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Answer
Some recent conversations with network managers reveal why HP is beginning to gain some traction in the network switching space. The following comments reflected the group's sentiments:
- "The free maintenance was an eye opener. I figure the network equipment paid for itself in two years just in the money I saved in not having to buy Cisco maintenance contracts."
- "Since it's HP, I'm not worried about vendor viability. I figure they'll always be around."
- "When there was a problem, they flew people in and fixed it right away. No complaints."
While HP has gained significant market share in worldwide Ethernet ports during the past year and seems poised to replace 3Com as the No. 2 vendor behind Cisco, it has not attracted a lot of press. That's bound to change as the market dynamics begin to be noticed by industry watchers. While it has traditionally done very well with mid–sized businesses, HP's challenge is to penetrate the very largest companies' enterprise networks. That likely will require fine tuning its channels and adding some partners. It also needs some partnerships to cover areas it doesn't cover such as virtual private networks (VPNs) and wide area network (WAN) switches. Cisco need not start quaking in its boots yet, but there are some early indications that the two companies will begin running into each other in major accounts within the next 12 months for several reasons:
- Giga large enterprise clients are looking for a legitimate alternative to Cisco if for no other reason than additional bargaining power. HP's prices are extremely competitive and vendor viability is not an issue. Its free maintenance offer is really resonating with network managers who still have serious budget constraints.
- HP has the resources to tightly integrate mobility as well as convergence into its ProCurve network architecture. That's an appealing prospect to companies that have identified these two areas as business critical. Its simplicity argument resonates because so many IT departments are understaffed.
- A strong security story seems to be the right message at the right time.
- An open standards approach offers an alternative to IOS.
- Tight integration of security and management functions between the wireless and the wired network product lines.
While 3Com already is feeling competitive pressure from HP in its mid–sized business market, Extreme Networks is likely to be the next vendor to suffer. Because HP offers 10 Gigabit switches as well as Gigabit and Layer 3 wire speed switches, much of Extreme's competitive differentiation is lost. Increasingly Extreme's talk about its chip sets and architecture will simply glaze over network managers who are looking at business solutions. Its network management functionality pales in comparison to HP's promise of tight integration between the ProCurve switches and OpenView. So, Extreme's one differentiator remains its Alpine WAN switches since HP's focus is entirely on the campus network.What is intriguing about HP's rise in the networking space is that it has been so quiet that many Giga clients have not heard enough about the ProCurve product line to include it on their short lists and yet sales have boomed. That suggests that once the word is out, there could be enough of a sales surge so that even Cisco takes notice.Giga clients that are looking at upgrading their network infrastructure should give Hewlett Packard's ProCurve switches a look. Increasingly HP is likely to make the short list.© 2003 Giga Research, a wholly owned subsidiary of Forrester Research, Inc
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