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Huawei Replaces US-Sanctioned Software System with New In-House Service

UTC by Tolu Ajiboye · 3 min read
Huawei Replaces US-Sanctioned Software System with New In-House Service
Photo: Depositphotos

Chinese tech giant Huawei announced the replacement of its software system as a victory over US sanctions. 

Huawei has launched an in-house software system to replace its one-time US-sourced internal software management systems. The Chinese multinational tech corporation announced today, almost four years after the US sanctioned it over alleged security concerns.

In May 2019, the US Commerce Department included Huawei in a trade blacklist which ultimately hampered the company’s ability to source US technology. However, the recent Huawei self-generated software system announcement is a victory over sanctions that once threatened the company’s survival.

Huawei held an internal ceremony in Dongguan, heralding a transition to its custom ‘MetaERP‘ system. This enterprise resource planning system replaces the items and tools the Shenzhen-based company used to purchase from Oracle (NYSE: ORCL).

Speaking at the Huawei internal ceremony, which was attended by the Chinese tech giant’s rotating Chairperson, Meng Wanzhou, board member Tao Jingwen explained:

“We were cut off from the old ERP system and other core operation and management systems three years ago. Today we are proud to announce that we have broken through that blockade; we have survived!”

Huawei Relied on Older Third-Party Software System for Two Decades Before Birthing New In-House Initiative

Huawei had relied on the old system to power its operations, from accounting to supply chain management, for more than 20 years. Hence, Tao described the US cut-off as a “massive crisis” for the Chinese tech heavyweight.

Furthermore, Tao, who also serves as president of Huawei’s quality, business process, and IT management department, added:

“Not having access to ERP became Huawei’s ‘Dadu River’ that blocked our way forward and threatened our very existence.”

Tao’s ‘Dadu River’ reference calls back the Chinese Red Army’s famous escape during the East Asian country’s civil war between 1927 and 1949. The escape analogy is also fitting because ERP software is critical to a company’s key business operations.

In a news release, Huawei said it rolled out its in-house Meta-ERP system across 80% of its business. However, whether the company will commercialize its ERP system and potentially compete with out-and-out software solution providers like Oracle remains unknown. Nonetheless, Huawei’s in-house software development opens a potential new business opportunity for the firm to expand into other areas.

Reports state that the new Huawei ‘meta-ERP’ system is a product native to the cloud. In addition, the company’s in-house software system deploys its cloud-computing functionality for improved efficiency compared to traditional ERP products. Tao likened the older system to a “massive old building in disrepair.” However, the Huawei board member described the new software as thoroughly tested and capable of processing millions of accounting entries daily.

Largest Huawei Annual Profit Decline on Record Occurred in 2022

In late March, CoinSpeaker reported that Huawei posted its most significant annual profit decline ever in 2022. The annual profit decline resulted from China’s stringent pandemic controls that also impacted several other businesses.

Last year, Huawei suffered a massive 69% annual profit drawdown year-over-year (YoY) to 35.6 billion yuan ($5.18 billion). The figures were the lowest since 2011 when Huawei saw a 54% decline in annual profit.

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