New H3C's History

In March 2003, the infringement dispute between Huawei and Cisco entered the most critical juncture.

At the time, Cisco filed a full-scale lawsuit against Huawei in the U.S. federal court for the Eastern District of Texas. The entire lawsuit is 77 pages long, accusing Huawei of 21 counts of patent infringement, unfair competition, and theft of trade secrets.

In the face of Cisco's aggressive offensive, Huawei resolutely responded. They argue that they have not committed any infringement and that all Huawei product designs are original intellectual property rights.

The two sides are at a stalemate, and the lawsuit is deadlocked. At a critical moment, 3Com CEO Bruce Claflin appeared in court to testify for Huawei. He said that Huawei has no problems with intellectual property rights in data communication products.

Bruce Claflin

3Com is an American company, and the reason why it wants to help Huawei is mainly to block Cisco.

At that time, 3Com not only testified for Huawei, but also established a joint venture with Huawei. The name of this company is called Huawei 3Com Technology Co., Ltd.

Company LOGO

Huawei 3Com was formally established in November 2003 (the joint venture intention was reached in March 2003), registered in Hong Kong and headquartered in Hangzhou. At the beginning of its establishment, it had 1,500 employees.

Most of these 1,500 people came directly from Huawei. Huawei has invested in technology and personnel and holds 51% of the company's shares. And 3Com invested 165 million US dollars, accounting for the remaining 49% of the shares. Among the board seats, 5 are from Huawei and 4 are from 3Com. Bruce Claflin and Huawei boss Ren Zhengfei serve as the company's chairman and CEO, respectively.?

The support from 3Com has indeed brought great help to Huawei. Finally, on July 28, 2004, Huawei, Cisco, and 3COM submitted an application to the court to terminate the lawsuit. The court issued a decree ending the entire lawsuit.

After the lawsuit, Huawei 3Com continued to operate.

This company focuses on the data communication equipment market for government and enterprise users, mainly producing low-end routers and other equipment.?

With its relationships with Huawei, 3Com, and NEC (Japan Electric Co., Ltd.), it thrives in domestic and foreign markets.

At that time, the switches and routers sold by Huawei 3Com in China were affixed with the Huawei brand, the 3Com brand in the European and American markets, and the NEC brand in the Japanese market. The mid-to-low-end switches and routers with the Huawei brand in the market are actually produced by Huawei 3Com.

In 2005, Huawei transferred 2% of Huawei's 3Com shares to 3Com, making 3Com hold 51% and become a major shareholder. A year later, Huawei sold the remaining 49% stake to 3Com for $882 million. So far, Huawei 3Com has become a wholly-owned subsidiary of 3Com and has nothing to do with Huawei.

In February 2007, Huawei 3Com officially changed its name to H3C (Hangzhou H3C Communication Technology Co., Ltd.).

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There are two reasons why Huawei wants to sell Huawei 3Com. First, Huawei hopes to divest its low-end enterprise network business and focus on the telecom network market. Second, at that time, Huawei made a series of missteps in the PHS and CDMA markets, and was madly chased by its opponents. In the face of the upcoming 3G and the expansion of the international market, Huawei is very short of money. So, we sold Huawei 3Com. In fact, the cash obtained from the sale of Huawei 3Com did help Huawei through the difficulties at that time.

It is worth mentioning that when Huawei sold all its shares, it also handed over all its enterprise network business to the new H3C, and signed an 18-month gentleman's agreement: the enterprise network business site belongs to you, H3C, and I. Huawei only focuses on the operator market.

After 3Com wholly owned H3C, its operating performance did not improve and continued to decline. As a last resort, 3Com reconsidered the sale of H3C.

As for Huawei, because of changes in the external situation, they want to buy back the H3C that they founded. As a result, the two sides negotiated repurchase matters.

In addition to H3C, Huawei even wanted to directly buy the entire parent company of 3Com (H3C accounted for more than half of 3Com's performance at that time, in fact, it didn't cost a lot of money). They teamed up with Bain Capital to make an offer to buy 3Com for $2.2 billion.

As a result, the U.S. government blocked the acquisition on the grounds of national security. In desperation, Huawei and Bain Capital withdrew their acquisition applications.

In 2010, 3Com couldn't make it any longer and sold itself to Hewlett-Packard for $2.7 billion. As a result, H3C has become a subsidiary of Hewlett-Packard.

In 2013, when the "Snowden Incident" broke out, China strengthened the independent and controllable requirements for key areas of information technology, and reduced the purchase and use of high-tech equipment with foreign backgrounds. H3C with wholly foreign-owned status has greatly affected its performance and its market share has dropped sharply.

In 2014, HP split into Hewlett Packard Enterprise (HP Inc.) and Hewlett Packard Enterprise (HP Enterprise). Hewlett Packard Enterprise is in the business of personal computers and printers, and Hewlett Packard Enterprise is in the business of servers and data storage devices, software and service software for businesses. Among them, H3C belongs to Hewlett Packard Enterprise (HPE).

The successive changes of ownership have brought subtle changes to the emotions of H3C's internal employees. In early 2015, there was a serious strike within H3C.

The trigger for the outbreak of the turmoil stemmed from HP China's personnel adjustment to the management of H3C.

At that time, according to HP China's appointment plan, Mao Yunan, chairman of HP China, will also serve as chairman of H3C, and former chairman Matt Greenly will serve as vice chairman.

Mao Yunan (his father is very famous, called Mao Renfeng)

The move was unanimously opposed by all H3C employees and management.

The reason why H3C employees spontaneously boycotted Mao Yunan was because they were worried that Mao Yunan would use the means of capital operation to sell H3C again regardless of the interests of employees and the company's development. Many of H3C's old employees have experienced the process of changing owners many times before, and they really don't want H3C to be "sold" again.

At that time, H3C had more than 5,000 employees, applied for more than 5,000 patents (nearly 90% were invention patents), and had annual sales of over 10 billion yuan.

Many H3C employees are from Huawei, and they hope to be able to achieve full shareholding like Huawei. They also hope that H3C can go public independently, so as to protect their own interests.?

In order to express their demands, nearly 1,000 H3C employees held on-site collective protests at the Hangzhou headquarters and H3C Beijing R&D base. The protest site was covered with banners: "Hold a staff meeting and require all employees to hold shares", "Maintain national information security", "Unite all forces that can be united", "Resolutely support the collective fruits of H3C and defend H3C"...

Employees protesting collectively (pictures from the Internet)

However, despite the indignation and strong opinions of H3C employees, they still cannot control the situation. HP China has a 100% controlling stake in H3C, which is enough to make decisions about the company's development.

A few months later, in May 2015, HP China selected Tsinghua Unigroup for a joint venture among more than a dozen potential partners. The two parties reached an agreement that Tsinghua Unigroup, a subsidiary of Tsinghua Unigroup, would acquire a 51% stake in H3C and become the company's controlling shareholder.

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In addition to H3C, HP also established Ziguang Huashan as a joint venture with Tshing hua unigroup.

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Ziguang Huashan mainly focuses on servers, storage and technical services, while Hangzhou H3C is responsible for network, wireless, security and other products. Together, the two companies form the New H3C Group.

Tsinghua Unigroup Co., Ltd. belongs to Tsinghua Unigroup, which in turn belongs to Tsinghua Holdings. They not only brought the background of state-owned enterprises to H3C, but also brought the background of colleges and universities, paving the way for H3C's market expansion.

Since then, H3C's development has stabilized, and there has been no change in ownership.

Overall, the development status of H3C is still very stable

At present, H3C Group is no longer a pure data communication equipment manufacturer. Its products cover cloud computing, big data, data center network, wide area network, campus network, server, storage, commercial PC, security solution, unified operation and maintenance, Intelligent terminals and many other fields.

In terms of service objects, H3C has already entered the operator market, serving customers in various fields such as operators, government, finance, electricity, energy, medical care, education, and transportation.?

New H3C Group Building in Hangzhou High-tech Zone

It is worth mentioning that, because H3C has two headquarters, the administrative and marketing headquarters are in Beijing, and the technical and operational headquarters are in Hangzhou. They have rich experience in the toB market, so they have been poached by competitors such as Alibaba Cloud in the same city in recent years, especially those with channel resources.

The employees of H3C are generally very confident in the company's capabilities, but they are entangled in the ownership of the company. After all, there is a parent company on it. Although I make money, a lot of money is used by the parent company to subsidize the brother company, so it is more uncomfortable.

Well, the above is the introduction of Xinhua Three. Under the current macro situation where digital transformation is prevalent, H3C, relying on its resources in the industry for many years, believes that it will usher in a wave of good development. Let's wish them the best of luck!

Thanks! goodbye!

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