HP, Cisco competition heats up

Competition is escalating between HP and Cisco, as HP says it's aggressively going after a larger chunk of the networking market, and will give Cisco some serious competition on margins.

This is according to Jay Mellman, HP networking marketing director, who says HP recently got one over the networking market leader with the release of its first “Cisco-free data centre” product, escalating a battle that has been coming since the companies started competing in each other's spaces.

“Changes in the networking market are on the horizon, particularly following HP's acquisition of 3Com,” Mellman says. The names ProCurve and 3Com, however, will disappear; we will go to market as HP Networking. Only the H3C brand will be used for the foreseeable future in China.”

HP strives to be number one or two in every space in which it operates, says Mellman, and networking is no different. “We've done a great job of selling at the edge, and we have strong medium market products. We needed an enterprise offering. Globally, the 3Com acquisition will bring HP's market share to around 20%, although the revenue is where we'll have a big impact.”

He says up till now, Cisco has had no real competition - in core, routing, unified communications, the company has enjoyed an open market. “I think HP will radically change this over the next few years, and the industry will be surprised at how quickly it will happen.”

Mellman says the next 12 months will see a steady release of products that show HP understands what is behind Cisco's success.

According to him, the networking business is bigger than the server or the storage business, and there is a real opportunity for growth. “Look at the margins in networking versus servers or storage. The margins are high, 60% to 70%. We're used to margins around 20% and 30%. If we look at delivering margins of 50%, everyone will be happy.”

He says there are no plans to end the life of any 3Com products, but would not disclose whether the acquisition would mean retrenchments for staff. “The full integration of 3Com staff and products into HP isn't going to happen immediately, though,” Mellman said.

The HP Networking portfolio combines HP ProCurve LAN edge products with 3Com's routing, security, data centre and enterprise campus core switching solutions to deliver efficient and secure business services.

The new portfolio consists of several product families that each addresses specific client requirements.

HP says the “A” Series is designed for enterprise clients with large and complex deployments, who want increased system performance with wire-speed throughput, and reduced power consumption with many products incorporating a front-to-back cooling design. This series will feature simplified management with a resilient virtual switching fabric and common operating system across the enterprise. It provides full-featured networking technology, through several options.

The “E” Series is for medium clients seeking affordable, easy-to-use technology, with reduced complexities and a unified fabric across wired local area networks and wireless local area networks. “This series also offers reduced risk through built-in security and embedded instrumentation, and ensured investment protection with up to a 65% reduction in total cost of ownership and lifetime warranty.

The “V” Series, says HP, is aimed at small to medium enterprises, and allows these smaller players to facilitate growth with open, standards-based scalable solutions. The products also improve ease of use with a straightforward graphical Web management interface that makes the solution user-friendly.

The “S” Series is aimed at clients needing increased network security, as it offers protection with vulnerability discovery capabilities using TippingPoint, a process that fixes software defects that affect the security of a network.