NFV Strategies

Huawei Snaps Up Israeli Vendors

Huawei has confirmed the acquisition of two Israeli vendors, HexaTier and Toga Networks, that add to its next-gen networking and enterprise security portfolios.

Following reports in the local media, Huawei Technologies Co. Ltd. has confirmed that during the past month it "acquired both Toga Networks and HexaTier. The commercial terms of the transactions are confidential between the parties." Further details were not provided.

Hod Hasharon-based Toga Networks Ltd., founded in 2009, may have commanded a price tag of up to $150 million, according to Israeli business newspaper Calcalist.

Long-time Huawei R&D partner Toga describes itself as a "software-based system design and chip design" company that claims to have expertise in cloud computing, SDN (software-defined networking) and NFV (network functions virtualization). It is believed to have developed software-based switches, routers and cloud storage products that can be used by enterprises and network operators.

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Bnei Brak-based HexaTier is a database security company that, according to Calcalist, was acquired by Huawei for $42 million. The company, also founded in 2009, had raised about $15 million from investors including Jerusalem Venture Partners (JVP) and Magma Venture Partners, according to Crunchbase.

News of the HexaTier deal, which looks to be a fit for Huawei's Enterprise division, has been circulating for a few weeks. (See Eurobites: Is Huawei About to Buy a Security Vendor?)

Huawei, which has just announced a 32% increase in its 2016 revenues to $74.8 billion, is not known for making many acquisitions, so snapping up two companies within a month is worth noting. The Chinese giant, so far, has restricted its M&A activity to small, strategic deals, which in the past have included next-gen OSS vendor Amartus and IoT specialist Neul. (See Another Bumper Year: Huawei Sales Soar 32% to $74.8B, Huawei Buys Rump of Irish SDN, NFV Specialist and Huawei Spends $25M on Neul's IoT Smarts.)

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HardenStance 1/5/2017 | 6:41:38 AM
Where is Huawei Going In Network Security? Self-evidently, for a company like Huawei, HexaTier is the smallest of small potatoes as security acquisitions go.

It still leaves Huawei's positioning in the security space at a virtual stand-still compared with the frenetic pace and ambition of Cisco's security acquisitions of the last two to three years.

I'm honestly not in the least bit clear what Huawei's strategy is in the network security space as a whole.

Can Huawei's leadership really have decided that the political disadvantage it is at in network security is such that it can continue to sit back and allow Cisco to build up such a commanding lead in this increasingly critical space ?

If they haven't, then they must either have major - stunning - internal developments under way. Or they are planning some outrageous, eye-popping, security acquisition(s) that would catapult them into a position where they can compete with Cisco.

I'm thinking it can only be one of these three possibilities. I can't think of a fourth.

Trouble is, none of these three possibilities strikes me as very likely.

In the coming years, an awful lot is going to hinge on which way this goes.

[email protected] 1/3/2017 | 9:49:54 AM
Huawei has depth but this saves R&D time getting expertise and saving on R&D time in key areas is what this is all about -- and I wonder if this will be the start of further strategic acquisitions, particularly in the cloud/virtualization market.

I woldn't be surprised if we saw some VR M&A activity too from Huawei. 
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