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Alone, one was a data center player and the other was an IP networking player. But when you combine the two, they create a data center networking rival for both Cisco and HP. Brocade acquired Foundry last July and since then, it has billed itself as the only true alternative to Cisco.
Another traditional networking player, Extreme this year put the final touches on its next-generation data center line in its bid to catch a piece of the data center pie. With the release of its BlackDiamond 8900 Series Modules for BlackDiamond 8800 Series switches, Extreme's new gear can be used end-of-row or top-of-rack to build Gigabit or 10 Gigabit Ethernet data centers.
In a move to re-establish itself in the enterprise market it abandoned years ago, 3Com this year brought its H3C line of gear to the U.S. and at the same time launched the new H3C S12500, a data center aggregation and core switch that offers a 6.6-Terabit fabric, can transmit 2.2 billion packets per second and offers up to 512 10 Gigabit Ethernet ports and 864 1 Gigabit ports. 3Com is billing the switch as a rival for Cisco's Nexus 7000 data center offering.
Did Someone Just Throw A Curve Ball?
Cisco Systems is reportedly telling its cadre of solution providers to reduce prices on its networking gear to match those of rival Hewlett-Packard's ProCurve Networking division, a move that has partners of the two vendors worried that winning a price war is a losing battle for the channel.
Two different Cisco and HP VARs have told CRN that they have been verbally contacted by Cisco and told to beat ProCurve pricing at all costs in a bid to win more deals. One VAR said the price matching is part of a new program Cisco is preparing dubbed "Ahead Of The Curve." Both VARs asked that their identities not be used for fear of retribution from Cisco.
"Cisco made it very clear in verbal communications that HP is the enemy and they're not going to lose business to them," one VAR said. "They said they're not going to lose to ProCurve on price."
And ProCurve has also gotten in on the price war action, offering 20 percent off its list price to customers who trade in Cisco equipment through Oct. 31.
Cisco has denied having a ProCurve price matching initiative but has refused requests for interviews on the subject. Instead, one Cisco channel executive crafted a blog post highlighting Cisco's position. The post, written by Wendy Bahr, Cisco's senior vice president of U.S. and Canada channels, neither denies nor confirms whether Cisco is telling partners to match ProCurve prices.
And while Cisco has refused to comment, ProCurve executives are embracing the alleged price matching, calling it "fantastic." "The win for us is awareness and the entrance into new opportunities," said Karl Soderlund, ProCurve vice president and general manager of sales and marketing for the Americas. "We're the price performance leader. We've built our business around it. We don't believe they're going to win more deals. This is another opportunity to drive us into more accounts and get more at bats."
Some VARs, however, said that it isn't in Cisco's nature to fully match ProCurve's pricing, which is typically between 20 percent and 40 percent lower. Instead, they see Cisco matching prices on a case-by-case basis.
Mark Hilz, president and COO of INX, a Lewisville, Texas-based solution provider, said he has not been told to match HP pricing, but added Cisco has gotten more aggressive on pricing and value proposition in response to ProCurve gaining more market visibility.
"They are willing to get aggressive and not let HP have any more market share," Hilz said. Cisco is more likely to offer aggressive pricing on deals where enterprises and certain verticals are under tight budgetary pressure and are extremely price-conscious, he said. Hilz said in some cases that has resulted in price matching to thwart HP from gaining market share, but those cases are few and far between.
"I don't doubt that on specific deals they get down to skinny margins when they have to," said Don Wisdom, president of Datalink Networks, a Santa Clarita, Calif.- based solution provider. "It's one thing to do one-offs and treat individual deals and discounts pretty deep," but a channelwide initiative to match ProCurve pricing seems unrealistic, Wisdom said.
UBS Securities analyst Nikos Theodosopoulos agreed that it would be "out of character" for Cisco to slash prices across the board, but that the vendor could be dropping its prices to edge out ProCurve on specific deals.
"I think Cisco, in select deals, is doing something to better compete with ProCurve on their lifetime warranty and pricing," he said, adding that it's a "case-by-case, select deals situation."
Theodosopoulos also said that "it's very non-Cisco to just go and match HP's pricing across the board."
Despite it being out of Cisco's character to wage a price matching war, Theodosopoulos said he can't dismiss the idea completely.
"I can't rule it out. Anything is possible," he said. "But you can't go back once you do something like that."
When Giants Collide
HP vs. Cisco is just one of the coming battles between technology's titans
Surprise, surprise. The contraction of the economy has led to accelerated consolidation of market positions by big IT vendors -- and some major players are really starting to step on each other's toes. What we're talking about is the carving out of brand-new theaters of war by industry giants who haven't traditionally competed with each other. Here's a quick look at some new vendor battles that have technology watchers breaking out the popcorn.
HP vs. IBM vs. Dell
The retail industry's mantra is "location, location, location" -- and tech companies are building their own "rule of three" around services. IBM really kicked its service transformation into overdrive about six years ago, and its success has shown that providing IT services for recurring revenue is a lucrative antidote to falling margins in a world of commoditized hardware. IBM's traditional rivals HP and Dell clearly want a piece of that action. Dell, in addition to shoring up its storage portfolio with the acquisition of EqualLogic in early 2008, gobbled up managed services software vendor Silverback in a less-noticed move that has quietly bolstered its services offering for SMBs. HP's acquisition of EDS last year means that IBM's major enterprise-level service engagements are squarely in HP's sights, but the company has also been very public in its effort to crack the SMB and midmarket segments. Can HP build a services business that pleases everybody -- or has the company bitten off more than it can reasonably chew?
Google vs. Microsoft
Microsoft's Bing search engine has garnered a lot of the headlines, and it was no mean feat for Redmond to break into search in such a big way. But for our money, the most interesting battle between Microsoft and Google isn't in search -- it's in the cloud, where Microsoft is attempting to counter upstart office products in the Google Apps lineup with its own Web-based versions of Microsoft Office, and at the OS level itself, where Google's ambitions with its Chrome venture could be the tech story of 2010.
Oracle vs. Oracle
Nobody doubts that Oracle CEO Larry Ellison has some grand plan for Sun, which Oracle said it would acquire back in April. But what that plan entails is somewhat of a mystery. Should the deal go through, Oracle would inherit a hardware business, stewardship of the Java platform, the Solaris OS and, of course, MySQL. Any one of those might have prompted Oracle to make the move. But suppose Ellison and Co. plan to blend as much of Sun into their own future as possible? One theory is that Oracle is preparing to hit the cloud in a big way. With Sun, Oracle doesn't just gain a server-building business -- it's also the owner of a heckuva lot of servers, a very cloud-friendly relational database management system and a highly scalable OS. Sounds like most of what you'd need to build massively scaled-out data centers that deliver SaaS products. Of course, that's where you'll also find the rub -- if Oracle is serious about taking to the cloud, it'll have to artfully navigate a potentially treacherous transition away from its softwarein- a-box model without too much cannibalizing of its own revenue streams.
And not being able to turn back is what some VARs fear. "Whenever you bring price into the equation, everyone gets squeezed," one VAR said. "I can tell you one thing; our margins will not go up."