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HP Exec: ProCurve Business Is Not Up For Sale

Hewlett-Packard is committed to building its $650 million networking unit, ProCurve Networking, and does not have the organization on the shopping block as it once did.

Networking

Matt Hutchinson, director of segment marketing business solutions Americas with ProCurve Networking by HP, also said recent moves by the company to beef up its channel programs have led to steady gains in the number of VARs carrying his company's networking lineup.

"We're not being sold at all," Hutchinson said. "We are all about organic growth. Things are going phenomenally well in the United States. I think the whole business is growing at a nice rate."

Since enhancing its channel program, Hutchinson said, the number of solution providers in ProCurve's Elite category - - it's top category - - has grown from 10 to 31.

As recently as 2005, HP was contemplating a sale of ProCurve to private equity. Then, the company was transitioning its CEO leadership from Carly Fiorina to Mark Hurd as HP sought to refocus its business. But a deal never happened and, instead, the unit has been seeking to build its channel sales through some reorganizations of its program, new incentives for resellers and weakness among other rivals. Hutchinson touted ProCurve's Top 2 market share position trailing only Cisco.

Hutchinson claims that Cisco is so concerned about ProCurve gains that the networking giant has a special promotion going on right now that offers Cisco VARs a bounty for displacing HP ProCurve gear. "I say that is the best thing that could ever happen to us," he said. "Bring it on."

Cisco spokesmen did not immediately return a call for comment.

Palo Alto, Calif.-based HP is clutching onto its ProCurve unit at the same time rival 3Com has been attracting potential buyers among private equity firms. ProCurve is fighting to position itself as being in a two-horse race with Cisco, San Jose, Calif., and in the market ahead of struggling companies like 3Com.

HP executives point to industry estimates showing the unit has been registering 25 percent growth, year over year, for the past several years.

"I'm finding a lot of (solution providers) are carrying the Cisco program, but a lot of them are big HP partners," Hutchinson said. "We have such a great internal opportunity that we need to capitalize on it and we're starting to do that."

Solution providers applauded HP's recent ProCurve channel iniatiatives.

"We have a very good relationship with both Cisco and HP Procurve," said Reza Zarafshar, president and CEO of Advanced Computer Concepts, a solution provider based in McLean, Va. Zarafshar said he had not been approached by Cisco with such a bounty on ProCurve accounts, but he noted that HP ProCurve's recent changes to shore up its channel program - - among other things - - have given the company a boost.

"Obviously they are building some momentum, and they have a good channel program," Zarafshar said. "The decision as to what brand to lead with is really made more based on a combination of criteria.

"It's really determined by the customer, including the current environment, plans for the future, the kind of budget that they have and what they are going to be using their network for," Zarafshar said. "These are really the criteria that is normally used, that our engineering staff uses, to determine the products that work best for the customer."

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