Friday, September 17, 2010

The Ascendency of Hewlett Packard?

On Thursday I sat through several hours of Hewlett Packard presentations as part of the Net Tech Field Day program. Is there finally a viable competitor to Cisco across multiple product lines?

(Disclaimer – Hewlett Packard is one of the sponsoring organizations of this event. There is no obligations for me to write anything about HP, or the other participants in this event. So while these musings came out of a sponsored trip, they are assuredly my own thoughts)

Through its recent acquisition of 3Com, Hewlett Packard has acquired some fairly impressive networking technology. The A-Series switch line stacks up well to Cisco’s Nexus product line. If you read the following marketing description, can you determine if this is a description of the Nexus 7K platform or of the HP A-12500? I don’t think I could:

Next-generation, large core/data center switching platforms with innovative Intelligent Resilient Framework (IRF) technology. 18- and 6-slot switches with up to 6.6 Tbps performance and up to 128 (1:1) or 512 (4:1) 10GbE ports, and 864 GbE ports. Non-blocking, zero service interruption design, and architecture support for 40 GbE and 100 GbE. Wire speed L2/IPv4/IPv6/MPLS.

Except for the mentioning of IRF and the slot count, it sounds like the Nexus 7K to me. (Reference http://h10144.www1.hp.com/products/switches/index.aspx#A12500).

Unfortunately HP didn’t provide any tangible information about how this switch looks and feels in a predominantly Cisco network. The Tech Field Day participants pleaded for some white papers and/or deployment guides, but none are available at this time. In a somewhat ominous sign, the A-Series presenter mentioned that a design guide had been written, but HP has not yet determined if it would be treated as proprietary information for HP’s services organization.

Takeaways

I have two main takeaways from the HP portion of Tech Field Day:

1) Cisco may have a viable competitor across their networking product line.

If the industry rejects new Cisco-proprietary protocols in the Data Center (L2MP, VNTag), HP and other DC switching vendors (Arista, Force10, Juniper) will be able to compete directly on “speeds and feeds.” This would not be good for Cisco. Once a company goes multi-vendor, Cisco will lose its pricing power across the majority of its product lines. This is a good thing for the industry. Buying 3Com makes that equipment line a viable solution for businesses. I did not have enough faith in 3Com as a standalone company to recommend their gear for my network. (As an aside, I do not have faith in Foundry, even after being acquired by Brocade)

What also must be said is that HP is taking a huge risk here. My organization is building a greenfield data center soon. Historically we’ve gone with HP for the majority of our compute power (C-class blade chassis) and Cisco for most of the network components. If HP wants an opportunity to bid for the network side of this project, we’ll also need to open the compute side up to Cisco. All’s fair, right? The issue with this is that the network opportunity is approximately one-third the size of the compute opportunity. HP is effectively risking X for a shot at X * 1.33, while Cisco is risking Y for a shot at 4 * Y.

2) HP’s large services organization could significantly hinder their ability to gain traction in the marketplace.

There are basically two types of resellers in the network marketplace. There are those that compete on price and attempt to shave a few percentage points of margin off every sale, and there are those who make their margins based on consulting or management services that are sold along with networking equipment. My organization generally prefers the former, as we are comfortable with our ability deploy complex networking solutions. Price is usually our deciding factor for equipment purchases, although we have made exceptions for new technology, such as WAN acceleration and Cisco’s ACNS video platform. The problem with utilizing the cheapest provider is that the purchaser and networking equipment vendor has to take responsibility for the network architecture, product selection and installation.

For organizations that have less network know-how, purchasing from resellers that can deliver the installation and management services required is a more attractive option. They can provide network designs and product selection advice. If the reseller has agreements with multiple equipment vendors, they can help determine which vendors' equipment best fits the customer’s needs. As a network engineer, these are the resellers I want to see in the marketplace, because they offer interesting jobs.

So what does this have to do with HP? As mentioned above, HP isn’t sure whether their deployment guides will be released to the general public, or for that matter, even to their resellers. This is ridiculous. If HP wants the world to adopt their product line, they need to do everything possible to educate the engineers responsible for deployments. If HP’s plan is to have their own services organization take the bulk of HP network deployments, they’ll lose all the value-added resellers. Those are the resellers they need the most, since they are the ‘trusted advisors’ for businesses. Without their support, HP will be forced to identify and win every networking deal on their own.

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