Chapter 16 Thrilling battle "The Lion King"

Going abroad, it can be said that "there are people beyond the people, and there is a sky beyond the sky". The "Wolf Team" defeated almost all opponents in the country in one fell swoop and achieved brilliant "records".But Ren Zhengfei was not satisfied, and led his "wolf team" across the ocean, striving to create a new world. This time he encountered unprecedented resistance. On the vast grassland, there are not only wolves that can fight, but also fierce and violent lions and leopards. In order to compete for food, they will inevitably have fierce face-to-face bloody fights.Huawei's rise, every step it has taken is "bloody".Fighting against the masters, Huawei has no certainty of winning, so it can only learn while doing the tricks, and learn their routines.With insight into the details and quick learning ability, Huawei will be able to "receive recruitment" soon and successfully "response".

Huawei's landing in Europe can be said to be very smooth, but for the United States, a super technological power, although Huawei has been "coveting" for a long time, it dare not act rashly.Huawei, entering the United States can be called "a decade of sharpening a sword."On the vast North American prairie, it has long been ruled by the fierce "Lion King". Huawei's entry is simply "snatching food from the mouth of a tiger". On the vast North American prairie, a vigorous "thrilling drama" in which a rebellious "wolf" and an aggressive "lion" fought to the death was staged.

In 1993, Huawei established a chip research institute in Silicon Valley, USA. In 1999, Huawei opened a research institute in Dallas. On June 4, 2002, Huawei established FutureWei, a subsidiary in Texas.After a long period of careful preparation, Huawei has launched a battle in the United States. At first, Huawei copied the domestic routine and played the "low price card". However, it did not expect that this tactic would cause a lot of trouble and violate the territory of the "Lion King". Huawei's overseas market is progressing smoothly. In 2002, the confident Huawei aggressively attacked the US market and approached Cisco.Thus, the seeds of later conflict were sown.

Cisco is the god of wealth in Silicon Valley and the embodiment of the pinnacle of the Internet.Data products such as routers and switches are its most advantageous fields, and its market share in the global data communication field reaches 70%.It has infinite power and has the power of "Lion King". It has defeated three generations of competitors in succession: the first generation is 3Com; the second generation is Compaq, Hewlett-Packard, DEC; Alcatel et al. In June 2002, the Telecom Equipment Exhibition was held in Atlanta, USA, and Huawei products made their official debut in the US market for the first time.The products displayed by Huawei have the same performance as Cisco products, but the prices are 20% to 50% lower.At this exhibition, Cisco CEO Chambers quietly patronized the Huawei booth, stopped for a short time, and then left in a hurry.

After the exhibition, Huawei's data products quickly entered the US market. In 2002, Huawei's sales in the US market increased by nearly 70% over the previous year.In contrast, Cisco's sales and market share in the global network equipment market declined for the first time.Subsequently, in the bidding in Brazil, Huawei defeated Cisco and Juniper in one fell swoop and won a big order.This has shaken Cisco's dominance even more. Huawei's advertisement in the United States is: "The only difference is the price." The background of the advertisement is the Golden Gate Bridge, and the Golden Gate Bridge is the symbol of Cisco. This provocative behavior stimulated the "Lion King" even more.

Some people in the industry began to change the slogan "Cisco is by your side, the world will change" to "Huawei is by your side, Cisco will change."Many media outlets in the United States also took advantage of the topic and reported on "China's telecommunications giant Huawei."Immediately, many Western media rushed forward, publishing comments with "Huawei threat theory".Cisco couldn't bear it anymore. In 2002, Chambers listed Huawei as Cisco's fourth-generation opponent in the world. In "Homer's Epic", the hero Achilles heard that his good brother was killed by the Trojans. win.

Huawei's publicity in the United States aroused Cisco's anger, and "Achilles' anger" finally broke out.It is said that after the Atlanta Convention, Cisco quickly set up a "crackdown on Huawei" working group within the company, and set up a special homepage on its intranet for its global employees to discuss how to crack down on Huawei. The weak "coyote" and the fat and strong "lion" cannot be compared.Huawei only sold 18 routers in the United States, but Cisco couldn't bear it anymore, and Huawei was not to be outdone, and the two sides finally went to war.The "Lion King" who dominates the world will never tolerate a "wolf" appearing in his territory.Huawei's menacing approach, "The Lion King" was completely irritated and had to take action.

3Com CEO Bruce Claflin (Bruce Claflin) later recalled: "At that time, Cisco's top executives had already expressed their intention to 'start' against Huawei, and they had expressed on many public occasions that they might sue Huawei in the United States. company." On an industry website, someone compared the two products and found that the two products are very similar regardless of appearance, product number, or function. Even users who have been trained by Cisco engineers can use them directly without further training. Huawei products.An analyst also said that for many years, if you don't pay attention to observation, you can find that Huawei's router products are similar to Cisco's models and other characteristics.This further fueled Cisco's ire.

In mid-December 2002, Cisco's global vice president came to Huawei's headquarters from the United States and formally raised the issue of Cisco's intellectual property infringement with Huawei.Cisco's demands include: acknowledgment of infringement, compensation, stop selling products, and so on.Huawei believes that it can stop selling the allegedly controversial router products overseas, but refuses to admit the software infringement allegations. After nearly a month of communication, neither party admitted that they were wrong, and finally failed to reach an agreement, and broke up unhappy.

Cisco's global vice president came to Huawei's headquarters to negotiate with no results, and returned disappointed.Soon, both sides understood that this negotiation was just a warm-up for the fierce confrontation, and the confrontation could never stop here.A more intense storm is already brewing, and the real contest is about to begin.An international giant and a fierce challenger, the two sides will never make concessions easily.Outside the negotiating table, Huawei and Cisco began to actively prepare, and the two sides gathered evidence and external resources that were beneficial to them.

Huawei immediately conducted a comprehensive inspection of its own products.In the process of negotiating with Cisco, Fei Min, Huawei's vice president in charge of R&D, led the technical team to implement technical breakthroughs in product modification. Huawei has also checked other similar products of its own that may be in dispute.The inspection results show that Huawei's products are no problem.During the negotiation process, Huawei withdrew more than a dozen allegedly infringing router products sold in the United States.However, the "Wall Street Journal" subsequently reported that Huawei's move was evidence of its infringement. Many Chinese companies like to keep things quiet for fear of getting involved in lawsuits.However, it is useless to shy away from the international market. It can only show that we have a low self-esteem, so we should stand up and fight hard in order to win recognition.Fei Min said angrily: "It thinks that you are covered in black all over, and the gap between the two sides is too great, so there is no way to continue talking." Cisco also started the final preparations before the lawsuit.Before leaving China, Cisco's global vice president paid special visits to the Shenzhen Municipal Government, the Ministry of Information Industry and other relevant government departments, and expressed his thoughts to them? ?A determination to prepare for litigation to seek understanding and support. On January 24, 2003, a "storm" that had been brewing for a long time finally came.Cisco filed a lawsuit against Huawei in the U.S. District Court for the Eastern District of Texas.In the 77-page complaint, the charges involved 21 charges involving patents, copyrights, unfair competition, and trade secrets.This is the first time that Huawei has "hit a wall", and its overseas expansion has been hit hard. Since Cisco's vice president returned from Huawei's headquarters without success, Ren Zhengfei had expected this lawsuit, but he didn't expect it to come so soon.Ren Zhengfei once said with great black humor: "This is an unexpected Spring Festival gift from Cisco to Huawei." If Cisco wins the lawsuit, Huawei will not be able to enter the US market for a long time, and the results of its painstaking efforts will be destroyed.Not only that, but the entire Chinese product will suffer serious setbacks in the US market.Therefore, Huawei must "challenge".Ren Zhengfei proposed that Huawei should respond to the lawsuit: "If you dare to fight, you can make a peace, and a small loss is a win." Ren Zhengfei also understands that it is not Cisco's real intention to obtain compensation through reconciliation. Its real purpose is to combat Huawei's competitiveness in the market through litigation: to curb Huawei and prevent Huawei from negotiating a joint venture with 3Com; to preserve Cisco's dominant position.Before the lawsuit, Huawei took the initiative to withdraw the suspected products from the US market, but it was ridiculed and ridiculed.This time, if we rely too much on reconciliation, Huawei will be very passive. Not only will it be humiliated, but it will also end in embarrassment. Soon, Huawei established a "response team" led by several vice presidents such as Guo Ping, Fei Min, and Hong Tianfeng, and participated by intellectual property, legal, data product research and development, marketing, and public relations departments. Before the Spring Festival, Huawei executive vice presidents Guo Ping and Xu Wenwei arrived in the United States.A few days later, Li Jie and Chen Shushi, who is in charge of Huawei's international legal affairs, also arrived. Guo Ping is the commander in chief of this lawsuit. When he left Shenzhen for the United States, he left in a hurry and only brought two shirts with him.Unexpectedly, this trip lasted for half a year. In this way, in the United States, Huawei and Cisco began a lawsuit that lasted for a year and a half. Before the first court session on March 17, 2003, public opinion outside the courtroom was the main battleground between the two sides.This lawsuit is an all-round contest. On the eve of the lawsuit, Cisco has already prepared for public opinion.Cisco announced a $150 million global advertising plan, which is intriguing.Chambers' outstanding diplomatic skills and eloquence have won strong public support.Not only in the United States, but even in China, Cisco's public relations capabilities are top-notch, and many well-known Chinese media are clearly on Cisco's side.When Chambers came to China, he was often received by senior Chinese leaders and easily supported by the Chinese government. Compared with Cisco, Huawei's public opinion support is greatly reduced.In the eyes of the American public, Chinese manufacturing has no core technology at all, and it is absolutely impossible for Chinese companies to manufacture high-tech products.Several of the most famous financial media in the United States made definitive reports on Huawei's infringement at the very beginning of the lawsuit.They even suspect that such a large company as Huawei has not been listed, so there must be ulterior equity arrangements. Former 3Com CEO Bruce Claflin said: "This case sparked smoke, it didn't start a fire, but you need to know where the smoke is coming from. Let's be clear, most Americans believe that Cisco is right, and Huawei is wrong—because there are preconceived notions to accept this kind of misleading.” Huawei also doesn’t get much support in China, and the Chinese government has made it clear that it will not provide Huawei with any political help. In the face of strong public opinion, this case has paid a real price for Huawei's long-term practice of staying away from the media and the public and keeping a low profile. The momentum in the market is also intense.Whenever there is news that is unfavorable to Huawei in the court, Cisco's global spokesperson will announce it to the media as soon as possible, and its account manager will inform global customers as quickly as possible, and threaten them not to buy Huawei. products, otherwise it may cause trouble of joint compensation.For this reason, many European and American customers have suspended cooperation projects with Huawei.In addition, Huawei's public relations company and attorneys in the United States are also biased against this, believing that Huawei is at fault. In the first round of competition, Cisco won an overwhelming victory, and Huawei was caught off guard. If you don't take the initiative and lose the lawsuit, all Huawei's overseas efforts will come to naught.As a result, Huawei, which was passively attacked, began to look for strong rebuttal evidence. Guo Ping found two law firms, mainly Heller Ehrman, in which Robert Haslam, representing Huawei in litigation, is a top lawyer in the field of intellectual property litigation in the United States. The lawyer comprehensively inspected Huawei's R&D process and technical strength, and suggested working on the "private agreement" to attack Cisco's use of the "private agreement" to engage in monopoly as a strategy to counterattack.Private agreement refers to the standard formed by the products of a certain company entering the market before the international standard organization realizes the standards and specifications for network interconnection and interoperability.With the private agreement, Cisco has monopolized the market and maintained high market profits. The focus of Cisco's lawsuit against Huawei is the source code infringement, and the similarity of technical documents and command interfaces. Cisco believes that Huawei has adopted the technology it applied for private protocol protection in the development of these products. Huawei gradually learned to be smart, began to break through self-enclosure, and took the initiative to show itself on the front stage.Guo Ping personally went to the PR company to tell them the true face of Huawei.He invited lawyers to visit Huawei's R&D base to explain Huawei's technical strength.With the help of a public relations company, I communicated with Fortune, the Wall Street Journal and other media, telling them that since 1998, Huawei has invited world-class consulting companies to provide financial, R&D process, auditing and other services to prove itself. It is high-tech.It also tried to eliminate the misunderstanding of Huawei by the US government and the industry through a Lobby company established by a retired senior US official. Before the trial, under the introduction of the lawyer, Huawei invited a third-party expert, Dennis Allison, a Stanford University professor and data communication expert, to Huawei to visit the R&D process and compare and analyze the two versions of Cisco IOS and Huawei's VRP platform.As a result, Huawei's VRP platform has 2 million lines of source code, while Cisco's IOS uses 20 million lines. Only 1.9% of Huawei's old VRP platform is related to Cisco's proprietary protocol. On March 17, 2003, during the first court hearing, Huawei defended closely around the private agreement. Through the courts and the media, Huawei focused on attacking Cisco's use of private agreements to monopolize the market.With the public appearance, the outside world's understanding of Huawei gradually deepened, prejudice began to be eliminated, and reports gradually became more objective, which prepared the conditions for Huawei to reverse its passive situation. In order to win as soon as possible, shortly after the lawsuit started, Huawei was in full swing to open up a second battlefield, preparing to countersue Cisco in China.But later the case went smoothly and the plan was canceled. The joint venture between Huawei and 3Com was announced on March 20, 2003, which undoubtedly poses a great threat to Cisco.Cisco also understands what this means, and it is time to make concessions in the face of combined forces. On March 24, Huawei submitted its defense again. 3Com CEO Claflin testified in court. He used his reputation to guarantee that Huawei's technology and strength are trustworthy.He also told media reporters what the real Huawei is like. On June 7, the court rejected Cisco's application to ban the sale of Huawei products and other requests, and rejected Cisco's request to prohibit Huawei from using an order execution procedure similar to Cisco's operating software.However, a limited ban was issued: Huawei stopped using the controversial router software source code, user interface, and online help files. However, the entire lawsuit is still not over. After eliminating the dispute over the private agreement, whether the product source codes of the two parties are similar has become the key to determining whether Huawei has infringed. On October 1, the comparison of the source code by the lawyers of both parties ended, and the lawsuit took a turning point. On October 2, Cisco and Huawei initially reached a settlement. At the end of July 2004, the two parties finally reached a settlement. The fight between the "lion" and "wolf" came to an end, and both sides ended in a decent way. On the surface, this is a dispute about intellectual property rights, exposing the disadvantages and loopholes of Chinese enterprises in the field of intellectual property rights, but in fact this lawsuit has fully tested the level of integration of resources and capabilities of the two companies.They have launched a tit-for-tat contest in the entire chain composed of media, customers, partners, government resources, technical strength, and legal weapons. This lawsuit reflects the differences between Chinese and Western cultures. To enter the international market, we must act in accordance with international rules.Just like Ren Zhengfei said, "You can't pick your feet when you are a guest at someone's house." Through this lawsuit, Huawei learned to participate in the game according to the rules of the game, "using the American way to win the lawsuit in the United States." This "lawsuit of the century" is a turning point in Huawei's globalization strategy. The best choice is to take the indirect route instead of fighting hard. Finding an alliance is the best choice. This is a well-known lawsuit that shocked the country and abroad.Through this lawsuit, Huawei got a blessing in disguise, gained a great reputation, quickly increased its popularity, and accelerated the pace of its overseas expansion.At the same time, it also announced to the world that there is another Huawei in China who dares to compete with the "Lion King". At the same time, it also tells domestic enterprises that it is untenable to fight a "price war". Overseas markets reject opportunism and must use strength to speak. Only independent development of their own core technology is fundamental. After a fierce contest, although Cisco gained the upper hand and retained the majesty of the overlord, Huawei caused a great shock wave to it this time.Although the lawsuit is over, the smoke in the market will never go out.The lawsuit is only the signal and the prelude to the contest between the two. Through the lawsuit with Cisco, Huawei's name began to be heard abroad.This case did not cause much negative impact on Huawei, and its sales and business volume in the international market doubled. Frank Zubeck, a strategic consulting expert at Communications Networks Architects, said: "If Cisco has a global market nightmare, it must be Huawei." After a desperate struggle, Cisco had to pay attention to this latecomer.Although Chambers visited Huawei in 2005 and broke the deadlock, fierce competition in the future is inevitable.Chambers has emphasized more than once that future competitors may come from Asia, especially China. In Chambers' view, Cisco's biggest competitor is no longer the original market giant, but a new type of Asian market represented by Huawei. company. Cisco and Huawei have launched a comprehensive competition in traditional network products from the telecommunications field to the enterprise network.Since the alliance between Huawei and 3Com, Cisco has had a lot of troubles in the Chinese market. It can only repeatedly emphasize its technical advantages and play the card of "bringing overall value improvement to users".For Huawei's strong momentum, Cisco has a big headache.However, Huawei's ambitions continue to expand, not only in the Chinese market, but also in the international market to compete with Cisco, and Cisco is even more painstaking. On April 5, 2007, at the Cisco Partner Conference held in Las Vegas, Chambers counted Cisco's new and old rivals in the form of slides, and predicted that Cisco's strongest rivals in the future will be Google, Microsoft , Alcatel and Huawei.As an industry tycoon, Cisco will never let it go. It wants to contain challengers.Huawei's newborn calf is not afraid of tigers, and he is never content to be confined to a small living space. Ren Zhengfei wants to be a world-class enterprise and bring Huawei to the world.As the competition in the world's telecommunications industry intensifies, conflicts between the world's hegemon Cisco and the local leader Huawei are inevitable. But despite the fierce competition, Cisco's giant status cannot be completely shaken in a short time.Now that Cisco has escaped the downturn, its marketing revenue has reached 34.9 billion US dollars, double that of 2003 when it filed a lawsuit, and its growth rate has surpassed that of Microsoft and other companies, and its stock price has risen sharply.Huawei still has a long way to go if it wants to be unimpeded in the US market and break through Cisco's siege.In the not-too-distant future, competition and friction will never stop, and will intensify. 2003-1-23 Cisco sued Huawei and Huawei's US branch, demanding to stop infringing Cisco's intellectual property rights. 2003-2-7 Huawei responded that it has always respected the intellectual property rights of others and stopped the sale of some allegedly infringing products in the US market. 2003-3-18 A former Huawei employee testified that Huawei copied Cisco, even with the same flaws. 2003-3-19 Huawei denied infringement and plagiarism, and accused Cisco of defaming its own image for the purpose of monopolizing the market. 2003-3-20 Huawei and 3Com cooperated to form a joint venture. 2003-3-25 The CEO of 3Com testified for Huawei, claiming that Huawei did not infringe. 2003-3-26 Cisco insisted on asking the court to order a ban on the sale of Huawei products. 2003-6-7 The court ordered Huawei to stop using the controversial code, but believed that Cisco did not have enough evidence to prove Huawei's plagiarism. 2003-6-10 The two parties refused to give in to each other, saying that they would continue to seek legal means to resolve and protect their own rights and interests. 2003-10-1 A preliminary agreement was reached, agreeing to introduce a third-party expert for review, and temporarily suspend the lawsuit for 6 months. 2004-4-6 Cisco submitted an application to the U.S. District Court, requesting the court to continue to postpone the trial of the dispute with Huawei for 6 months. 2004-7-28 A settlement was finally reached, Cisco terminated the lawsuit against Huawei, and the dispute was finally resolved.