Close
  • Latest News
  • Artificial Intelligence
  • Video
  • Big Data and Analytics
  • Cloud
  • Networking
  • Cybersecurity
  • Applications
  • IT Management
  • Storage
  • Sponsored
  • Mobile
  • Small Business
  • Development
  • Database
  • Servers
  • Android
  • Apple
  • Innovation
  • Blogs
  • PC Hardware
  • Reviews
  • Search Engines
  • Virtualization
Read Down
Sign in
Close
Welcome!Log into your account
Forgot your password?
Read Down
Password recovery
Recover your password
Close
Search
Logo
Subscribe
Logo
  • Latest News
  • Artificial Intelligence
  • Video
  • Big Data and Analytics
  • Cloud
  • Networking
  • Cybersecurity
  • Applications
  • IT Management
  • Storage
  • Sponsored
  • Mobile
  • Small Business
  • Development
  • Database
  • Servers
  • Android
  • Apple
  • Innovation
  • Blogs
  • PC Hardware
  • Reviews
  • Search Engines
  • Virtualization
More
    Subscribe
    Home Cloud
    • Cloud
    • Networking

    Cisco, HP Clash over Networking Equipment Pricing

    Written by

    Jeff Burt
    Published July 13, 2009
    Share
    Facebook
    Twitter
    Linkedin

      eWEEK content and product recommendations are editorially independent. We may make money when you click on links to our partners. Learn More.

      The friction between Hewlett-Packard and Cisco Systems is continuing, this time in the area of networking equipment.

      Specifically, the issue is the pricing of the networking equipment. HP officials are pointing to comments some Cisco officials made during the company’s Partner Summit in June as an indication that Cisco is instituting a program urging partners to meet HP ProCurve prices.

      Cisco officials are arguing that while they were vehement in the “refuse to lose” message they sent to attendees of the Partner Summit, they said that Cisco wasn’t ready to get into any kind of price war with HP’s ProCurve networking business.

      “We talked about the need to work more effectively with our partners to ensure that we bring together all of the various elements that Cisco can bring to the table to win deals and solve customer problems,” Wendy Bahr, senior vice president of U.S. and Canada channels for Cisco, said in a blog post that never mentions HP by name but talks about recent news reports around the issue. “We told our partners that together we should -refuse to lose,’ but let me be clear: This does not mean that we will change our winning formula. We will be sensitive to price, but we will compete through value.”

      Cisco and HP always have had a relationship of both competition and cooperation, but that has been heightened in recent months, most notably with Cisco’s introduction in March of its UCS (Unified Computing System), which marked Cisco’s foray into the data center hardware business. Cisco’s move reportedly strained relations with such vendors as HP and IBM, which combined spend billions of dollars a year on Cisco networking equipment.

      Soon after, HP released its own all-in-one data center offering, called the BladeSystem Matrix, which like UCS combines server, storage, networking and management software in a single package. HP in June also took another swing at Cisco with its partnership with telecommunications equipment maker Alcatel-Lucent, a move that analysts said gives HP more ammunition in the areas of data centers and cloud computing.

      In her blog, Bahr said Cisco’s continued focus in dealing with partners and end users will be on value rather than price.

      HP had a different take on the message. Karl Soderlund, vice president and general manager of sales and marketing for the Americas for HP ProCurve, said in an interview that Cisco is putting in place a program for partners to match HP ProCurve prices, and that it’s an indication that HP ProCurve is making a dent in Cisco’s market share.

      “This is very much a positive,” Soderlund said, adding that he expects it will encourage Cisco customers to take a look at HP ProCurve products. “We wish all Cisco customers out there know about it.”

      Soderlund’s take was backed up by some reports in which Cisco resellers say a price-match program by Cisco is in the works. However, other partners said they haven’t heard about such an initiative.

      Either way, Dave Passmore, an analyst with the Burton Group, said he can understand why Cisco might be turning more of its attention to HP ProCurve, given that its rival is now No. 2 behind Cisco in the network market and is gaining ground.

      SMBs Key Area of Competition

      They key area of competition between the two vendors is among small and midsize businesses, which is the primary focus of HP ProCurve and an area where Cisco also sells into, Passmore said. HP ProCurve relies primarily on an indirect sales channel, while Cisco also sells directly to enterprises with its Nexus line of networking gear.

      “They’ve not aggressively [courted] the enterprise space,” he said of HP ProCurve, noting that to do so, HP would have to invest significant dollars to build up a sales force.

      However, Passmore said that HP ProCurve officials have been working more closely with their counterparts in the HP server business, particularly in the industry-standard ProLiant unit, which would help give HP ProCurve an avenue into the enterprise.

      Soderlund also said that HP ProCurve is looking to expand into the enterprise. HP ProCurve has a traditionally strong presence at the edge of the network, but HP is looking to move closer to the enterprise.

      “We’re growing and evolving rapidly,” he said.

      For example, last year HP bought Colubris Networks, which brought enterprise-level wireless networking capabilities to HP ProCurve.

      Soderlund also said the economy is working in HP’s favor.

      “There is tremendous opportunity for ProCurve,” he said. “Customers with limited IT spend are forced to look at alternatives. Cisco is no longer the de facto choice.”

      In her blog post, Bahr said Cisco’s partner strategy since 2001 has been focused more on the value of the solution to user rather than price. She also said that will continue to be the case during the down economy.

      “We recognize that in this challenging economic environment it’s more important than ever that we help our customers realize the value from their IT investment,” Bahr wrote. “And at Cisco Partner Summit, we candidly discussed our passion to work with our partners to meet the challenge of competition from price- and volume-driven vendors.”

      However, HP is looking to keep a focus on price. Earlier this year, HP ProCurve introduced a program that rewarded users with a 20 percent discount on HP equipment if they traded in Cisco gear, and 10 percent if they upgraded their networking using HP ProCurve technology.

      Jeff Burt
      Jeff Burt
      Jeffrey Burt has been with eWEEK since 2000, covering an array of areas that includes servers, networking, PCs, processors, converged infrastructure, unified communications and the Internet of things.

      Get the Free Newsletter!

      Subscribe to Daily Tech Insider for top news, trends & analysis

      Get the Free Newsletter!

      Subscribe to Daily Tech Insider for top news, trends & analysis

      MOST POPULAR ARTICLES

      Artificial Intelligence

      9 Best AI 3D Generators You Need...

      Sam Rinko - June 25, 2024 0
      AI 3D Generators are powerful tools for many different industries. Discover the best AI 3D Generators, and learn which is best for your specific use case.
      Read more
      Cloud

      RingCentral Expands Its Collaboration Platform

      Zeus Kerravala - November 22, 2023 0
      RingCentral adds AI-enabled contact center and hybrid event products to its suite of collaboration services.
      Read more
      Artificial Intelligence

      8 Best AI Data Analytics Software &...

      Aminu Abdullahi - January 18, 2024 0
      Learn the top AI data analytics software to use. Compare AI data analytics solutions & features to make the best choice for your business.
      Read more
      Latest News

      Zeus Kerravala on Networking: Multicloud, 5G, and...

      James Maguire - December 16, 2022 0
      I spoke with Zeus Kerravala, industry analyst at ZK Research, about the rapid changes in enterprise networking, as tech advances and digital transformation prompt...
      Read more
      Video

      Datadog President Amit Agarwal on Trends in...

      James Maguire - November 11, 2022 0
      I spoke with Amit Agarwal, President of Datadog, about infrastructure observability, from current trends to key challenges to the future of this rapidly growing...
      Read more
      Logo

      eWeek has the latest technology news and analysis, buying guides, and product reviews for IT professionals and technology buyers. The site’s focus is on innovative solutions and covering in-depth technical content. eWeek stays on the cutting edge of technology news and IT trends through interviews and expert analysis. Gain insight from top innovators and thought leaders in the fields of IT, business, enterprise software, startups, and more.

      Facebook
      Linkedin
      RSS
      Twitter
      Youtube

      Advertisers

      Advertise with TechnologyAdvice on eWeek and our other IT-focused platforms.

      Advertise with Us

      Menu

      • About eWeek
      • Subscribe to our Newsletter
      • Latest News

      Our Brands

      • Privacy Policy
      • Terms
      • About
      • Contact
      • Advertise
      • Sitemap
      • California – Do Not Sell My Information

      Property of TechnologyAdvice.
      © 2024 TechnologyAdvice. All Rights Reserved

      Advertiser Disclosure: Some of the products that appear on this site are from companies from which TechnologyAdvice receives compensation. This compensation may impact how and where products appear on this site including, for example, the order in which they appear. TechnologyAdvice does not include all companies or all types of products available in the marketplace.