An Interview with Ding Xiangen, Founder and General Manager of Jiangsu Huali Networks Engineering Co., Ltd.

Ding Xiangen, Founder and General Manager of Jiangsu Huali Networks Engineering Co., Ltd.

Innovation has been a rather modern jargon nowadays, and is a concern to everyone and every enterprise. What is innovation? How does one innovate? For the medium and small-sized enterprises in China, how can they maintain sustainable development through innovation? These are the questions frequently asked by enterprisers. Actually, there are no set rules for innovation and the answer varies by enterprise. The key lies in whether it is in tally with the characteristics of a company’s specific enterprise and will promote its long-term development. Jiangsu Huali Networks Engineering Co., Ltd. (Huali Networks for short) shares with us its own innovation story.

Huali Networks’s 13 years of development involves 13 years of innovation. Ding Xiangen, Founder and General Manager of the company, told this journalist about its innovation philosophy: “To innovate is to optimize every detail. We make innovations in R&D, management and corporate culture, and play the ‘combination blow’ to respond to the tough market competition.” More specifically, Huali Networks’s innovation actions are detailed in the following aspects:

A path of changes led by creative minds

In 1993 when Mr.Ding was working in a state-owned shipyard, he was enlightened by Deng Xiaoping’s southern tour speech and decided to plunge into the commercial sea. He did not blindly follow trade or real estate development and such prevailing “commercial voyages” at that time, but took advantage of his knowledge and working experience and chose computer skill training to play to his strengths. In the following years, Mr. Ding monitored the ongoing trends of network development and devoted himself to network technique study and research. In 1997, he set up Jiangsu Huali Networks Engineering Co., Ltd.

Mr. Ding briefed the history of Huali Networks,“I was working on network engineering at the beginning, and started doing network equipment in 2002; thinking about to combine the router, firewall and exchange into one component. I submitted this idea to R&D that year, and we worked out the first prototype in 2006, which received authoritative acclaim. From there our business blossomed and formed an industrial bridge from network engineering to network equipment. In 2008, we entered the networking chip area. Now, we have become a network engineering group diversified in network engineering, system integration, network equipments and networking chips.”

From the foundational network engineering to the middle-end synthesis network equipment, then to the cutting-edge 10Gb networking chip, Huali Networks maintains its steady development by exactly following Mr. Ding’s strategic goal of, “flooding the entire network with Huali’s technology.”

“Next, we will have our company listed on the GEM to attract more capital and talents, and to achieve our far higher goal–to beat Silicon Valley enterprises in chip technologies in ten years,” said Mr. Ding.

The “convergent mode” accomplished by using integral network equipment

The history of Huali Networks is a history of innovation. Innovation has penetrated into every aspect of the company’s business operation and R&D product.

“To connect all the computers of a company to the Internet, you have to do a lot of work: connecting network cables, installing firewalls, and buying routers and exchanges (especially the multilayered exchanges)… This is a time and money consuming process. For a set of network equipment capable of 1Gb, a firewall costs more than 70,000 Yuan, a router more than 50,000 Yuan, and a multilayered exchange more than 30,000 Yuan. That is at least 150,000 Yuan you must pay. Then we asked ourselves: Can we replace the three pieces of equipment with one that serves the same functions at a lower price?”

The answer is yes. Mr. Ding and his R&D team developed “EWONT” convergent network equipment, which converges the functions of a 1Gb firewall, 1Gb router and 1Gb multilayered exchange into one piece of equipment, and considerably lowers the price. This technology opened up a new epoch for convergent network hardware devices. Based on this technology, Huali Networks developed many new network devices and earned a good fortune, which in return made the company financially and technologically prepared for the coming innovations and development.

The new high of innovation realized by 10Gb networking chips

Chip technology has been a tender spot for Chinese enterprises for a long time, allowing the market to be dominated by foreign enterprises in either VCD chip or PC chip or networking chip fabrication. To this end, Huali Networks is devoted to developing China’s own networking chips and breaking the American monopoly. Mr. Ding is clearly aware of the importance of chip technology: “Chips are the core of electronic and IT equipment. A nation without leading chip technologies is a backward nation and in bondage to those with advanced chip technologies. If we master this core technology, we will acquire pricing power and the market leadership. Therefore, we have spent a lot of time and money on chip innovation. With no example to follow, we totally rely on ourselves. Chip development consumes a lot of time, money and energy. If the design fails, all the investment will disappear.”

“We have spent more than 10 million Yuan recruiting high-tech intellectual talents. Now we have three Chinese Americans whose annual pay reaches 1 million Yuan, and will soon have one more in this rank. Next month, we will go to the Britain to look for talents, and plan to increase the number of 1 million Yuan annual pay owners to 6-10 by the end of this year.” “Now our chips are under fabrication testing. We believe that networking chips with our independent designs will soon come to the market!” Every time they are talking about the coming success of their “10Gb chip,” Mr. Ding and his team are filled with pride and confidence.