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Huawei's Latest JV

Ray Le Maistre
9/4/2012

10:00 AM -- Huawei Technologies Co. Ltd. has formed a joint venture with Chinese enterprise IT services company iSoftStone Holdings Ltd. to target the global technology and communications sector, with iSoftStone owning 75 percent of the new venture and Huawei the remaining 25 percent. (See Huawei, iSoftStone Join Forces for IT Services.)

The focus here is on supplying outsourced IT services to technology firms -- Huawei, in fact, will be the key anchor customer for the new company. By 2015 Huawei is expected to be spending about US$190 million with the joint venture, around half of the venture's anticipated sales by that time.

So this is a big deal for iSoftStone, which generated annual revenues of $283.4 million in 2011.

For Huawei, it gives it more IT services power as it looks to build up its enterprise business. (See Huawei Makes Its Enterprise Pitch, Huawei's Enterprise Vision Gets Cloudy and Huawei Aims for $100B Annual Revenues.)

Notably, however, while iSoftStone is contributing existing business in the technology and communications vertical into the joint venture, that contribution does not include existing accounts that iSoftStone has in the U.S., where there is currently a lot of political resistance towards Huawei building its presence. (See More Chinese Whispers.)

This isn't Huawei's first joint venture, of course: The Chinese company previously had a security and storage joint venture with Symantec, but bought out its partner earlier this year. It also jointly owned a company, H3C, with 3Com, but sold its stake to 3Com in 2006. It still has a submarine systems joint venture, Huawei Marine Systems, with partner Global Marine Systems. (See Symantec Completes JV Stake Sale to Huawei, Huawei Launches Subsea JV and Huawei Accepts 3Com Offer.)

— Ray Le Maistre, International Managing Editor, Light Reading

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