Cisco, HP Clash over Networking Equipment Pricing - Page 2

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.