Huawei Symantec Looks To Shake Up Server, Storage Market

Huawei Symantec is out to prove that it is possible to be a startup server and storage vendor with the potential to shake up the market and take on the top-tier competitors.

However, Huawei Symantec is no normal startup. The company is a joint venture between Huawei Technologies, one of China's largest electronics companies, and Symantec, the world's largest independent provider of security and storage software. And it is rapidly building an indirect sales channel to help it take on the industry's most established server and storage vendors.

Symantec declined to comment on the Huawei Symantec joint venture. However, Symantec, which owns 49 percent of the joint venture, is currently evaluating an option to acquire an additional 2 percent, which would give it controlling interest in Huawei Symantec.

Huawei Symantec was founded in Chengdu, China in 2008 as a developer of network security appliances combining the hardware capabilities of Huawei and the security software capabilities of Symantec.

Huawei is China's largest networking and telecommunications equipment supplier and the world's second-largest supplier of mobile telecom infrastructure equipment, with 2010 revenue of about $28 billion.

Huawei has a presence in the U.S. market, but was prevented from becoming a major player here by the U.S. government which in 2008 scuttled a plan by the company to acquire a stake in 3Com. Its move this year to acquire server virtualization company 3Leaf Systems was also rebuffed by the U.S. government. Both rejections were due to U.S. national security concerns about giving a Chinese company access to the U.S. security market.

However, Huawei has successfully formed joint ventures with leading IT vendors, including 3Com, Siemens, Motorola, and, in 2008, Symantec.

Huawei Symantec's U.S. office in Cupertino, Calif., was opened last year as a way to sell network security appliances and enter the server and storage markets, said Jane Li, general manager for the company's North American market.

Huawei Symantec decided to enter the server and storage markets because of the consolidation going on in these markets and because of the market growth, especially for storage, Li said.

However, unlike the typical second-tier storage vendor, Huawei Symantec brings a strong engineering focus to the business, she said. "If you look at the me-too vendors, they may have only a couple hundred engineers who can't develop all the features the market needs," she said. "We have over 3,000 engineers focused on storage and security. We focus on incorporating a lot of feature sets for the enterprise and SMB markets, and make them affordable."

As an example, Li pointed to the company's Oceanspace S2600 entry-level storage appliances which scale to up to 96 hard drives, support both Fibre Channel and iSCSI connectivity, and include software that provides replication and mirroring features for a complete disaster recovery solution as well as WORM (write once read many) capability for compliance purposes. "These are feature sets customers really need," she said.

The company also produces clustered NAS and cloud storage equipment, as well as a full line of rack and blade servers.

Huawei Symantec develops much of its own storage software, and leans on Symantec for security and file system software and for its NetBackup client software, Li said.

While Huawei Symantec, which is 51-percent owned by Huawei, is in a position to take advantage of strong growth in the China market, it decided it needed to put a stake in the North American server and storage market because of the fact that the industry is in a state of transition, Li said.

The increasing adoption of cloud computing is forcing companies to rethink how they approach IT, opening the door for Huawei Symantec to work in fast-changing markets worldwide, and not just in Asia, she said.

Next: Opening The Door To Innovation And The Channel

"Also, look at the ecosystem in the U.S.," she said. "This is a market that can make us better in innovation. The U.S. accounts for about 40 percent of IT spending. There are a lot of demanding customers here, so we have to get better. So it's important for us to have product management and R&D here."

There is another even more basic reason why Huawei Symantec has to be in North America, Li said. "Both of our parent companies are global companies," she said. "They expect us to be a global company."

Huawei Symantec currently works with about 40 solution providers in the U.S. through two distributors, Eden Prairie, Minn.-based Condre Storage and Fremont, Calif.-based Synnex.

However, Li said, the company is not targeting the custom system business.

"Historically, companies are either good at the OEM business or at the channel business, but not both," she said. "You need to be close to the customer to succeed in the channel business. OEMs focus on cost. Symantec and Huawei are two companies with a lot of motivated engineers. They look at how to get more features sets, and less at how to build for someone else."

One solution provider, Condor Storage, first started working with Huawei Symantec via Condre when a customer needed a low-cost storage infrastructure, said Jeanne Wilson, president of the Sedona, Ariz.-based VAR.

"It was very affordable," Wilson said. "The customer got two Oceanspace S2600s for under $18,000 total, and they worked great. The customer tested it by pulling out drives and RAID controllers, and found them still operating as promised."

Huawei Symantec's SAN and NAS storage lines, including its scalable NAS offerings, compete quite well with other products offered by Condor, including the entire EMC line, Wilson said. She said the main competition to Huawei Symantec is probably Dell's EqualLogic line.

"That's everybody's main competitor in the iSCSI market," she said. "Last year, EqualLogic had revenue of about $900 million. If we have to take that market $15,000 at a time, we will."

It also helps that one of the vendor's parents has one of the most recognizable brands in the U.S., Wilson said. "Symantec brings it name-brand recognition," she said.

Mpak Technologies, a Santee, Calif.-based systems integrator, is already using Huawei Symantec as a way to compete against more established scalable NAS vendors such as Isilon, Panasas, and BlueArc, said Founder and President Mike Kornblum.

Scale-out NAS customers typically sign $5 million to $20 million deals, and the performance of the Huawei Symantec hardware combined with Symantec software helped Mpak win deals with the U.S. government and a large contract at the University of Tennessee SimCenter: National Center for Computational Engineering, Kornblum said. "We're going to rock the world of the tier ones," he said.

"Huawei is the Cisco of China," Kornblum said. "They are manufacturing to carrier-grade specifications. And they have the Symantec name and the Symantec file system. NAS is just a file system, and Symantec has the fastest one."

Prior to switching to Huawei Symantec, Mpak worked with a Taiwan-based competitor, Infortrend for a dozen years, Kornblum said. He said he made the switch to Huawei Symantec after Infortrend started moving more of its business through direct marketers. It also helped that Huawei Symantec hired a former Infortrend solutions architecture, Alan Johnson, as its senior manager for customer solution and engineering, he said.

Johnson is not the only former Infortrend employee at Huawei Symantec. The company's sales manager, sales director, and others also came from Infortrend. The company also has a number of ex-EMC people.

Next: On The Competitive Front

Terry Patrick, director of the U.S. headquarters of Infortrend in San Jose, Calif., said many of those employees came to Infortrend as a group and left as a group, a move which had little impact on his company.

"It made us look deeper at our enterprise sales team, and gave us to opportunity to expand our sales strategy," Patrick said.

On the competitive front, Infortrend is focused more on such companies as NetApp, Dell's EqualLogic and Compellent products, and EMC than it is on Huawei Symantec, Patrick said.

Li said that U.S. government security concerns about parent company Huawei are not an issue for Huawei Symantec, except possibly in terms of perception by some companies in the telecom market.

"Initially, we were concerned as we brought security products to market that customers might worry," she said. "But when they found out we offer higher-end security products, they reached out to us for those products."

Huawei Symantec's partners say the U.S. government's issues with Huawei, and the company's Chinese roots, are of no concern to them and their customers.

Wilson at Condor said that no one solution fits every customers' needs, and that her company has enough made-in-the-U.S.A. products for customers who require them.

"I look at Huawei, and I see a $30 billion company, like the Cisco of China," she said. "Huawei Symantec is hiring big in the U.S. So I don't worry about it."

Kornblum said Mpak is already selling Huawei Symantec products to the U.S. government, and that what is most important for his government and non-government customers is getting the right storage products.

Indeed, Kornblum said, Huawei Symantec has an opportunity to shake up the U.S. market.

"American companies better get their [act] together and either manufacturer better products or get the government to slap restrictions on imports," he said. "I see the technology, the quality of the people, and the resources of Huawei Symantec. They're sending out people to help us do demos. They're doing what it takes to win the deals."