Can Huawei crack the U.S. data center market?

Can Huawei crack the U.S. data center market?

Summary: U.S. Congressman says American IT buyers should steer clear of Huawei. But the Chinese networking giant is forging distributions in the U.S. in a bid to crack the data center market.

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Credit: Karen Friar

By product line, Huawei looks like any other data center equipment provider. Storage, networking and security software rolls out at a steady clip and market wins---mostly in China and emerging markets---follow.

Except for the U.S., where Huawei is a vendor that rankles national security experts and politicians regularly. When it comes to networking and telecom gear, Huawei is a relatively small player in the U.S. In fact, most IT buyers will recite the top vendors easily---Cisco, Juniper and HP. Huawei might as well not exist.

In emerging markets Huawei is much more successful. In fact, Huawei is essentially the roadblock for Cisco's global expansion. Every large technology player needs emerging markets---the Middle East, Latin America and Africa---to grow. In those emerging markets, where China isn't viewed as a security threat, Cisco more often than not runs into Huawei.

With that backdrop, the U.S. market may not even matter much to Huawei, but the company keeps trying and is eyeing an initial public offering. Whether Huawei cracks the U.S. market will be one of the key themes in to watch in the next few years. And the road is tough.

Rep. Mike Rogers (R-Mich.), chairman of the U.S. House Permanent Select Committee on Intelligence, was blunt on 60 Minutes.

If I were an American company today...and you are looking at Huawei, I would find another vendor if you care about your intellectual property, if you care about your consumers' privacy, and you care about the national security of the United States of America.

That House committee on Monday will release a report that will rate Huawei as a security risk. Huawei has also drawn fire in Australia.

More: CBS News: Chinese telecom giant eyed as security threat | CNET: Inside Huawei, the Chinese tech giant that's rattling nerves in DC | ZDNet: Huawei: We've been unfairly singled out | Life at Huawei's Shenzhen HQ: In pictures | Huawei gives IPO serious thought | Uganda orders probe into Huawei's fiber project | Huawei and Intel team up on server, cloud products | Huawei in cybersecurity pledge: 'We're not Chinese spies' | Huawei steps up expansion in Asia, EU | Huawei rails against Aus Govt 'vendor discrimination' | Despite NBN ban, Huawei reinvests profits into Australia

Nevertheless, Huawei continues with its plan to expand in the U.S. and work toward softening its image.

To wit:

  • At Interop, Huawei rolled out four storage products based on Oracle's database, Linux and VM. Huawei also provides switches, video conferencing and routers.
  • Huawei also landed U.S. distribution agreement with SYNNEX Corporation in May 2012. It followed up last week with channel deals with Communications Test Design Inc. (CTDI) and Condre Storage.
  • In addition, Huawei formed a support partnership with Essintial Enterprise Solutions Company. Tom York, Essintial Enterprise Solutions CEO, said the company was looking forward in participating in "Huawei's expansion into the U.S. market."

What will an IT buyer do? For now, buyers are likely to steer clear of Huawei. Who would want their data center dragged into a political flap? Over time, Huawei may get a foothold with pricing, products and time. First, Huawei will have to remove itself out of the political and security line of fire.

Topics: Networking, Data Centers, Security, China

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18 comments
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  • Can Huawei crack the U.S. data center market?

    only if us softens its xenophobic stance against anything not designed in the us...
    kc63092@...
    • what xenophobia?

      Since "corporations are people too", would you deal with a person who has manipulated the market, and currency, and put out toxic products (melamine, lead), won't put in regulations to improve ecologically-friendly practices, mistreats its workers, etc, etc?

      Based on a record of actions, not "xenophobia", the fears are justified.
      HypnoToad72
    • Reality Check

      Why do you think Cisco is dropping them and most companies won't give them the time of day?

      Once they are linked into your tech, they feel it is their right to use it however they see fit.
      Doubt? Wonder how Iran got a hold of those banned Cisco routers and other equipment.
      rhonin
    • There's legit concern in regards to huawei

      Like juniper, their quality is generally inferior, in addition to having bad business practices worse than those found at foxconn?
      Tea.Rollins
      • A biased fool

        That statement shows you are an ignorant, incompetent biased fool. Juniper runs the internet backbone. It is well constructed and built for speed with its separation of control plane and data plane. Like all other technology products, Juniper does have its bugs, and works to fix them. Of all the major vendors, Juniper had the lowest number of bugs over the last decade. Less than 350 compared to the thousand by CISCO and other vendors. Just like the Tea...ers, you lie even in the face of truth and facts. You can express an opinion, however it is unsupported by facts.
        kmdennis@...
  • Only if the Red Chinese

    allow free and open access to information to their citizens, stand for free elections that aren't controlled by the secret police, disband their intelligence gathering efforts, give up their efforts to exterminate the Tibetan people, you know, little things like that.

    There is only one China, and it's capitol is Taipei!
    Tony Burzio
    • so have any business with Huawei

      as if we say chian will allow facebook in any if US free hawaii ,and the only citizen in American is Indian!!
      Narcissu5
      • Huh?

        Not sure I understand that...chain?
        TheBottomLineIsAllThatMatters
  • Huh...

    not sure I understand that.
    TheBottomLineIsAllThatMatters
    • Sorry replied to the

      wrong post.
      TheBottomLineIsAllThatMatters
  • It won't matter.

    Nearly all commercial IT offerings are already made in China.

    Apple, MS, IBM, Cisco...

    If you would bother to look at the internals, it is all made in china.

    Like those smart cards for security? Made in China.
    How about those fingerprint readers? Made in China.
    Even those with "made in USA" labels... if you open them up you find the guts are made in China.
    jessepollard
    • Build vs Design

      Big difference in build-only in China by an American company vs designed [ASICs, boards, etc] and built in China by a company with link to the PLA. ASICs designed in USA, built by Taiwanese or IBM foundry is much safer that everything designed and built under control of the Chinese company.
      Arnold_Layne
      • The PLA? REALLY?

        All of the sudden this is a military conspiracy folks. I agree in general, but please at least look up an acronym before you use it. That just weekends your argument and makes you sound like an 80 year old crackpot who still weekly practices duck and cover exercises.
        Tea.Rollins
    • China has Turn Technology Up-down

      Look man lets face facts here, Look at all what is made in Chine..
      Everything looks like toils. easy to distroy, Fragile.
      Tell me how many times you have happen to change your CISCO,JUNIPA equipment?

      we need solid Technologies not just equipments and others.......
      Alphonse@...
  • Greed Vs Sensibilities

    Are there honest and forthright corporations in China? Probably there is but time after time after time many Chineses companies have demonstrated that they do not respect U.S. law. It doesn't matter if it's criminal or contractual law, they do and say whatever we westeners want to hear in order to get our business (i.e. Money). Then they ignore the law and do whatever they want. Does anyone think that on the numerous occasions that McDonalds had to recall Happy Meal toys that were made in China that there was not a contract with specific specifications (i.e. lead free paint on the toys) which the company just ignored and sent millions of the tainted toys to the U.S. Do you really wnat to trust that the company (Huawei) that may wind up supplying servers, etc to major corporations hasn't built a backdoor into their systems thereby maybe gaining access to who knows what data, perhaps your personal data - can you say identity theft a million times real fast! The Chinese government has employees who's sole job is to spend hour after hour, day after day trying and succeeding many times, to break into foriegn government and major business data systems. Why on earth would we want to hand the a key to our data door over to them.
    rbrown3012@...
    • As I said... it doesn't matter.

      As long as all your gear is made in China, you have no choice.
      jessepollard
      • Build vs Design

        Big difference in build-only in China by an American company vs designed [ASICs, boards, etc] and built in China by a company with link to the PLA.
        Arnold_Layne
      • stroyde

        No you're just thickheaded and still can't discriminate one from the other after the point Arnold Layne has made.
        Stroyde