Huawei Teams With Synnex For All-Out U.S. Channel Offensive10:00 AM EST Mon. May. 07, 2012
Huawei Technologies on Monday confirmed a full-fledged U.S. distribution agreement with Synnex, marking an important step in Huawei's building of its U.S. channel capabilities and its overall enterprise presence in North America.
Huawei's switches, routers, storage and videoconferencing products are now offered through Synnex's ConvergeSolv Secure Networking business unit. Synnex is already taking orders for Huawei products and will start to demo Huawei wares in its proof-of-concept labs in Greenville, S.C., and Fremont, Calif.
Peter Larocque, Synnex president for U.S. distribution, said Synnex had had a previous relationship with the Huawei-Symantec joint venture and that signing on Huawei as enterprise supplier was an important move for the distributor.
"We've been very excited to bring Huawei to the U.S. market and to our partners," he told CRN. "We had the Huawei-Symantec relationship for about 18 months on the security side and that gave us the ability to sell networking products as well, and what we saw from that is that the company had made significant investments in the business, especially in technology. What they've achieved made us feel very comfortable working with Huawei."
Larocque and Synnex also had a relationship with Rob Claus, vice president of Huawei's U.S. enterprise channel business. Claus, who joined Huawei last fall, held various channel and distribution executive positions at HP and ShoreTel over the past three years and had previously spent nine years at Polycom.
"I've known them, and this is a natural fit for us," Claus told CRN. "This is a very busy time for Huawei. We're developing our go-to-market strategy. Among the things we're concentrating on, the first priority was distribution. We entered into some conversations with Peter and his team, and this has made a lot of sense for both of us."
Huawei last fall debuted a U.S. channel program, part of the overall launch of its U.S. Enterprise Group, which is itself part of a global Enterprise Business Group Huawei formed in 2011 during a corporate restructuring.
Huawei executives told CRN at the time that the company's goal is to do 100 percent of its enterprise sales in the U.S. through channel partners. In March, Huawei rolled out both a training and certification program and a global enterprise channel program structure that organizes partners into distributors, VARs, and Silver-, Gold- and Platinum-level Huawei partners.
NEXT: Why Synnex And Huawei Make Sense
Huawei plans to add other distributors, Claus said, but at a smaller scale, and that it intends U.S. resellers to source Huawei products through Synnex. Huawei has not said much about how many U.S. solution provider partners it has brought on thus far, but Claus told CRN the company is in late-stage talks with close to 30 VARs.
"I've met with a lot of partners, and the response is that this is a great opportunity -- this is the beginning of something big," Claus said. "Our goal is to get quality resellers that can see the opportunity here. And they're reaching out to us, too."
Huawei Enterprise did roughly $3.8 billion in sales contracts in 2011, according to the company, up from $2 billion in 2010. But, Huawei overall has seen recent setbacks, too; while its sales increased 12 percent year-over-year in 2011 -- Huawei posted about $33 billion in annual revenue -- its profit dropped 53 percent year-over-year. Huawei chief executive, Ren Zhengfei, recently said Huawei would institute a system of rotating CEOs, with each leader heading the company for six months.
Huawei has sought a greater global enterprise footprint for some time, though continued allegations over its chief executives' ties to the Chinese military have stalled its efforts to break into the U.S.
Some channel partners had gotten a taste of Huawei through the Huawei Symantec venture, but Huawei bought out Symantec's stake in that venture for $530 million. Huawei Symantec's North America operations shut down in January.
There's another key reason Synnex is a fit for Huawei: Unlike rivals Ingram Micro and Tech Data, Synnex does not carry Cisco products. Cisco and Huawei have an emerging rivalry, and Cisco CEO John Chambers has spoken publicly of Huawei as perhaps Cisco's most formidable long-term competitor.
NEXT: Huawei Rivals The Competition, Cisco
There's plenty of room for Huawei to compete against Cisco and all other networking challengers, said Bill Plummer, Huawei's vice president of external affairs.
"There's a thirst for new and competitive alternatives to what has been offered for the last 10 years, and we can leverage our global scope and scale to offer that," Plummer said. "We have 65,000 employees in R&D. We have more people in R&D than Cisco has employed. [Synnex] is a great partnership to help us meet the demand."
"There's plenty of market out there for someone like Huawei," Synnex's Larocque said. "They have a very solid lineup of goods. This is a very significant company with a huge amount of R&D and tons of customers globally that they do business with. A lot of people on the solution provider side will like the product story, completeness and innovation they can bring."
Cisco's recent saber-rattling against Huawei -- Cisco Executive Vice President Rob Lloyd recently painted the company as untrustworthy for partnering -- is "puzzling," said Plummer.
"Competition drives more innovation and alternative products," Plummer said. "Frankly, that's the environment in which Cisco initially succeeded, but now it's having a difficult time maintaining its position in an increasingly competitive marketplace. Most everyone would be better served if we just compete on the merits of our solutions, and not have to be distracted with all this rhetorical business."