Huawei eyes storage market, after buy out of joint venture with Symantec

Last year, Huawei announced it would acquire a joint venture it had with Symantec to sell storage products

China's Huawei Technologies wants to take a bigger bite out of the enterprise market with a wider range of storage products, months after the company completed an acquisition of its joint venture with US firm Symantec.

Huawei is best known as supplier of networking equipment to many of the world's telecommunication carriers. But the company also wants to make a name for itself, with storage and server products, given the rising growth of data driven Internet and mobile services across all businesses.

"Our business is changing, and our customers' needs are changing. We need to enter these markets," said Jeff Jiang, director for Huawei's storage marketing in an interview last week.

Huawei, however, will be selling its products without the help of Symantec and its brand. Previously the two companies had established a joint venture in 2008, to sell storage systems worldwide, including North America. But earlier this year, Huawei completed an acquisition to buy out the rest of the joint venture.

The deal was made so that Huawei could better bundle its products together, by including networking, servers and storage systems, to meet all the data needs of its customers, Jiang said. "Huawei needed to be able to provide a total solution for its customers," he added.

This year, Huawei added an additional 1,000 research and development staff to its storage products. In September, the company plans to announce larger scale storage systems.

Jiang further said Huawei is heading in the direction of offering a public cloud, but declined to offer details. Previously, Huawei has said it is researching technology to provide free cloud storage to its customers.

For storage, Huawei's main market has been in China. The company passed Hewlett-Packard in last year's first half to become the country's third largest external controller-based storage vendor with an 11 percent market share, according to research firm Gartner.

But outside of Asia, the company's storage systems had gained only 0.9 percent market share by the first half of last year.

To expand, Huawei faces the challenge of raising its brand awareness while competing against major rivals HP and IBM, said Gartner analyst Jimmie Chang. "Symantec helped raise Huawei's credibility. So now Huawei will have to invest in improving its brand," he said.

At the same time, Huawei has also been forced to deal with national security concerns in the U.S., stemming from allegations that the company has close ties to China's military. This caused Huawei's joint venture with Symantec to later abandon the North American market, according to Chang.

Huawei did not immediately respond for comment on its storage business for North America.

The Chinese company, however, has seen success in selling its storage systems to its home country and other emerging markets, both of which have shown rapid growth with data center needs, according to Chang. By providing bundled products, that include servers, networking and storage, Huawei will be able to reduce costs, and offer better pricing to its customers, he added.

"Huawei has done well working with its customers in China and developing countries," he said. "I think they can have a lot of influence."

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Michael Kan

IDG News Service
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