The rivalry between HP and Cisco has to rank among the biggest and baddest in the IT world.Cisco often slings dirt at HP, calling it names (the “good enough” network), running demonstrations of HP gear compared to Cisco’s, and writing trash talking blog posts.
We asked Mike Banic, vice president of marketing for HP Networking, to tell us how HP plans to compete with Cisco in the coming months.
The answer is to attack Cisco where it hurts: the closed, proprietary software that powers Cisco’s gear.
Cisco’s previous woes were HP’s gains.
“HP Networking is earning customers and taking market share from Cisco. Over the last three years, two-thirds of the marketshare Cisco lost went to HP. We have found that customers are tired of overpaying for legacy network equipment that lacks simplicity, openness and innovation,” Banic told Business Insider.
But Banic’s got his work cut out, too.
HP’s network business closed 2011 at $2.6 billion in revenue (and did $586 million last quarter), which is not a big business for HP. But network gear, servers and storage are melding into all-in-one hardware, and Cisco claims it is making gains at HP’s expense. Cisco recently announced its 10,000th server customer — and that’s dangerous for HP because servers represent $13.5 billion of revenue.
By the first quarter of 2012, Cisco was growing its revenues while HP’s success flagged, with year-over-year revenues flat.
HP addressed that with a surprising move: it launched 16 new models of network switches that use a hot network technology called OpenFlow. OpenFlow, also known as software-defined networking, will do for networks what VMware did for servers. (One startup in this area, Nicira, is even backed by VMware founder Diane Greene).
OpenFlow takes aim at Cisco. Cisco’s premium prices come from the features it adds to its software, which it calls “intelligence.” OpenFlow is like an open-source alternative to that intelligence.
Here’s the full transcript of the interview:
Business Insider: How does HP Networking plan to compete with competitors including Cisco and Dell (with it’s Force10 acquisition)?
Michael Banic: HP Networking is the No. 2 provider to enterprises and delivers the industry’s only unified networking architecture for the data centre, campus and branch, which enables customers to fully harness the power of media-rich content, virtualization, mobility and cloud computing.
The HP FlexNetwork architecture converges network silos by ensuring protocols are implemented consistently across all networked devices throughout an enterprise. As a result, enterprises are able to simplify and speed service delivery, driving increased agility and innovation
Unlike Cisco and Dell, HP bases its technology on open standards and simplifies management to a single interface across the entire networking infrastructure, overcoming conflicting architectures, custom bridging and complex administration processes.
BI: What are your thoughts on software-defined networking/OpenFlow and network virtualization via startups like Big Switch and Nicira? How will this change the industry and what is HP doing to take advantage of it?
MB: Software defined networks (SDNs) is where the industry is going. The flexibility and level of control allows for dynamic configuration of networks in order to solve major obstacles today related to how data flows across an infrastructure. HP has been involved in SDN standards from the start, working closely with Stanford and Berkeley since 2007 to foster the development of the SDN OpenFlow standard. HP has helped to pioneer the expansion of virtualization beyond the data centre and into the network, making SDN a critical development.
In February, HP announced commercially available OpenFlow software for 16 switches product line, including the HP 3500, 5400 and 8200 series switches, representing over 10 million installed ports. This software has been tested by more than 60 installations with universities and researcher institutions including Indiana University and the National Science Foundation’s Global Environment for Network Innovation project.
There are lots of start-ups exploring SDN, which is great to see. What they lack is the full enterprise view, experience in the market and resources to fully serve the enterprise market right now.
BI: HP acquired 3Com for $2.7 Billion in 2010, so it’s been over a year now. How has that acquisition paid off?
MB: With the addition of 3Com, HP Networking created an end-to-end switch, router and wireless LAN portfolio to support the broad set of customer needs. The 3Com product portfolio complemented the HP ProCurve products by adding the data centre and wide area network markets, delivering key innovation that has advanced the HP FlexNetwork architecture.
BI: Cisco loves to bash HP, calling it the “good enough” network. What is HP doing that has gotten Cisco so riled up?
MB: The networking market has been starved for competition to drive innovation and higher value to benefit customers. HP has introduced a better option to the market by directly addressing customer pain points that had been left untended for years. By introducing a multi-vendor strategy, enterprises can start to plan their networks the way it will most benefit their organisations, not how a single vendor dictates to them. HP technology is based on open standards, built to be flexible, reliable and easy to manage, all for a lower total cost of ownership than the alternative.
HP Networking is earning customers and taking market share from Cisco. Over the last three years, two-thirds of the marketshare Cisco lost went to HP. We have found that customers are tired of over paying for legacy network equipment that lacks simplicity, openness and innovation.
BI: What are the reasons for converging networking and servers in the data centre?
MB: Data lives on storage, works on servers and commutes on the network – just like the boundary of home life and work life are blurred more than ever, so it is true in the data centre.
New technologies such as federated applications, virtualization, virtual machine mobility are changing the “commuter traffic patterns” on the data centre network such that 80% of the traffic “commutes” server to server. HP’s Converged Infrastructure strategy creates tight integration between storage, servers and the network, delivering better application performance, simpler management and greater economics.
Two HP network virtualization innovations that address these data centre “commuter traffic patterns” and are unmatched in the industry, Virtual Connect and the Intelligent Resilient Framework. Third-party testing show these innovations improve virtual machine mobility performance by nearly 80% and failure recovery time by over 500X.
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