Cisco's Chambers says Huawei whispers justified

Cisco CEO and chairman John Chambers has rejected claims by security experts that the Australian Federal Government’s anxieties leading to the banning of Chinese company Huawei from the NBN are unfounded.

Last month’s announcement of the ban generated hot debate as to the reasons behind the controversial decision.

Former Australian foreign minister Alexander Downer and current member of Huawei Australia’s board of directors yesterday continued his attack on the ban, warning that it could harm economic relations between Australia and China, while stifling innovation in the Australian telecoms market.

Security experts argued that equipment used to build networks such as the NBN could be configured so as to mitigate against the kind of security concerns which appear to have motivated the ban.

But Chambers disagreed. “I can tell you that it’s not possible to do that,” he said.

He refused to answer specifically whether the security issues plaguing Huawei, especially in the US where it has been repeatedly denied business and blocked from acquiring US firms, were actually warranted, offering instead a somewhat cryptic response.

“Huawei has trust issues," Chambers said, while describing the NBN ban on Huawei as "interesting".

The head of the world’s largest networking company was speaking to press and analysts at its global partner summit in San Diego today.

Chambers' tone has shifted from last year when he repeatedly referred to the Chinese vendor as the most worrying and genuine rival to Cisco.

Cisco's global sales head Rob Lloyd said he had spoken to several Cisco partners who had been approached by Huawei to defect, and the overriding perception was the Chinese company did not offer value. “They [partners] are not satisfied.”

Lloyd added Huawei’s market advantage in being able to produce more cheaply than rivals like Cisco was being eroded.

“The original value proposition that they are cheaper isn’t there anymore.”

Having established a dominant position in the service provider market for networking solutions, Huawei is now making a concerted push for the enterprise space which means going directly after Cisco’s core customers.

But the clear message coming from Cisco at this week’s partner summit is that it is doing more than ever to nurture and shore up loyalty amongst its channel and its customers.

The company yesterday announced a significant revamp of its channel, featuring the consolidation of 47 services-oriented programs into one as well as a new program targetting the mid-market.