HP Networking Boss: 3Com Perfect Match To Take On Cisco4:57 PM EST Thu. May. 06, 2010
It's been less than three weeks since HP first detailed integration plans for its 3Com acquisition, but its top executives have wasted no time telling HP and 3Com partners exactly how they should be thinking about it. From CEO Mark Hurd on down, HP has spent much of the past two weeks, especially at the HP Americas Partner Conference and Interop, telling partners that there's a new networking sheriff in town and it's time to saddle up.
Of course, being that new sheriff means going toe-to-toe with networking titan Cisco, and in that sense, it's one more front in the increasingly contentious war between HP and Cisco over domination of the data center and share of channel minds and wallets. HP will be tested in the coming months as it attempts to convince skeptics that 3Com was the right acquisition at the right time and that a channel some say was left for dead can find new life as part of the brand new HP Networking group.
VARs are excited at the possibilities. But Cisco isn't exactly a shrinking violet.
Earlier this week, with the partner conference and Interop hype dying down a bit, CRN Networking Editor Chad Berndtson caught up with Marius Haas, senior vice president and general manager of HP Networking, to pick over some lingering acquisition and channel issues. Excerpts of the conversation follow.
You said during your keynote at Interop that HP was "amazingly surprised" by what you found in 3Com's technology. Was it that much of a surprise? The knock on 3Com for years has been great technology and that legacy of R&D, but a channel that fell by the wayside.
We realized we hadn't spent that much time looking at the H3C portfolio as much as we should have from a competitive standpoint when we competed with 3Com. It's a perfect combination for us, and we're committed to educating people on the history of 3Com, how robust it is and how well proven it is in some very competitive markets. A lot of that hadn't really migrated over into the Americas markets and the European markets as of yet, that they were building out an enterprise-class channel program and just embarking on it. It takes time and effort.
Once we looked at it and saw what we had, we were very excited. That portfolio is best in class performance, power management, all at a total cost of ownership model that's very complementary to our open architecture. It works in heterogeneous environments. It was the perfect combination for an enterprise go-to-market standpoint for our thousands and thousands of partners. Having the full portfolio, edge to core, switching to routing to security, and marrying that up to partners with capabilities, it's really what we needed.
What are you hearing from the longtime 3Com partners who don't already partner with HP? The ones I've connected with are excited but still weary after what they've been through with 3Com and they have a lot of questions for HP Networking.
I think there's two stories. One story is the really loyal, long-term 3Com players that migrated toward having more voice-type solutions. They're asking the questions: where are you going with VoIP and how do I fit into the mix. Then there's the new generation of 3Com partners that have invested in higher-end data center type capabilities. We're going to fold both of those types into our overall program, and we will have a new CIE, converged infrastructure elite, category where networking will be a core component but the partners expand beyond networking and do servers and storage and the full spectrum of capabilities. It's very attractive because we're embracing all partners, but unlike other competitors, we have not saturated the market on a coverage side.
How are you bringing 3Com partners into the HP fold?
We're grandfathering them in. We understand they already have certain levels of certifications; you have 3Com, maybe you're already a Cisco gold with x-number of CCIEs. You're not going to start from scratch, you're going to start with the level of investment you've made and make sure you get opportunities in line with what you have. It'll be enticing for them.
NEXT: 3Com's Voice, Security and SMB Products Find New Homes
We know where the TippingPoint products will fall within HP Networking but how will you continue to grow this line?
TippingPoint was a wonderful gem that came with this acquisition. Customers are telling us, I want a more flexible network architecture, I want to have a better cost structure and I want it to be more secure. TippingPoint and the capabilities it has prevents more attacks than anybody else, identifies all other vulnerabilities, and now these capabilities we can bring to a broader audience. We're going to aggressively look at it and target it.
3Com also brings you a voice line. This is somewhat new ground for HP.
A little bit. As you know, we announced a partnership with Microsoft supporting UC aspects and we're continuing to drive that with Microsoft. We've got partnerships with Avaya and Alcatel-Lucent on the enterprise-class voice stuff. The 3Com voice solution is very good but mostly tailored to the midmarket. Job one is to make sure we have the networking enterprise nailed, but we will continue to drive and continue to invest in the voice solutions and make sure they're clearly very solid. Where it makes sense, we'll work up stream with our voice portfolio to offer a broader set of capabilities to the enterprise and data center.
And you'll continue to nurture OfficeConnect, the lower end products?
Yes we will. We will invest in it. There are a lot of a partners skilled in those capabilities and it's important to the broader HP networking story. Absolutely.
With all these tools in mind, can you articulate a bit more the fundamental differences in partnering strategy between HP Networking and Cisco?
Yeah, one, you've got to have technology that people want, and it's got to be an architecture that is driving industry, open standards, is modular, and gives the customer flexibility to deploy it when they want and how they want without locking them in to any proprietary stacks. It has to be not only a great technology, but it's going to be delivered the way they want and delivered on economic terms that are radically different than what they're used to. Job one, right? Now you have something customers want and you have to make sure that the customers are well-incented, so what we've done is we've enhanced our partner program significantly on the economic side and we're rolling that out to partners as we speak. Part of the event we had last week, Mark Hurd held a meeting with a pretty exclusive group of CEOs of some of our top channel partners and went through the programs with them. Every one of them came out of there pretty excited. We feel we've got the right understanding with our channel partners and we're very predictable in our approach.
What other impressions did the CEOs in that meeting give you?
That they were very committed to going on this journey with us. This is not asking them to make a choice, this is not saying, it's this or it's that. Here is our program, and here is the incremental value that you and your business can gain from it. Here is how it is differentiated from others. We'd love to have you as part of this journey. The feedback from customers has been extremely positive; we nailed all the key items. The key thing they want to do now is have clear communication of all the reference-able sales out there to see the momentum happen.
So HP isn't applying pressure on solution providers to sell HP only, or HP versus Cisco?
No. [pause] No. We like people to sell HP solutions, and we will incent them to do so. But we're not going to say 'You need to do one or the other' -- we're not asking for that. We believe that the market will choose and I think the partner community will follow what the market looks for.
NEXT: How HP Picked 3Com From The Crowd
ProCurve emerged as a strong No. 2 on its own and became a challenger. I guess, why can you not get to the next level without 3Com?
We've been using a slide that shows the portfolio we had before, where our gaps were and how with 3Com, we fill in gaps with everything from the data center and core switching products to a full suite of security products and a consistent, single pane of glass management solution. We didn't have that, from edge to core, before. We had a great edge story and very large enterprise accounts deploying it across the board, but partners said, 'Marius, we want more.' We looked at the full portfolio, and looked at build, partner or buy, and to build it internally was going to take too long. The market demand was now. So we spent a lot of time looking, and we're 110 percent convinced that this was the right choice and the right technology, edge to core, swiching to routing. We looked at everyone.
Across the board?
Maybe except Cisco [laughs]. But everyone else you should assume we looked at.
Your Interop keynote also included mention of a two-horse race, meaning you and Cisco, in this market. Juniper doesn't have the scope and the breadth as HP and Cisco but you don't think they should be in the conversation? They have a loyal channel.
You know, I respect the competition. Juniper is a good organization and a good group of people. I know [Juniper CEO] Kevin Johnson personally. They've done a good job in the service provider space, I will give them that. The enterprise space is still to be proven, and I think they're predominantly riding the coattails of IBM into the enterprise space. As the 3Com people found out, it's hard to do the job on a global basis. We just think people in the enterprise space are going to be looking at Cisco and HP, as the true number one and the true alternative. There will be pockets of Juniper, sure, but our products are better. As you said, some of the partners are loyal and they'll still get a good look. They have the service provider space.
So HP did seriously look at Juniper? It's sort of pointless to speculate about who's going to buy who, but there are more than a few partners out there wondering why they didn't seem the right target.
Sure, but go talk to the bankers and they'll give you the financial reasons why this made a lot more sense. But, hey, look, we came at this from the technology stuff. We looked at the Brocade stuff with the Foundry stuff, we looked at 3Com, we looked at Juniper, we looked at everybody, and this [3Com] was much more compelling than any of that. It was a pretty easy decision. If you look at the financials, it was an easy call.
Where does growing HP Networking rank on Mark Hurd's list of priorities right now, you think?
I'll use this example. Of all the things he could have been doing last week, when he was there [at the HP Americas Partner Conference] for a day and a half, he spent six hours with partners just talking about networking. The broader agenda of converged networking is hard, but we believe it's a tremendous market opportunity -- a $40 billion opportunity that we think we can disrupt with better technology. We feel very well positioned to do it, it's a tremendous value proposition for our partners, and they're going to benefit from it. Anywhere you go, when you hear Mark talk, this is going to be in his top three things to focus on.
Will you continue to invest in internal resources, including channel staff, to grow HP Networking in the short-term?
My channel business, my go-to-market, is well over 90 percent indirect. The channel is by far the biggest and most important investment. I've got to cover it, and part of the programs is significant investment in training and certification and getting (partners) what they need, and, to your point, adding the inside sales reps and back office support in order to make them successful.