Huawei, a China-based $28 billion telecom powerhouse, is looking to make a big play for the enterprise networking market with the introduction in the U.S. market of a complete Ethernet networking line via its Huawei Symantec subsidiary.
Huawei Symantec's move to enter the enterprise networking market not only adds a new competitive threat to such companies as Cisco, it also sets the company up to prepare for war with its rivals in the nascent converged infrastructure market.
The news was unveiled during Huawei Symantec's first-ever North America Partner Summit, held this week in Cupertino, Calif.
Huawei Symantec 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.
Huawei claims to be the world's second largest provider of networking equipment to the service provider market, citing numbers from analyst firm Infonetics.
However, the company also has a large and growing line of enterprise networking gear, and is looking to its Huawei Symantec subsidiary to help it break into the U.S. market.
The Huawei Symantec networking push is being lead by Jun Xu, the company's solutions architect who until a week ago held the same position at Brocade. Prior to joining Brocade in December of 2010, Xu spent about five years at Cisco as a senior software engineer.
The Ethernet switch market is a crowded one, but one where Huawei Symantec can differentiate itself with a nearly complete line of enterprise infrastructure equipment as well as total solutions including networking, server, storage, and security products, Xu said.
The company can also go toe-to-toe with anyone, especially Cisco, on price, Xu said. "A lot of companies compete with Cisco," he said. "But Huawei Symantec can offer a better price if you're just competing on a box level."
However, competing on the box level is only the beginning for Huawei Symantec. Xu said the company has a plan to integrate the management of its different products over time. "Huawei has an extensive software division of 7,000 software developers to do network management," he said.
The company is currently building a proof-of-concept lab to test the integration of its SAN and LAN switches and firewall security products, and is working to qualify its switches for a variety of solutions, Xu said.
Huawei Symantec's push into the networking business comes at a time when the market leader, Cisco, is going through a painful restructuring process.
Cisco on Monday said it plans to cut its workforce by about 6,500 people, including 2,100 employees who took advantage of a voluntary retirement program. The company also sold a Mexican facility to Foxconn Technology Group, which means the loss of an additional 5,500 employees.
For companies like Huawei Symantec, this means an opportunity to hire experienced Cisco personnel.
Morgan Stanley, in a research report on Cisco's planned layoffs, wrote, "We suspect Cisco may have lost some of its better employees in the voluntary retirement program, since people accepting packages are likely those that have confidence in their ability to find new jobs."
In that same report, Morgan Stanley called Huawei Symantec a potential threat to Cisco.
"We also remain fearful that Huawei could reemerge as a force in the switching and routing markets in North America, and we understand Huawei is building a presence in Silicon Valley. We would not be surprised to see ex-Cisco employees show up there or at other competitors, a long-term risk for Cisco," the analyst firm wrote.
That already seems to be the case. Jane Li, general manager of Huawei Symantec, said that her company is not specifically targeting Cisco as a source of new employees. "But we are starting to see more Cisco resumes from recruiters," Li said.
Next: Lots Of Switches, But Does It Have Potential In The U.S.?