Huawei eyes cloud buys, but politics keep it away from U.S. startups

Huawei is planning to boost its cloud computing offerings on the software side through acquisitions, but thanks to the uncertain politics related to the Chinese government, U.S. startups may not be in the running. The Chinese telecom gear maker has had its eye on the data center market for some time, and cloud computing is a hot opportunity in China (sub req’d) where the client-server computing paradigm didn’t have much chance to become entrenched.

Reuters reports (s TRI) that Li Sanqi, CTO of Huawei’s IT hardware product line, said:

“I feel that we will have acquisitions in the cloud and ICT (information and communications technology) arenas. We are searching, but we’ll be careful in the United States for political reasons.”

His caution is well founded, as the U.S. has taken steps recently to prevent Huawei from selling gear that could be used in public safety equipment, and in February blocked it from acquiring the assets of a networking hardware startup called 3Leaf systems. The government prevented the deal at the recommendation of The Committee on Foreign Investment in the United States (CFIUS), which exists to prevent sensitive technology from being acquired by foreign companies. The U.S. government has long been suspicious of Huawei’s ties to the Chinese government.

Huawei has repeatedly denied or downplayed those ties. However, fears of China’s hacking skills and technological advancements remain a large concern in the United States. For this reason, Huawei says it will look for startup companies in Canada, China and Israel, which means the myriad U.S. cloud software startups will have to find buyers a little closer to home.