Service Experience

Criterion 5: Brand Equity

Growth Performance

Criterion 1: Growth Strategy

Requirement: Executive team has a shared vision for the organization’s future growth,

and has created and implemented a strategy that is consistent with that vision

Criterion 2: Above-Market Growth

Requirement: Company’s growth rate exceeds the industry’s year-over-year growth rate

Criterion 3: Share of Wallet

Requirement: Customers allocate a greater percentage of their total spend to purchasing

products or services produced by the company

Criterion 4: Growth Diversification

Requirements: Company is equally able to pursue organic (e.g., distribution channel

optimization, new product innovation) or inorganic (e.g., acquisitions, partnerships)

growth opportunities consistent with the long-term objectives of the organization

Criterion 5: Growth Sustainability

Requirement: Company has consistently sought out opportunities for new growth,

enabling the organization to build on its base, and sustain growth over the long-term

Customer Impact

Criterion 1: Price/Performance Value

Requirement: Products or services offer the best value for the price, compared to similar

offerings in the market



Criterion 2: Customer Purchase Experience

Requirement: Customers feel like they are buying the most optimal solution that

addresses both their unique needs and their unique constraints

Criterion 3: Customer Ownership Experience

Requirement: Customers are proud to own the company’s product or service, and have a

positive experience throughout the life of the product or service

Criterion 4: Customer Service Experience

Requirement: Customer service is accessible, fast, stress-free, and of high quality

Criterion 5: Brand Equity

Requirement: Customers have a positive view of the brand and exhibit high brand loyalty

About Frost & Sullivan

Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth

and achieve best in class positions in growth, innovation and leadership. The company's

Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined

research and best practice models to drive the generation, evaluation and implementation

of powerful growth strategies. Frost & Sullivan leverages almost 50 years of experience in

partnering with Global 1000 companies, emerging businesses and the investment

community from 31 offices on six continents.

Technology

2016 EMEA Conferencing Endpoints and Infrastructure Growth Excellence Leadership Award