HP ProCurve Seeks Networking Revolution, Eyes Cisco

HP aims to challenge Cisco's dominance of the enterprise networking market with the acquisition of 3Com. During a conference call, HP executives pointed to the company's strong presence in the fast-growing Chinese market, as well as HP's dedication to open architecture.

Technology giant Hewlett-Packard drew attention to the company's commitment to open standards and the importance of newly acquired network infrastructure specialist 3Com's presence in China during a conference call detailing HP's plans for a comprehensive networking portfolio.

David Donatelli, executive vice president and general manager of HP's Enterprise Servers, Storage and Networking business unit, opened the call with a list of five reasons HP would 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.

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Marius Haas, who will lead the HP Networking division as its senior vice president and general manager, repeatedly pointed to 3Com's presence in the Chinese market as evidence that HP was serious about challenging Cisco as the world's largest provider of networking technology. "The industry is at an inflection point, working with a fragile networking infrastructure," he said. "Networks are hard to manage, vulnerable to attacks and expensive to maintain. This ends today."

Quick facts: The HP, 3Com Deal

Haas also pointed out HP's product deployment in 300 of the top 500 enterprises in China, noting HP is the No. 1 provider in that enterprising networking market with 49 percent market share. Donatelli confirmed that while HP will absorb 3Com's brand, it would 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's $2.7 billion acquisition of 3Com will enable HP to fill some holes in its ProCurve product portfolio as it continues to challenge Cisco Systems in the $40 billion networking space. According to some analysts, Cisco owned about 52 percent of the networking market, while HP and 3Com were a distant second and third, followed by a host of other vendors. Combined, HP and 3Com will have about 20 percent of the market.

Donatelli also sought to reassure HP partners and value added resellers (VARs) that sell HP and Cisco products they would not be pressured to end their relationship with Cisco. "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]."
Haas and Donatelli also spent time extolling the virtues of an open standards architecture, which they said reduces TCO, increases manageability and accelerates the transition to broader open network architecture. "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."
When asked if converged data center hardware and openness were contradictory, Donatelli said as the only company that creates its own networking and server, storage and facilities management products, the company's converged infrastructure is very easy to make a change in, so customers aren't locked into one system. "We've always developed these to open standards to get the most out of integration," he said. "We now have everything we need to win in the marketplace."