3Com's H3C Explores US Options

DALLAS -- H3C Technologies, the scrappy Chinese subsidiary of 3Com, is living up to its word -- sort of. The IP storage networking company said this summer that plans were underway for a stateside rollout of its iSCSI product line, which dominates China's IP SAN market. And indeed, H3C will unveil its products for the first time in the U.S. here at the SNW trade show tomorrow. What's missing is the actual U.S. sales channel.

While 3Com mulls a pending buyout by Bain Capital Partners, H3C's actual strategy to sell its products in the U.S. is still being formulated. Shows like this one will be instrumental in helping 3Com and H3C evaluate the market opportunities for the company's iSCSI lineup.

"We're not sold in the U.S., but we are at SNW because it is international, and we are looking at possible partnerships," said Arthur Lee, president of H3C's storage product line.

H3C's iSCSI line has been substantially upgraded in recent months. New products include the IX3000, a series that Lee claims improves the performance of the vendor's first series of iSCSI SANs by an order of magnitude. These arrays feature dual-controller support of up to 252 Tbytes in 336 SAS and SATA drives. While the first iteration supports iSCSI only, a Fibre Channel interface will be offered in the first quarter of 2008, H3C says.

Also in the first quarter, H3C will introduce the IX3620, a high-end 10-Gbit/s iSCSI SAN with a 12-Gbit/s SAS switching architecture. This product is suitable not only for enterprises but carriers, Lee notes.H3C is also showing the DL1000, a VTL that can be linked to existing tape backup environments and for which H3C OEMs software from FalconStor.

Lee is quick to qualify H3C's reliance on FalconStor, or any partners. "Functions such as snapshots and replication are provided by FalconStor, but the underlying operating system is ours," he asserts.

Nonetheless, H3C continues to rely heavily on outside help, particularly for software -- a situation the company seems determined to change. Companywide, H3C invested over 15 percent of sales revenue in R&D last year, and it prides itself on holding over 40 patents in IP storage.

What's more, even though H3C also uses chips and controllers from Intel, Intransa, and Xyratex, the company is ready to cut the ties that bind at any time. Earlier this year, for instance, H3C made it clear that some buggy chips nixed the participation of iVivity in H3C's current lineup.

In China, H3C claims over 800 customers in 50 industries, including China's Ministry of Science and Technology, China Mobility, and Sohu.com, an online service provider. The supplier has a 52 percent share of the IP SAN market there, according to IDC figures. EMC is currently H3C's biggest threat at home, and it is likely to be in the U.S. as well.H3C will need to form strategic distribution alliances stateside if it plans to go ahead and compete. In China, the company deploys more than 2,000 distributors and resellers to sell its storage wares.

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