HP ProCurve Plans 3Com-Driven Assault On Cisco
The gloves are off: HP is combining its networking acquisition 3Com with its existing Procurve division, in a bid to build a credible Cisco alternative
Technology giant Hewlett-Packard explained yesterday how it will use its new acquisition, networking company 3Com, to challenge Cisco in enterprise networking. It’s all down to open standards and will also rely on 3Com’s presence in China, apparently.
To beat Cisco, HP will need several things, according to HP vice president David Donatelli, who runs HP’s Enterprise Servers, Storage and Networking business unit. On a conference call he listed five ways HP will transform the networking industry, naming superior technology, open standards architecture, an end-to-end product portfolio, converged infrastructure and a lower total cost of ownership.
“The industry is at an inflection point, working with a fragile networking infrastructure,” said Marius Haas, who leads the HP Networking division. “Networks are hard to manage, vulnerable to attacks and expensive to maintain. This ends today.”
3Com’s strength in the Chinese market gives HP a good base to challenge Cisco as the world’s largest provider of networking technology,:said Haas. Before its purchase by HP, 3Com had bought out a joint venture with Huaewei and thereby become a technology leader in China under the H3C brand. Now, by buyiing 3Com/H3C, HP has inherited the number one position in enterprise networking in China, with a 49 percent market share and a presence in 300 of the top 500 enterprises in China.
While HP will absorb 3Com’s brand, it will keep 3Com’s H3C brand name in the Chinese market. “We’re providing customers a choice in the market place that’s been lacking. Particularly in China, in competition with Cisco, 3Com has won,” he said. “What the company lacked was global distribution and services, as well as a global brand. HP brings that to the table.”
HP + 3Com = 20 percent of the market
HP’s $2.7 billion (£1.76bn) acquisition of 3Com, which was approved by EC regulators in February, although earlier there had been allegations of insider trading. will enable HP to fill some holes in its ProCurve product portfolio as it continues to challenge Cisco Systems in the $40 billion (£26bn) networking space. According to some analysts, Cisco owns about 52 percent of the networking market, while HP and 3Com have been a distant second and third, followed by a host of other vendors. Combined, HP and 3Com will have about 20 percent of the market.
HP formerly used Cisco as a partner for the networking component in some deals, but this agreement has ended, as Cisco has stepped into the server space with its Unified Computing System (UCS), announced last year, which includes blades that were recently upgraded to Intel Xeon 7500s.
Despite the split with Cisco, HP partners and value added resellers (VARs) that sell Cisco products will not be pressured to end their relationship with Cisco, said Donatelli. “We understand that it’s a heterogeneous world out there, so we offer our VARs that opportunity,” he said. “We feel like we should offer customers a better solution, but there won’t be any pressure exerted on them [to not sell Cisco products].”
Networks can become cheaper thanks to open standards which reduces total cost of ownership (TCO), increase manageability and accelerate the transition to broader open network architecture, the two said. “With HP’s there’s not a ‘rip-and replace’ mentality but a modular approach,” Haas said. “HP will simplify how networks are built and managed. We will continue to focus on open standards solutions.”
But Cisco’s converged strategy has been criticised for reducing opennesss; could the same now be said about HP, the pair were asked. HP is now the only company that creates its own networking and server, storage and facilities management products, Donatelli replied, saying that the company’s converged infrastructure is easy to make changes in, so customers aren’t locked into one system.
“We’ve always developed these to open standards to get the most out of integration,” Donatelli said. “We now have everything we need to win in the marketplace.”
Updated: Although this story refers to “HP Procurve”, the network division of HP is now renamed “HP Networking”.
