Chapter 27 into the spring

In 2009, under the background of the global financial crisis, various industries have not recovered from the impact, and Huawei still maintained a strong growth momentum. In 2009, Huawei's sales revenue reached a record high of 149.1 billion yuan, a year-on-year increase of 19%; its net profit was 18.3 billion yuan, a year-on-year increase of 6.28%.Operating cash flow reached 21.7 billion yuan, a year-on-year increase of 237%. In 2009, Huawei's total annual tax payment was nearly 15 billion yuan, making it the private enterprise with the largest tax payment in the country. "Spring breeze brings warmth into Tusu", in January 2010, Ren Zhengfei quoted this poem in his freehand "2010 New Year's Message" to express Huawei's mood at the time of the handover from the old to the new.

Ren Zhengfei pointed out in his dedication: "The next 10 years - if the past 10 years were winter, the next 10 years will start with spring." We noticed that this is the first time that Ren Zhengfei has used the term "spring" in his 22 years since he started his business. In the late 1990s, Huawei, which was used to planning for a rainy day, often quoted Ren Zhengfei's story as "how long can Huawei carry the red flag".At the beginning of this century, Ren Zhengfei's dangerous words in the flourishing age - "Huawei's winter" - has almost become a warning word for everyone in the IT industry.

The "winter" argument that Ren Zhengfei has repeatedly mentioned in the past 10 years is not purely a sense of crisis, but a real reflection of reality.Of course, to a large extent, this winter was created by Huawei itself.As a latecomer in the field of communication equipment, there are many foreign equipment manufacturers. In terms of technology and strength, Huawei is not an opponent.If it wants to take advantage of the tiger's mouth, Huawei can only use its own comparative advantage of low cost to kill its opponents in terms of quotations.For this reason, the first phase of Huawei's strategy focused on market share and concentrated limited resources to conquer the city - this also caused Huawei's high debt ratio and tight cash flow.

Xu Zhijun, vice president of Huawei, believes that the improvement of Huawei's financial data and cash flow in 2009 should be attributed to some extent to the management optimization projects that Huawei has continuously introduced in recent years.For example, in 2008, Huawei hired Accenture, an international consulting company, to optimize customer relationship management. This project directly aimed at improving the company's CRM (customer relationship management) and improving the company's payment collection management, so as to improve the liquidity of "from contract to cash". .

Gartner analyst Tian Yu had previously predicted that in 2010, global telecom capital expenditures would pick up, which would drive some telecom equipment manufacturers to achieve growth.She said that because Huawei has greatly expanded its business scale in the past few years, it is normal for Huawei to slow down. According to data provided by market research firm Dell'Oro, measured by revenue, Huawei's market share in the global telecommunications infrastructure field has increased to 20.1% in 2009, nearly doubling from 10.9% in the same period of the previous year. The second largest manufacturer of network equipment, ranking second only to Ericsson.

In November 2009, Norway's largest telecom operator, TelenorASA, selected Huawei to provide equipment for its new wireless network, replacing the original equipment provided by Ericsson and Nokia Siemens. TelenorNorway CEO Kajas said at the time that the company decided to sign the six-year contract with Huawei after weighing multiple indicators such as price and technical specifications, which also includes service and equipment maintenance. In 2005, Huawei successfully entered Vodafone's "short list" and became its partner in the 21st century, which marked a major breakthrough for Huawei in Europe.In the next five years, it was the five years when the global telecommunications equipment industry structure underwent great changes and fissions. One ebb and flow, the rise of Chinese companies, and the decline and forced mergers of Western companies due to financial difficulties, became the most prominent two types of global economic recession. expression.

Where did the internal annotations of Huawei emojis come from in 2009?The two latest versions of Ren Zhengfei's Story may give you a glimpse of one or two: one is "let the people who can hear the guns make decisions", which is a sign of Huawei's management from centralization to decentralization; As a weir", the construction principle of Dujiangyan is used as a metaphor for the perfect delivery ability based on accuracy, high quality and low cost in the process of product operation and delivery. An indisputable fact is that Huawei has won a prominent position on the global telecommunications equipment stage.More importantly, in 2008, due to steady business and financial growth, Huawei has distanced itself from traditional rivals such as Nokia Siemens and Alcatel-Lucent.

Ren Zhengfei once said, "What is a winter jacket is cash flow."Under the aggressive attack of Huawei's "wolf nature", there will inevitably be a tight cash flow. It is rumored that Huawei even stopped paying high-level bonuses to relieve this pressure.However, this unfavorable competitive situation is not static. When Huawei's price strategy works and becomes a partner of operators, it will have an advantage. In the subsequent network upgrades, it only needs to quote relatively low prices, and no longer needs Absolutely cheap.In addition, Huawei can also earn stable profits from maintenance fees.

In the transition between the two situations of "seize the territory" and "defend the territory", there is a limit to the sub-health status brought about by Huawei's efforts to win market share regardless of the cost.The current situation is dominated by the latter situation, and Huawei's cash flow is bound to be tight, and its net profit is bound to be low; once the critical point is crossed, when Huawei's market share reaches a certain level, it will be in the middle of the second upgrade of the network. The profit brought by the relatively low price quoted and the stable maintenance cost is enough to support the first situation. At this time, the cash flow will increase significantly and the net profit will increase.

Huawei's 2009 annual report reflects such a critical point. The sharp rise in its cash flow and net profit reflects that this is not an ordinary year for Huawei.And the reason, as Ren Zhengfei said in the annual report, "The market scale effect has gradually emerged", Huawei has entered the spring of 10 years. Huawei survived the winter safely, and its sense of crisis has not been weakened by the arrival of spring. In May 2010, "Huawei People News" published an article on the front page titled "Cherry is delicious and the tree is hard to pick, what to do when the drought comes" The article said: "It is easy to go from frugality to extravagance, but it is difficult to go from luxury to frugality. We cannot always have a good year, and we may also encounter a dry season without rain. Everyone must maintain a good attitude and continue to work hard for a long time. Laziness It's death, and you'll have nothing."

In 2010, Huawei's sales revenue reached 185.17 billion yuan, a year-on-year increase of 24.3%. Among them, foreign market sales revenue was 120.4 billion yuan, accounting for about 65% of foreign revenue, a year-on-year increase of 33.8%. The domestic market achieved sales revenue of 64.77 billion yuan, a year-on-year increase An increase of 9.7%.The net profit was 23.8 billion yuan, and the net profit rate was 12.8%. Huawei ranked second in the world. In the next 10 years, Ren Zhengfei may be able to talk less about "winter". Huawei is already the world's second largest telecommunications equipment manufacturer. Such a market size will provide enough "ammunition" for Huawei to launch a more violent attack.On Huawei's global map, North America is the last blank area. Although Huawei's acquisition of Motorola's network equipment department has been blocked, with Huawei's strong R&D capabilities and meticulous services, it will challenge the next formidable competitor and become the world's No. A goal sprint.