Meet Huawei, the not so hidden dragon
Posted: September 22, 2012 Filed under: Uncategorized | Tags: BT, china, Congress, cyber espionage, huawei, shenzhen, smartphones, spying, telecoms, US Leave a comment
I’ve just spent a fascinating two days with Huawei in Shenzhen. If you haven’t heard of the firm you will soon – it’s the world’s number two manufacturer of telecoms kit, powering all the UK mobile operators and BT, Talk Talk and Virgin Media’s fixed line operations.
It’s also number six in the mobile devices market globally, with its eyes on a higher position, and has entered the enterprise IT space where it sees big growth potential.
The trip was a chance to see and be impressed by Huawei HQ, a sprawling campus in a suburb of Shenzhen in the south of China next door to Hong Kong, rather than have an opportunity to quiz senior execs on the firm’s roadmap.
The firm has been spending rather a lot of money to show rather a lot of journalists the same thing – well, it can afford to, having made around $32bn last year.
The reason is that despite its best efforts it’s still not winning a huge amount of enterprise custom, its devices don’t have great brand recognition and, most irritatingly for the firm, it’s the subject of a high profile US Congressional investigation into links with the Chinese government.
The US has regarded Huawei with great suspicion and reckons it may have links to the PLA and the Communist Party (via its founder Ren Zhengfei) which make the firm’s products a potential risk to national security.
Needless to say, Huawei’s PR team were more keen to focus on the less contentious part of its story. And it is a very impressive story. Ren apparently founded the firm with a few thousand pounds and today, 25 years later, it has 140,000 employees, makes billions, operates in 150 countries and the average age of employees is just 29.
Yup, not really the impression many might have of the company. Due to its unique corporate structure which makes it wholly employee-owned, staff can retire at 45 if they’ve spent more than eight years with the firm with their share dividends providing a handsome retirement fund.
The analysts are in agreement that it has great technology, bags of patents and huge potential, so is the US just being protectionist?
Well, yes and no. Huawei may open up some of the source code of its products for investigators to scrutinise but apparently the big sticking point is info on how the firm is run, and past a certain point Huawei will not divulge that, so it may be deadlock for some time yet.
Ren is still a member of the Communist Party and for anyone who’s read the book The Party by Richard McGregor, this will be a cause of concern to some foreign governments – although it must be said not to the UK, which has welcomed the firm’s investment with open arms.
Now, I’m not saying I fully agree with all of the book but McGregor speaks very convincingly of the Party as acting “like a large magnet that makes iron filings suddenly cling together as it moves into position above them”, making them “stand to attention when it focuses its attention on them”.
In the end, both the West and Huawei are learning to cope with one another. We’re just starting to understand the firm a bit better and it is beginning to understand the greater level of media scrutiny, demands for more transparency and need for a more media friendly executive board – all of which are pretty alien to Chinese companies.
More Foxconn woes – the price of your iPhone 5
Posted: September 13, 2012 Filed under: Uncategorized | Tags: foxconn, iPhone 5, labour rights, ngo, ODM, sweatshop, Yu Tian, Zhengzhou 1 Comment
All the tech talk this week has been on the brand spanking new iPhone 5, which neatly shines the spotlight once again on the conditions at the Foxconn factories where it is assembled.
Now we all know Foxconn is regularly harangued by the NGOs for one misdemeanour or another. Labour rights violations at its plants have been highlighted time and again so I won’t go into them all again now.
The landmark agreement with the FLA and Apple was meant to set the tone for an improvement in pay and conditions, and at the three plants audited by the FLA things do seem to be progressing pretty well.
However, outside those factories there are still some disturbing reports.
The latest came from an undercover reporter from the Shanghai Evening News who lasted 10 days as a newbie worker at Foxconn’s Yu Tian plant, making iPhone 5 devices. Filthy living conditions, bullying by staff, forced overtime – the list of misdemeanours was usual Chinese tech factory fare, although interesting to hear it from a source other than an NGO.
Maybe that’s why Foxconn broke with usual tight-lipped tradition and issued a lengthy statement on this saying it would investigate and address any issues such as those found by the hack, adding in a rare admission of fallibility, that it is “not perfect”.
More disturbing news still came to me from an unnamed source, who claimed that 100 workers at the Taiwanese ODM giant’s Zhengzhou plant – also producing iPhone 5s – have been hospitalised after a food poisoning incident.
Now I must stress that Foxconn has completely denied this with the following statement:
Foxconn has checked with the relevant departments and medical facilities at their Zhengzhou campus and they have confirmed that there has been no such incident.
I haven’t been able to verify independently with the local hospital so for now I’m keeping an open mind.
However I think it’s pretty obvious that the labour problems in Chinese tech factories are far from over and will require the continued scrutiny and determination of the big name brands as well as the not-for-profits for some time to come if genuine change is going to happen across the board.
A final, if rather depressing footnote: Foxconn is still pretty widely regarded as a leader in the tech ODM space when it comes to pay and conditions in China.
Peel back the hype and the cloud is not all shiny
Posted: September 5, 2012 Filed under: Uncategorized | Tags: cio, cloud computing, hong kong, iaas, IT manager, MIG, paas, saas, virtualisation Leave a commentSometimes it’s reassuring to know that, wherever in the world you travel, IT leaders are experiencing exactly the same challenges.
A day spent listening to CIOs and IT leaders at MIG’s CIO Executive Summit 2012 in Hong Kong on Wednesday confirmed my suspicions.
The major take-aways I, well, took away, from the event were that CIOs are still not taking charge of innovation, strategy and business leadership as they should; that BYOD is a huge challenge made all the more urgent by the demands of Generation Y; and that cloud projects are still by-and-large of the private variety where sensitive data is concerned.
On the latter point it was interesting to hear CIOs on stage and senior IT leaders in the audience back-and-forth about the as-yet-unproven reality of cloud computing.
This is the stuff the vendors probably don’t want you to hear, and went a little something like this:
- Never try to ‘push the envelope with a cloud project without consulting the regulators first. One big name did in Singapore and was forced to dump his Salesforce.com investment as a result.
- It’s very difficult to determine, but proper due diligence would include trying to decide where your prospective cloud provider is likely to be in 8-15 years’ time. An assessment of the cost of moving to another provider or moving everything back in house should always take place
- The more the cloud integrates with your back end systems the harder it is to switch providers. Realistically speaking you need to treat these projects like an old-school SAP implementation.
- Virtual private clouds could be the answer to many corporate IT managers’ prayers, allowing them to fulfil regulatory requirements around isolation of systems whilst taking advantage of the agility of the public cloud.
It’s the same the world over. Beneath the hype, most IT leaders are actually feeling their way with private cloud deployments and possibly using some public cloud projects for non-sensitive data.
It will take quite some time, probably years, before this changes.
Intel marching on in China
Posted: August 31, 2012 Filed under: Uncategorized | Tags: china, chips, cloud computing, datacentre, emc, great firewall, intel, internet, networks Leave a comment
Was in Bangkok with Intel this week to get an update on the firm’s cloud and datacentre plans – well, the two are inextricably linked I suppose.
No news as such but key themes from that part of the business included Big Data; stellar growth in China thanks to the datacentre needs of the large internet firms over there like Tencent and Alibaba; and continued security risks as pointed out by a McAfee representative.
Jason Fedder, Intel’s Asia Pacific datacentre group GM, agreed with the view of EMC and others that China is where some of the most exciting cloud projects are taking place today thanks in part to the lack of legacy infrastructure in organisations there.
But he went further to say that the PRC is really turning itself from being a technology follower to innovator – pointing to Tencent and Alibaba’s efforts to craft their own compute standards under the Project Scorpio banner, and of the state-run telcos ripping out their IBM boxes to replace them with spanking new Xeon kit.
Intel’s been in China for some time and is about as well-supported over there as any foreign company can be given the sometimes harsh business climate afforded non-local companies.
As an example of its growing influence in the country, Fedder explained how Intel is trying to broker a deal to ensure the closed Chinese crypto-standard Trusted Cryptography Module (TCM) is made interoperable with the Trusted Platform Module (TPM) hardware authentication standard its TXT technology is built on.
However, there are some aspects of doing business in China which even Intel can’t get around fully, as IT manager Liam Keating told me. The network infrastructure is still pretty bad outside the Tier 1 and 2 cities in the PRC, a fact made worse by the Great Firewall and meaning challenges in the firm’s smaller field offices and complaints from staff, he said.
To get around this Keating and his team have been forced to look at other ways to improve traffic flow, such as “in-country cacheing” using outsourced cacheing providers, and by modifying app design to reduce the amount of dynamic content.
It’s reassuring to know that even Intel has the same problems experienced by many when it comes to China’s infernal internet infrastructure.
Decline and fall of Akihabara as a tech hub
Posted: August 23, 2012 Filed under: Uncategorized | Tags: akihabara, electric town, electronics, japan, otaku, tokyo Leave a comment
Has anyone been to Akihabara lately? I know I’m probably way behind the times here, but I still had the impression it was the land of all things shiny and technology-related – where impossibly gadgetry was salivated over by Japanese otaku and envied by foreign visitors.
As my latest ramblings on The Reg explain, I was rather disappointed to see, on exit from the station, pristine pedestrian walkways, giant IT mega-stores and shopping centres. Redevelopment over the past few years has apparently made the place a lot more family and tourist friendly but definitely not much fun for those interested in tech.
Most of the small, cramped, independently owned consumer electronics stores have closed now, but don’t blame the local mayor for wanting to redevelop the place. From my conversations with Japan tech experts and analysts it was going to happen anyway.
The area was big in the 70s, when according to some estimates, 10 per cent of all household appliances sold in Japan were bought in Akihabara. Then the PC and laptop boom in the 90s and beyond took over, drawing in a more geeky crowd keen to build their own customised machines.
But now it’s all cosplay, manga, Maid Cafes and Hobby shops. It seems the tech industry, and Japanese consumers, have moved on. They’d rather get their gadgets online now and maybe try before they buy in a megastore like Yodabashi Camera, according to an IDC analyst I spoke to.
On the other hand, it’s fascinating to see the area reinvent itself as a geek manga/anime/cosplay paradise. Japan, if nothing else, has a remarkable resilience.
The decline of Akihabara as a tech hub is therefore unlikely to portend the collapse of the country’s once unstoppable tech industry.
Samsung latest to be hit by supplier labour abuse scandal
Posted: August 8, 2012 Filed under: Uncategorized | Tags: apple, china, china labor watch, foxconn, HEG electronics, labour abuses, labour rights, samsung, smartphones, supply chain, Vtech 1 Comment
Another week, another woeful tale of big tech brands taking advantage of weakly enforced labour laws and immoral supply chain manufacturers.
This time it was Samsung that had its supplier factories investigated, and what was revealed, as always, was not pretty.
HEG Electronics’ plant in Guangdong – which apparently makes phones, MP3 players and other electrical kit for the Korean giant – was infiltrated by spies from not-for-profit China Labor Watch, yup, the same group that warned of severe irregularities in the auditing system of the tech supply chain.
The same old problems came to light as at Foxconn and VTech, of low pay, staff bullying and physical abuse, dangerous working conditions and forced and excessive overtime.
However, HEG was also accused of employing kids as young as 14 year’s old – illegal even in China –and paying them, and the huge intake of student interns it uses to man its factory, just 70 per cent of their rightful salary.
To its credit, Samsung did respond with a little more than we got from VTech and its customers:
Samsung Electronics has conducted two separate on-site inspections on HEG’s working conditions this year but found no irregularities on those occasions.
Given the report, we will conduct another field survey at the earliest possible time to ensure our previous inspections have been based on full information and to take appropriate measures to correct any problems that may surface.
Samsung Electronics is a company held to the highest standards of working conditions and we try to maintain that at our facilities and the facilities of partner companies around the world.
The issue here again goes back to the validity of the inspections. Unless they are independent – conducted for example by not-for-profits like China Labor Watch – and unannounced then they are virtually useless.
Samsung, if you remember, was highlighted as a client of Intertek, the professional auditing company that has in the past been found guilty of accepting bribes from clients in return for passing a clean bill of health.
There’s no suggestion that happened at its HEG audits, but it’s clear that the audit card should no longer be accepted as a reasonable explanation of such irregularities.
More trouble at’ mill (or Chinese sweatshop)
Posted: August 2, 2012 Filed under: Uncategorized | Tags: apple, audit, china, china labor watch, Dell, HP, intertek, ngo, samsung, sweatshop, Vtech Leave a comment
More news on the continuing plight of Chinese workers in tech manufacturing plants, and the apparent blind eye the major multinationals are paying to their condition, emerged this week.
Li Qiang, founder of NGO China Labor Watch, claimed to the Congressional-Executive Commission on China on Tuesday that the audits which most MNCs commission aren’t worth the paper they’re written on.
He pointed to widespread bribery of auditing firms by the big name companies – basically, they bung a few thousand dollars and the auditors agree not to expose any problems in the factories which might require lots of money to fix.
Although Li didn’t accuse any outright of corruption, Dell, HP, Samsung and Apple were all said to have “severely flawed” auditing systems. He also exposed auditing firm Intertek as having been caugt in the past for accepting bribes.
Said firm has Samsung and Siemens as clients and a lot more tech companies besides.
Now the CECC is most definitely sympathetic to the aims of Li and his counterparts in other NGOs, and one can’t help thinking the reason they’re so keen to expose malpractice in China isn’t to get the workers a better deal but to force such a public outcry that US firms decide to bring jobs back to their homeland.
In fact, it was certainly mentioned several times at the hearing that US workers couldn’t hope to compete against factories where staff are paid a pittance and over-worked to the point of exhauston.
Whatever the motives, though, this needs stuff exposing – factory audits are commonly used by tech companies whose plants are found wanting, as a handy cure-all to keep the media and customers happy.
If they fail, there is literally no point – but we kind of knew that anyway. The only way to change things long term is consumer pressure on companies to improve working conditions followed up by independent and random inspections from NGOs.
Needless to say none of the tech companies above have come back to me.
The lack of response is not just typical of local PR failure – I’ll bite my tongue on that one for the time being – but endemic of the lack of transparency at these big tech brands. If they’re really confident in the conditions at the factories – dismiss such accusations out of hand, invite random inspections etc
Hopefully, as consumers and politicians get more savvy to what’s going on and start to ask more searching questions, these multi-nationals will find it harder to fob them off with the old audit card.
There’s a long way to go yet.
(More entries on this subject can be found here, here and here.)
Feeling gloomy? Asia has space for a few more IT managers
Posted: July 25, 2012 Filed under: Uncategorized Leave a commentNews this week from two separate recruiters gave a cautiously optimistic outlook for ex-pat IT pros looking for career development in Asia.
If you read my piece last week, you’ll know I’m a big fan of IT professionals having a well-rounded global view of the tech market if they’re going to do their job properly. To that end, the ultimate would of course be to move to Asia – or somewhere else far afield – to fully immerse into the different working environment and a completely alien marketplace.
First, a dose of reality from some of my conversations with said recruiters recently.
It’s definitely not easy over here. The days of the glorious ex-pat package are definitely numbered and competition for the best jobs is fierce.
Secondly, the banking sector is not doing brilliantly. It’s not tanking to the extent we’ve seen in Europe but all risk is connected globally and in general the sector is not on a hiring spree, which means lots of candidates trying to jump ship to the commercial sector, according to Michael Page’s Hong Kong boss, Chris Aukland.
His firm’s latest Employee Intentions Report found IT pros in the SAR are less optimistic than any other professionals about their job prospects.
It’s not all doom and gloom though.
Hudsons released its Q3 predictions and found that around half of HK employers were looking to hire in tech, better than Singapore’s 35 per cent but not as optimistic as mainland China where over 56 per cent want new recruits.
Good communications skills are vital and specialist tech skills such as C#, .NET and Java are still in high demand, said Aukland.
For the ex-pat IT pro there are a few things to remember:
Be flexible; show yourself to be adaptable to new ways of working; prove yourself to be a good teacher of staff; and most importantly, be here, if you get that interview.
Failing that, an internal move is the best way to get over here, so start manoeuvring if you want to make it a reality. It won’t be easy but the experience will go far beyond anything you can articulate on a CV.
Asia Pacific falls! Western woes hit PC market
Posted: July 20, 2012 Filed under: Uncategorized | Tags: 2008, asia pacific, Dell, HP, IDC, PC, PC shipments, recession Leave a comment
Just as the global PC market seemed to be getting back on track, Asia Pacific looks to be faltering.
Yes, IDC on Thursday released its predictions for Q2 shipments in the region and the results show a one per cent decline over 2011, with HP and Dell the biggest losers.
The irony in all this is that IDC is blaming economic turbulence in the West as a major cause for consumers and enterprises to tighten spending, thus sending shipments down.
It’s an interesting observation because it really highlights the global, interconnected nature of the economy, and by extension the IT market, today.
We know from the global meltdown of 2008 exactly what happens when the economic dominoes begin to fall in one region – eventually everyone gets sucked in to a lesser or greater extent.
Asian companies with risk exposure in the West or multinationals with offices in Asia may both have found recent economic sluggishness in the markets they operate in outside of Asia Pac has led to greater caution inside the region, which could partly explain the PC stats.
On the consumer side, meanwhile, IDC analyst Avi Sundaram told me the following:
This is more of a sentiment issue. Weakness in Western economies has affected growth in Asian countries as well, with GDP numbers going down across the region in the first half this year. This, in turn, has affected consumer confidence as well. Admittedly, it is not something specific to PCs, but given how PC buying is still a discretionary expenditure out here, consumers are pulling back on all such non-essential spending, including PCs.
So whether it’s shipments to Western countries being hit or the knock-on effect of economic woes in the West leading to lower spending inside Asia Pacific, bad news in the US and Europe may mean bad news for Asia.
It’s all one messed up, interconnected global market.
If nothing else, this should all serve as a reminder to the IT leader in the West that they need to keep an eye on what’s going on all over the planet and not just their home market to effectively manage risk, spot emerging trends, and basically do their job properly.
phil muncaster 