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12 July 2024

Huawei launches in-house software system after being cut off from US services

By Reuters

China's Huawei Technologies (HWT.UL) said on Thursday it is replacing internal software management systems it once sourced from U.S. vendors with its own in-house version, hailing it as a victory over U.S. curbs that once threatened its survival.

Huawei held an internal ceremony to celebrate the switch to its own 'MetaERP' (enterprise resource planning system) in Dongguan, south China on Thursday, attended by the Huawei's rotating Chairperson Meng Wanzhou, the daughter of the company's founder Ren Zhengfei.

ERP software is used by companies to manage key business operations ranging from accounting to supply chain management.

"We were cut off from the old ERP system and other core operation and management systems three years ago," said Tao Jingwen, a Huawei board member and president of its quality, business process and IT management department.

"Today we are proud to announce that we have broken through that blockade, we have survived!"

The in-house Meta-ERP has been rolled out across 80% of the company's business, Huawei said in a news release.

While Tao's speech did not mention if Huawei intended to commercialise its ERP system and compete with the likes of Oracle and SAP, it provides a potential new business line for the company which has been expanding into areas in a bid to survive under U.S. pressure.

In May 2019, the U.S. Commerce Department added Huawei to a trade blacklist over alleged security concerns the company denies.

The listing and several successive rounds of trade sanctions hobbled Huawei's ability to source items made with U.S. technology.

It also cut it off from servicing and patches for ERP tools it largely purchased from Oracle Corp (ORCL.N), according to a person familiar with the matter.

The cut off was a "massive crisis" for Huawei, Tao said in his speech, saying that the old system had been core to the company's operations for over two decades.

 "Not having access to ERP became Huawei's 'Dadu River' that blocked our way forward and threatened our very existence," Tao said, referring to a famous escape for China's Red Army during the country's civil war.

Huawei's 'meta-ERP' system is a 'cloud-native' product, which uses the company's cloud-computing systems for greater efficiency than traditional ERP products, the person said.

While the older system was like "a massive old building in disrepair," the new system has been fully tested and is processing 15 million lines of accounting entries daily, Tao said.