HP VP: Networking Battle Against Cisco Yielding Astronomical Sales Growth

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Hewlett Packard Vice President Phil Walton Friday said HP is seeing an astronomical 2,000 percent sales growth explosion in its networking business as a result of its full court press against market leader Cisco.

"Our networking business is growing by 2,000 percent," said Walton, who oversees financial industry sales for HP's enterprise group. "It is absolutely incredible. It is really growing like crazy!"

Walton, who oversees the financial industry sales segment for HP's enterprise business, made the comments in an interview with CRN after a keynote session at $263 million solution provider NWN's sales kickoff conference.

The whopping 2,000 percent sales growth includes a wide range of HP networking products from the edge of the network to the core of the network in the data center, he said.

Among the major HP Networking wins are deals, Walton said, with Coca Cola, Walmart, Fidelity and Goldman Sachs. And, he said, there are other significant networking wins that are soon to be announced by HP. He said HP currently has 400 networking proof of concept pilots going on with customers.

Walton's comments come after Cisco shares plummeted 14 percent Thursday after the networking leader reported year-over-year declines in switching and routing revenues for its second quarter. That's the heart of the market that HP is attacking with what it has called an all-out attack on Cisco's 80 percent networking margins.

“The company is clearly losing share in two significant product categories, with switching sales down sequentially for three consecutive quarters (down 10.8 percent quarter-over-quarter in fiscal Q2) and router sales declining 8.9 percent quarter-over-quarter,” wrote Troy Jensen of Piper Jaffray in a research note after the Cisco results. “The combination of margin erosion and market-share losses has turned us neutral on the stock.”

Walton, for his part, said that HP's new converged infrastructure networking technology is reasonating with customers. This in market, he said, where Cisco up until now has not had a clear major competitor. "The dual vendor strategy is really taking place," Walton said, noting technology consultants are advising customers to do deep dive head to head comparisons between Cisco and HP.

The message, he said is simply: "You have dual vendor strategies in the server market, the storage market. But you don't have it in networking. Look at HP. They compete with Cisco in the marketplace. Have a dual vendor strategy whether you have Cisco in the core and HP on the edge. That's OK. They can cohabitate."


Next: HP Promises 40 Percent Savings Vs. Cisco

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