The Symantec-Huawei Technologies joint venture had broken down because the American IT security giant feared its affiliation with the Chinese telecommunications equipment maker would prevent it from obtaining classified information from the U.S. government about cyberthreats, reports The New York Times.
Quoting sources familiar with the matter, The New York Times reported on Monday that Symantec's decision came as a pre-planned political move to coincide with the U.S. government's efforts to share more classified cyberthreat information with the private sector. The sources, who declined to be named because they were not authorized to speak, added that Symantec was "worried" its ties to Huawei would put the IT security vendor at a disadvantage with the U.S. government.
Symantec declines to confirm or deny report
When contacted by ZDNet Asia, a Symantec spokesperson declined to deny or confirm the report.
"The New York Times story was based on rumors and speculation and I'm not going to speculate one way or the other," he said. "The fact of the matter is, as Symantec's CEO Enrique Salem said back in November, the reason we are selling our stake in the JV is because we met our objectives for getting into the venture in the first place."
Symantec added that its position was consistent and had not changed since it announced its intention to sell its stake in the joint venture.
Huawei did not reply to queries from ZDNet Asia by press time.
The joint venture, called Huawei Symantec Technologies, was formed in 2007 to develop and distribute security and storage appliances to telecommunications carriers and enterprises worldwide. In November last year, both companies announced Symantec would sell its 49 percent stake in this company to Huawei for US$530 million. Symantec CEO and President Enrique Salem said in the statement: "Symantec achieved the objectives we set four years ago and exit the joint venture with a good returns on our investment, increased penetration into China, and a growing appliance business."
Wheels in motion for handover
This handover is expected to be processed over the next two weeks. According to The New York Times report, sources said Huawei earlier this month laid off several workers in the Huawei-Symantec offices in Silicon Valley and was planning to move its entire operations out of the U.S., mostly because of increased American government oversight.
However, Huawei spokesperson William Plummer told the American daily that both companies enjoyed a "positive experience" in the joint venture. He added that Huawei would streamline the organization market by market including the United States.
In the November statement, Salem described China as one of Symantec's fastest growing markets, growing 46 percent over its last three fiscal years. He said the IT security vendor remained committed to ongoing investment in China and to building "additional relationships in the region".
The U.S. government in November initiated an investigation to assess national security threats from the presence China's networking vendors in the country, including Huawei and ZTE. American lawmakers also had called for investigation into the Chinese company for supplying sensitive technology to Iran and violating a 2010 sanction law. Huawei, however, dismissed the probe and said it had been based on "inaccurate media reports".