Survey sheds light on HP merger with 3Com

With its acquisition of 3Com Corp., Hewlett Packard Development Co. Ltd. has expanded its switch and router offerings but is still not a leader in the core networking space, according to an American research firm.

TheInfoPro Inc. of New York recently surveyed IT staff at 250 large corporations and asked them about their technology acquisition plans and how they view the network equipment manufacturers, said Bill Trussell, TheInfoPro’s managing director for networking.

“We were looking at whether HP was going to be on people’s short list for core switching products in the new data centre,” Trussell said. “HP has been consistently a fairly highly rated organization in the networking space but it’s typically more at the network edge and not in the core backbone network.”

An HP Canada (NYSE: HPQ) spokesperson said, in an e-mailed statement, the firm “is so confident in our new core and data center networking products, that we recently announced our newest internal data center will run completely on HP networking products.”

He was referring to an announcement last April that HP’s Houston data centre would have no equipment made by Cisco Systems Inc.

When HP initially announced its intent nine months ago to acquire 3Com, analysts predicted the move would scare officials at Cisco, the San Jose, Calif. network equipment manufacturer which dominates the enterprise switch and router market.

In the HP Canada statement, the spokesperson wrote: “The new combined HP Networking portfolio provides clients with an advanced network fabric that is up to twice as fast at half the energy use, and delivers 30-65 per cent lower total cost of ownership than competing solutions.”

Trussell said the general consensus from users who talked about HP was they get “superior” warranty support from the Palo Alto, Calif.-based vendor.

Before it acquired 3Com for US$2.7 billion, HP had its own switches, dubbed Procurve. Now it has rebranded both the 3Com and HP products, which include the TippingPoint intrusion prevention systems. The acquisition also means with HP, IT departments can get their servers, storage, switches and routers from the same manufacturer.

TheInfoPro also asked for users’ views on Cisco, Juniper Networks Inc. and Brocade Communications Systems Inc.

San Jose, Calif.-based Brocade originally specialized in storage-area networking, host bus adapters and data centre products but expanded into local-area networking with the acquisition two years ago of Foundry Networks Inc.

TheInfoPro’s survey did not quantify market share, but Infonetics Research Inc. of Campbell, Calif. reported in May that San Jose-based Cisco has about three-quarters of the Ethernet switch market when measured by revenue. Infonetics broke out HP and 3Com, which combined with Avaya Inc. had about an eighth of the market.

Trussell said market share reports “can vary all over the place,” depending on whether one measures by the number of ports shipped, the number of backplanes shipped or the number of chassis shipped.

“Cisco has had a market share lead over their closest rivals,” Trussell said. “Typically there has to be a compelling reason for an organization to switch from an incumbent provider to an alternative, and when they do switch it is often for reasons other than price. In our data, it comes down to performance and support more so than price.”

Trussell said there is little difference between users’ perceptions of Cisco and their view of Juniper’s products.

Juniper announced in May the EX 4500, along with other networking products, designed to support virtualization in the data centre. It also rolled out the MX 80 3C Ethernet edge router. Sunnyvale, Calif.-based Juniper makes both carrier and enterprise networking equipment, as well as firewalls and other security devices it inherited when it acquired NetScreen five years ago.

Cisco made waves in the data centre market last year when it announced Unified Computing System, a series of blade servers designed for virtualization.

The move prompted a backlash from HP, which eventually led to Cisco dropping HP as a certified reseller.

Trussell said enterprise IT managers looking to upgrade their core switches to 10 Gigabit per second (Gbps) Ethernet “will typically look at Cisco and Juniper.”

“In some cases they will look at Brocade but less so.”

Brocade said earlier this month it is working on a 100 Gbps Ethernet module for its NetIron MLX switches.

During a media tour at its San Jose, Calif. headquarters, a Brocade official told IDG News Service that the NetIron MLX will be able to accommodate 32 100-Gig ports.

Vendors are expected to release more of this type of product, now that the Institute of Electrical and Electronics Engineers (IEEE) has ratified the 802.3ba standard for 40 and 100 Gigabit Ethernet.

This standard will encourage corporate IT managers to combine data networks and storage networks in data centres, Trussell said.

Juniper is shipping a 100-Gig line card for its T1600 router, and last year Nortel Networks Corp. ran trials of a 100 Gbps product in Europe.

Nortel is operating under bankruptcy protection and last year sold its data networking business to Basking Ridge, N.J.-based Avaya, which itself was spun off by Lucent Technologies in 2000.

Brampton, Ont.-based Nortel also sold its carrier wireless assets to Telefonaktiebolaget LM Ericsson of Sweden and sold its carrier Ethernet and optical networking assets to Ciena Corp. Founded in 1895 as Bell Canada’s manufacturing unit, Nortel was previously known as Northern Electric and plunged into the enterprise data networking market with its acquisition of Bay Networks in 1998.

“We talked to a number of organizations that are legacy Nortel users and the sense we go is it’s kind of a wait and see environment,” Trussell said. “Prior to the acquisition they were actively looking to leave and hoping they wouldn’t have to.”

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