HP's Procurve Gaining Ground In Networking

As customers in today's economy look for value and return on investment from their infrastructure purchases, HP's ProCurve networking line is gaining ground, said John McHugh, general manager of ProCurve.

And as networking players such as Nortel Networks and Enterasys Networks deal with their own internal financial problems, solution providers and their customers are turning to HP as a stable alternative, McHugh said.

Value-oriented customers in the government and education markets are especially interested in HP's networking solutions, said John Barker, president of Versatile Communications, a networking solution provider based in Marlboro, Mass.

"When we started with HP four years ago, our customers were surprised to hear HP had networking gear," Barker said. "But that has changed. People are lot more accepting of HP as a networking solution today."

Indeed, HP has gained significant ground in the networking hardware market, moving from the No. 11 position in the market to No. 3 in the past four years, with a goal of surpassing 3Com to become the No.2 player by the end of 2003, McHugh said.

The ProCurve unit plans to do that by offering customers lower total cost of ownership with a free lifetime warranty and aggressive pricing on leading-edge technology, and by offering solution providers more support and higher margins than the competition, McHugh said.

ProCurve also will take full advantage of HP's recent merger with Compaq by introducing Compaq's customer base to the ProCurve line, he said, adding that Compaq "pushed a lot of Cisco gear" in the past.

HP's LAN switching usually comes in at about half the price of comparable Cisco gear, said Barker, whose company sells both HP and Cisco hardware.

On the technology side, HP plans to drive the adoption of Gigabit to the desktop and Layer 3 and Layer 4 functionality in the wiring closet, McHugh said.

HP is in a unique position to drive Gigabit to the desktop, McHugh said. Soon every HP or Compaq PC will come with Gigabit Ethernet with no price premium. And ProCurve plans to break the price barriers on Gigabit Ethernet switching, McHugh said.

Many solution providers question the need for Gigabit on the desktop and wonder how many people really need that much bandwidth.

"It's not so much a question of bandwidth as it is a question of wait times," McHugh said. "Nobody likes to wait around for a file to download." But as pricing falls closer to that of 10/100 Ethernet switching, customers will adopt the technology, McHugh said.

As for bringing intelligence into the wiring closet, HP is focusing on offering Layer 3 functionality there at nearly the same price as Layer 2, McHugh said.

Customers already are asking for Layer 3 at the edge, Barker said. "I'm not sure they know what to do with Layer 3 at the edge, but all of my customers know that they will eventually use it," he said. "Right now they are future-proofing because they can get it for a small incremental cost."

And those customers will need help when they implement Layer 3 at the edge, Barker added. "From our perspective, Layer 3 means consulting dollars," he said.

Barker said HP's strategy is working for him. Partner margins are stable compared with those of other vendors, he said.

There will always be those customers that will buy only Cisco, Barker said. But customers looking for value feel safer going with a company such as HP, rather than a second-tier networking vendor that might not be around five years from now, he said.

And HP's networking channel team gives solution providers extra attention, Barker said.

"They realize that it's a lot easier to sell a Cisco solution than an HP networking solution," he said. "So their support is surprisingly good."