HP Vs. Cisco's Network

John Barker, president of Versatile Communications, a solution provider in Marlborough, Mass., expects Hewlett-Packard's ProCurve unit to continue to take a bite out of Cisco System's network hide over the next year.

STEVEN BURKE Can be reached at (781) 839-1221 or via e-mail at sburke@cmp.com.

Barker said it's gotten a lot easier to go against Cisco with ProCurve. In fact, Versatile's ProCurve business soared to $5 million in 2006 from $3 million in 2005. And he expects 2007 to be even better. The reason for the sales explosion, he said, is that HP's high-quality products are an outstanding value with a lifetime warranty at often half the price of the Cisco gear. "It's no secret that ProCurve has a very good value proposition," he said. "That always plays well with our customers."

What's more, the ProCurve unit has done a great job working hand in hand with the channel, according to Barker. "All these vendor programs talk about commitment to the channel, but these guys really mean it," he said. "They protect the channel and do a good job nurturing the channel."

Cisco won't talk specifically about the HP threat. But Wendy Bahr, Cisco's vice president of U.S. commercial channels, said Cisco is aiming to double the number of SMB partners it has in its stable to 6,000 over the next year from 3,000. Furthermore, she said the networking giant plans a refresh of its SMB effort later this year with new products and a stepped-up focus on partner profitability.

Cisco should be concerned. HP's ProCurve unit has doubled its sales over the past three years and is now a $1 billion-plus business with a dedicated network partner force of 4,500 registered reseller partners. HP's ProCurve investment is on the rise, and the company is moving deeper into Cisco's enterprise stronghold. Over the next several months, the ProCurve unit plans to release several new enterprise hardware and software products.

Barker said he sees even more trouble looming for Cisco as HP expands it networking footprint with more adaptive infrastructure products. And he said what has become known as the Cisco price premium is a big issue for clients.

"I only wish I was making the kind of margins Cisco is making," Barker said. "If I was a customer, I'd be asking for a better deal on those switches. You get a comparable, if not a better, solution with ProCurve for a lot less money. I don't know why you wouldn't consider them."

Who has the better network? HP or Cisco?
Send your thoughts to sburke@cmp.com.