DoSTOR June 8,2007: Recently, we went to Hangzhou and interviewed Wu Jingchuan, President of H3C global sales and marketing. Let's have a look at H3C's story.

Wu Jingchuan, President of H3C global sales and marketing 

When it was born  

When H3C (a joint venture of Huawei and 3 Com) was born, analysts were quite optimistic toward the future of H3C.  Huawei provided patent, employees and products, while 3Com provided fund and successful experience to H3C, made H3C an mature firm at the beginning. Huawei and 3Com offered a large number of IP licensing to H3C,especially Huawei invest its main enterprise-class network technology.

All above were good news for H3C to get rid of the cumbersome "establish" process that every startup company would face. Therefore, no wonder H3C claimed at the beginning that it had established IPD (Integrated Product Development) framework for the process PDT (Product Development) system, and had got complete independent intellectual property rights. The success of H3C is not accidental.

However, even if that is the case, for a firm less than four years such as H3C still need great efforts to working hard. For an IP-based firm which focuses on the enterprise-class market, H3C faces so many competitors. Although H3C entered domestic market successfully, H3C was far behind the top sales of $20 billion.

Lots of work to do

Technically, IP network technology is relatively simple, especially in the areas of storage, IP storage technology threshold is not high. More profits comes from the enterprise's storage environment integration services, that means vendor should be a total solution provider. Wu Jingchuan, President of H3C global sales and marketing said that H3C had already seen the "services" direction, and the next step for H3C is becoming to be a whole solution provider based on the business needs include networking, security, storage and multimedia services. And to become a solutions provider, it's quite necessary to cooperate with channel partners who have the ability to implement projects is necessary, get more projects and accumulate experience in the implementation of the programs.

Huawei and 3Com both got lots of channel resources, but most of them focused on networking area. H3C has 128 professional channel partners at present, only 17 of them are of storage area, while multimedia 42, security 69.

The imbalance in its channel structure is a big challenge for H3C. It's not realistic to count on the existing networking channels mainly to sell storage products in the long term, since the future of H3C's storage products, security products and multimedia services will be greatly restricted. Therefore, in order to expand its market coverage rapidly and enhance the penetration depth of professional market, H3C must recruit professional agents, as well as to train the existing network channel partners as soon as possible.  

Channel strategy

As mentioned to channel strategy, H3C is exploring its own model. According to H3C, its channels strategy is "win-win cooperation and to encourage value-added approach" at present. H3C encourage their channel partners to enhance their own R&D and technology strength, and to pay more attention to value-added products and services. H3C provided an open platform based on IP technology to the channel partners. And H3C will support them to develop value-added products on the basis of the platform which available for every channel partner.

But we are still concern on a few issues, for example "If H3C produce a lot of 'basic' products to the channel to add value,  will these channels competitive seriously?" H3C noticed that, they had individualized channel strategy toward the 3 main product lines---- security, storage and multimedia . Besides that each channel will have its own dedicated market according to region, industry, the extent of the professional division. Therefore competition between them could be avoided generally.

What's worth mentioning is that, this strategy will not only train a large number of professional channels for H3C, but will also let them devote more energy to H3C's products. No doubt this will make their relationship closer. As H3C's channel partners strengthen their technology background,  H3C will have many mini "R&D Center". As a result H3C's products will be more diversiform and highly targeted which will make up their disadvantages in channel quickly and substantially.