Huawei And U.S. Spying: 'Snowden Revelations Level Playing Field On Both Sides'

Huawei is publicly remaining coy about reports that the U.S. National Security Agency hacked the Chinese tech giant's software as a way to gather information about its customers and technology.

However, Huawei employees, who have for years been fending off concerns from the U.S. government and competitors like Cisco that Huawei is a conduit for Chinese government spying activities, are off the record quite happy at the turnaround accusations.

The New York Times and the German-based Spiegel in March reported that secret NSA documents released by Edward Snowden, a former employee of an NSA contractor, revealed moves by the U.S. spy organization to infiltrate Huawei to gather information on customers and to break Huawei's software source code.

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Security issues have not necessarily been a deal-breaker for channel partners, although the question of whether Huawei's equipment poses a security threat does come up, said Steve Rovarino, president of Red Rover, a Reno, Nev.-based solution provider and Huawei partner.

"Customers talk about security," Rovarino said. "It eventually comes up in the conversation. It may not be with the initial person we talk to, but when it goes through budget, the question comes up. Some projects get delayed, and some cancelled. Most of these predated the NSA situation, before it came to light."

For customers who keep up with the Huawei situation, the NSA news balances the security question, Rovarino said.

"They joke about who is watching who[m]," he said. "But there has been a lot more bad news about Huawei over the years than the one thing from the NSA. But customers look at technology and price, and if they're open-minded, they eventually come around."

Security is not an issue that has impeded sales, said Don Hows, manager of online and distribution channels for Daystrom Technology Group, a Half Moon Bay, Calif.-based solution provider and Huawei storage partner.

"If anyone gave the stories about Huawei's security credibility, it hasn't been an issue in storage," Hows said. "Storage is at the end of the line. It's not like putting in core switches where the risk is more of a potential issue."

Eric Xu, rotating CEO of Huawei, said during a question-and-answer period after his keynote at the Huawei Global Analyst Summit, held last week in Shenzhen, China, that there were both "good and bad impacts" from what were termed at the event the "Snowden revelations."

NEXT: Huawei Cites Good, Bad Impacts From The NSA Revelations

Speaking through an interpreter, Xu said there is no big impact on Huawei's growth from the revelations.

"But there has been much impact on our workloads, in communicating with influencers and others," he said. "It's very tiring."

Ken Wang, president of global marketing and solutions, later replied in Chinese to a reporter's question about the NSA's actions, saying Huawei is open to working with all governments.

Scott Sykes, vice president of Huawei's Media Affairs department, responded to a question about the Snowden revelations during a wrap-up question-and-answer period with the media that the security of Huawei's solutions should not be an issue.

"We have an impeccable track record. ... It would be illogical and impossible today to build a $40 billion business if we weren't careful," Sykes said.

Huawei, Sykes said, just does not present a security issue, and takes care to stay out of geopolitical issues. "If it were ever proven [that Huawei posed a security risk], we would lose 65 percent of our business overnight," he said.

However, Huawei spokespeople were more blunt off the record, and could barely hide their joy at the reversal of the spying accusations.

One spokesperson told CRN off the record at the Huawei Global Analyst Summit that the Snowden revelations take pressure off Huawei while adding pressure on the U.S. government.

Another spokesperson, also speaking off the record, at first told CRN that the Snowden revelations help make the case that Huawei is indeed not guilty of providing a means for Chinese spying on the U.S.

However, when reminded by CRN that allegations of NSA spying on Huawei do not necessarily negate U.S. allegations of China using Huawei to spy on the U.S., the spokesperson agreed that the Snowden revelations cannot be used to automatically whitewash U.S. concerns about Huawei.

Instead, the spokesperson said, the Snowden revelations "levels the playing field" between Huawei and the U.S. government and U.S.-based competitors. "It has caused a reset of the trust issues on both sides," the spokesperson said.

PUBLISHED MAY 2, 2014