Cisco and INSPUR set up a joint venture company

During the time when the Chairman Xi Jinping visited the United States, Cisco and INSPUR jointly announced the establishment of China joint venture. The cooperation included in the Chinese market to resell Cisco's network equipment and jointly develop hardware and so on. This partnership will enable Cisco and INSPUR expand business coverage, and have a significant impact on the pattern of Chinese IT infrastructure market.

Since the 1990s, China has benefited from substantial investment in the network market, Cisco's business in China continued to maintain rapid growth. However, after 2013 the situation was reversed Snowden event, Cisco performance worsened in China, and continues to decline today. IDC data show that the first half of 2015 sales of Cisco's network equipment in China was only 81.3 percent in the first half of 2013, market share fell from 28.5% to 19.4%; At the same time, China's overall Internet market grew by 19.5%, Huawei, Rui Jie, ZTE and other domestic manufacturers market share increased from 27.2% to 46.3%. Chinese networking equipment market accounted for 10% of the world, there is still much room for development the United States and Europe. In recent years, China's Internet market has entered a stable period of development, but the growth rate is still far higher than the global level, especially in the data center, for any one of the international companies in terms of Chinese market can not be ignored.

China markets size of enterprise network equipment, 2013H1-2015H1

One as a mainstream server vendors, INSPUR also looking for a new growth point. Because there is no network product line, formerly INSPUR in competition with Huawei, HP and other vendors can not help but binding the hands. Collaboration with Cisco will help INSPUR improve their infrastructure product line. Cisco's networking products in conjunction with INSPUR own server, storage, cloud computing and other product lines, to provide users with more convenient INSPUR overall package solution. For INSPUR, the Cisco networking products is the best choice of partners, Cisco's leading technology products, but because of policy restrictions can not display their fists. INSPUR good government through their own relationships to help sell Cisco products, while INSPUR can learn from technology and experience to develop their own products.

China market size of X86 server, 2015H1

After the collaboration, Cisco and INSPUR will benefit. Cisco aid INSPUR can re-enter the market-related part of the government, is expected to return to the growth track, INSPUR may be in the server project sales of network equipment, add new sources of revenue. Early industry is expected the cooperation will focus on government and finance, Cisco in these two sectors, the affected self-control policy, business serious decline. In these two sectors in the two sides will focus on the data center market, so INSPUR can use their own existing client resources quickly into the market, in the data center network investments accounted for most of the switch, so that the data center switch will be the focus of bilateral cooperation products.

Cisco phasing out of these two years, Huawei, ZTE and Rui Jie, quick to seize its market share in the government and financial sectors, and now Cisco borrow INSPUR comeback, bound to give these companies create new pressures. H3C due to changes in ownership, etc., the first half of 2015, a drop in performance, this time in terms of Cisco's access to H3C will be worse. Network market contest resumed, arrived in the hands of the domestic manufacturers can keep market share, will begin to be more comprehensive test of the strength of the manufacturers. Competition will become more intense, thus further driving down prices, users can buy more cost-effective products, from this perspective, users will benefit from it.

Of course, before the joint venture has many problems, such as how the price setting, whether it will affect the existing channels, the depth of integration and other solutions can, how to solve these problems will test the sincerity and intelligence cooperation.

"China's Internet market, after nearly three decades of development, has been to the eve of change", IDC research manager Hu Xiangdong of China's Internet market, "said the transition to the third stage from the second stage, ICT depth of integration, SDN technology development period, network competition big change to take place, only close grasp of user needs, the introduction of competitive products and solutions, in order to have a foothold in the market. "

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