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Huawei will have tough time cracking U.S. data center market

Congressman says American IT buyers should steer clear of Huawei, but the Chinese networking giant is forging distributions in the U.S. in a bid to crack the data center market.

2 min read
Preview: Huawei
The Chinese telecom giant Huawei, a global company already doing business in the U.S., may pose a security risk to the U.S. government, industry and citizens says the U.S. House Intelligence Committee. CBS

By product line, Huawei looks like any other data center equipment provider. Storage, networking, and security software rolls out at a steady clip and market wins -- mostly in China and emerging markets -- follow.

Except for the U.S., where Huawei is a vendor that rankles national security experts and politicians regularly. When it comes to networking and telecom gear, Huawei is a relatively small player in the U.S. In fact, most IT buyers will recite the top vendors easily -- Cisco Systems, Juniper Networks, and Hewlett-Packard. Huawei might as well not exist.

In emerging markets Huawei is much more successful. In fact, Huawei is essentially the roadblock for Cisco's global expansion. Every large technology player needs emerging markets -- the Middle East, Latin America, and Africa -- to grow. In those emerging markets, where China isn't viewed as a security threat, Cisco more often than not runs into Huawei.

With that backdrop, the U.S. market may not even matter much to Huawei, but the company keeps trying and is eyeing an initial public offering. Whether Huawei cracks the U.S. market will be one of the key themes in to watch in the next few years. And the road is tough.

Rep. Mike Rogers (R-Mich.), chairman of the U.S. House Permanent Select Committee on Intelligence, was blunt on "60 Minutes."

If I were an American company today...and you are looking at Huawei, I would find another vendor if you care about your intellectual property, if you care about your consumers' privacy, and you care about the national security of the United States of America.

That House committee on Monday will release a report that will rate Huawei as a security risk. Huawei has also drawn fire in Australia.

This article originally appeared on ZDNet's "Between the Lines."