5 Networking Companies Trying To Break Down East-West Barrier

Sights On The Far East

Some of the most recognizable networking companies in the world are trying to break down the barrier to business in China, with the aim of capitalizing on the lucrative opportunity as the most populated country in the world starts looking to upgrade its IT.

China's information technology and communications (ICT) market will reach $465 billion in 2015, up 11.4 percent from 2014, according to a report from research firm IDC.

Cisco is investing $10 billion in China, while Hewlett-Packard is selling 51 percent of its H3C Technologies to a China-based company. It's not just the giant players in the networking industry trying to stake a claim -- both Brocade Communications and Aryaka this week unveiled partnerships with China-based companies with hopes of making inroads in the growing market.

Cisco's $10 Billion Bet

The San Jose, Calif.-based networking giant said it will spend $10 billion in China over the next several years, "marking a new chapter" in the more-than-two-decades-old relationship between them.

On June 17, CEO John Chambers and incoming CEO Chuck Robbins met with Chinese leaders and government agencies in China to unveil the $10 billion investment that includes "renewed commitment" and agreements with the Chinese government to expand new partnerships, research, investments in "next-generation" Chinese technology, and spur job creation.

Partners told CRN they see the move as a way to start rebuilding trust in the country and boost adoption of its products in order to compete with China-based networking leaders such as Huawei Technologies and ZTE.

Last year, tensions arose when China accused Cisco of helping the U.S. government in cyberespionage. In May, Cisco reported China sales had dropped 20 percent year over year for the third quarter of the current fiscal year.

Aryaka Reaches Into China Through Reseller Agreement

WAN optimization specialist Aryaka recently entered into a reseller agreement with ChinaNetCloud, a provider of server management, cloud computing and system consulting.

"Aryaka has entered the China market because we consider it a major opportunity," said Aryaka in a statement to CRN. "The poor Internet connection quality in China is a major stumbling block for corporate growth. … This is where the Aryaka solution becomes really compelling for the Chinese market."

The agreement allows ChinaNetCloud to provide managed networking solutions for customers with globally distrusted data centers using the Milpitas, Calif.-based company's software-defined WAN-as-a-Service solutions.

"As the economies of China and the United States become more and more interconnected, global businesses must find ways to facilitate collaboration," said Mark Fogel, vice president of Global Service Provider Alliances for Aryaka, in a release.

Brocade Forms New OEM Agreement With Sugon

On June 24, the San Jose, Calif.-based networking vendor unveiled an OEM partnership with China-based computing vendor Dawning Information Industry Co., known as Sugon in China. The alliance is focused on integrating Brocade's VCS Fabric technology with Sugon's data center solutions specifically for the Chinese market. Brocade switches will also be combined with Sugon's flagship blade server product line.

"With the greatest number of Internet users in the world, China is a very important market for Brocade," said Adam Judd, vice president for Asia-Pacific at Brocade, in an email to CRN. "Every day, more than 600 million users go online in China, which causes significant strain on older network infrastructures. … Brocade's partnership with Sugon aims to help service providers and enterprises in China meet these requirements by giving them the agility to transition their data center networks through a more flexible open and software-driven approach."

VMware Inks Deal With China Telecom

Earlier this month, Hong Kong-based telecom giant Citic Limited launched a VMware powered Desktop-as-a-Service solution, SmartCloud, touting it as a cost-effective and easy-to-manage desktop solution.

In December, Palo Alto, Calif.-based VMware also struck a deal with China Telecom to deliver hybrid cloud services. Through the agreement, VMware will deliver its hybrid cloud services through China Telecom.

"VMware [is] expanding its position in the Chinese market, inking a deal with China Telecom to deliver vCloud Air hybrid cloud services to the national market," said VMware in a statement to CRN.

HP Sells Majority of H3C Businesses To Chinese Firm

Hewlett-Packard revealed a partnership with Beijing, China-based Unisplendour Corp., a subsidiary of Tsinghua Holdings, in which Unisplendour will purchase 51 percent of its stake in a new business H3C -- comprised of H3C Technologies and HP's China-based server, storage and technology services businesses.

"HP is making a bold move to win in today's China," said HP CEO Meg Whitman in a statement announcing the H3C joint venture.

Palo Alto-based HP reported an 11 percent sales drop in its networking business for its first quarter ending Jan. 31, stemming from sales decline in China. HP has since made leadership changes in China and implemented new sales incentives.