Huawei's Storage Shake-Up

Huawei's $2.2 billion acquisition of 3Com is just one example of the growing technological might of China, even if the impact on H3C's long-term storage plans is still unclear.

Earlier this year, 3Com bought H3C, a joint venture it set up with Huawei in 2003. Since then, H3C execs have revealed their desire to sell low-cost iSCSI SAN gear in the U.S.

Last week's all-cash acquisition by Bain Capital Partners, which is expected to close in the first calendar quarter of 2008, sees Huawei chipping in as partner and receiving a minority stake in 3Com, although the size of this stake has not yet been revealed.

The topic of storage did not crop up during Friday's conference call to discuss the acquisition, despite H3C's recent moves in this space.

In China, H3C uses more than 2,000 distributors and resellers to sell its storage wares. Although these offerings are based on commodity storage hardware, the vendor also uses chips and controllers from Intel, Intransa, and Xyratex, and software from FalconStor.Just to complicate matters, Huawei set up another joint venture a few months ago, this time with Symantec. It is still too early to say what impact this deal will have on vendors such as FalconStor, Intransa, and Xytratex, although the overall impression is one of Huawei slowly increasing its stake in the storage world.

The $2.2 billion spent to acquire 3Com is, after all, close to the on-paper value of H3C, although it is going to be some time before we see the real storage shake-out from this deal.

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