Well welcome to one of the Huawei’s exhibition centers. As you can see behind me, there’s a whole host of equipment like microwave technology. And those come from a wide range of supply chains. So take a simple example of microwave technology: we have an R&D center (which we have more than 20 around the world) but our R&D center for microwave is based in Milan. Yet we take our compression algorithms from the world’s best scientist and mathematicians in Moscow. And then we apply that to Chinese technology and manufacturing.
So you can take a very simple technology and you can see how that comes from around the world. So when we look at this from a global supply chain: not only do we have R&D centers around the world, we have joint innovation centers around the world, and we buy our components from around the world. So for example, when we look at the componentry in Huawei equipment, more than 2/3rds comes from non-Chinese organizations with our biggest provider: America, at 32%. We spent over 6.6 billion dollars on American components in 2011. So from a cyber security, we not only need to secure our supply chain, we need to security the supply chain of our suppliers as well.
So when you look at cyber security, it’s not just about bits and bytes, it’s not just about software, it’s about people, it’s about processes, manufacturing, plants distribution, air freight: all of those things, we need to cover. I talked before about some of our infrastructure products, like microwaves and of course we do base stations and all kinds of technology for the telecommunications industry. But of course from a cyber security perspective, what you carry in your pocket: the mobile phone, the PDA, or your iPad or MediaPan are just as important from a cyber security. Because it’s not just the technology, it’s the applications that we download. It’s our personal data.
So how do you know when you are downloading an application, from some application store in the world, what exactly is that application doing? Is it capturing your personal data, is it copying your contacts and selling them into some distant cloud in an unencrypted way, is it beginning to copy what your doing from any online banking that you’re doing. So we’re going from a cyber security perspective, it’s not just worrying about the technology, it’s worrying about human behavior, it’s worrying about data, it’s worrying about everybody else’s services, and that’s all part of Huawei’s ends to end process. I talked earlier about carrier or infrastructure uh cyber security as well as device cyber security but of course corporate enterprises big business and small business all use technology as well. And as we can see here, we do everything from health systems to education systems to cloud computing to smart grids to smart data centers. Some of that technology is used via 3rd parties, and therefore we’re part of an ecosystem, so whenever we look at cyber security, we need to look at what’s required in the ecosystem for the technology that we’re using.
Welcome to one of our manufacturing centers just outside Shenzhen, we also outsource some of our manufacturing. In this building, we particularly focus on some of the newer equipment and some of the customized equipment we provide for our customers. As you know from a cyber security perspective, you have to cover everyting from the whole lifecycle, from suppliers, to components to people. So we’ve showed you some of the scale of Huawei manufacturing, but it’s not just about scale, it’s about sophistication, you cannot hope to produce world class products unless you use world class technology. But as you all know from other walks of life, you cannot bolt quality onto a product, and nor can you bolt on cyber security. Cyber security has to be built-in to everything thing you do. So for instance, in our manufacturing, we can trace 90% of all components: where they have come from, what products they have ended up, and where have they gone to. All this is about our end to end cyber security strategy. Many cyber security threats come from the very inside. So if you don’t know what the incentives are, the disincentives, the rules and regulations, many attacks certainly can be perpetrated by insiders. At Huawei, we take the care and comfort of our people very seriously because it helps us drive down cyber security.