Chinese Security Appliance Vendor Enters North American Market

Huawei Symantec Technologies, a Chinese-based maker of network security and storage appliances, announced today that it is entering the North American market by signing a distribution agreement with Synnex, a major IT products distributor. Huawei Symantec is going to begin selling its firewall, security routers, intrusion detection technology, NAS and SAN storage hardware, and other products in this region because it believes the market is poised for growth in 2011.

"It's almost like a perfect storm," said Jane Li, general manager of Huawei Symantec's North American market. "Our products have reached a mature stage and have been proven again and again. And the U.S. economy is ready to pick up again."

Huawei Symantec is a joint venture established two years ago by Huawei Technologies of Chengdu, China, and the security and storage management software vendor Symantec, of Mountain View, Calif. Symantec owns a 49 percent share of the joint venture with the rest owned by Huawei.

The deal is a "watershed event" for both companies, says Robert Amatruda, a storage industry analyst at IDC.

"It really represents a new route to market [for Symantec], which really relies on licensed and packaged data protection software. And Huawei is really looking to move upmarket beyond just selling boxes, and a partnership with Symantec is really positive," says Amatruda.Synnex, based in Fremont, Calif., is one of the top five IT distributors in North America, says Li, and Huawei Symantec considers it to be a great fit for bringing its products into this market. It already serves about 1,000 key customers in 40 countries in industries such as telecommunications, government, finance and media.

Huawei Symantec may have had to offer a compelling distribution deal to sign with Synnex, says IDC's Amatruda. Huawei does not have the brand identity of companies it will be competing with in North America--such as EMC, Cisco Systems, Hewlett-Packard and IBM-- so it would need a distribution deal with a company like Synnex to be competitive here.

Those household-name companies primarily serve Fortune 1000-size customers, Amatruda says, but below that level there is a whole ecosystem of vendors with which Huawei Symantec can compete. Amatruda speculates that Huawei Symantec may have to commit a significant amount of margin dollars to share with a distributor like Synnex to make sales.

"Having that manufacturing and knowledge base in China, where it's relatively low cost, and integrating code with Symantec, potentially they could offer the reseller community something that would be more enriching for them," says Amatruda. "One would have to infer that if they win a major North American distributor like Synnex, you better believe they would have some wood behind that arrow."