HP + 3Com: Show Me The Voice

With its $3-billion acquisition of 3Com Corp. last month, Hewlett-Packard (HP) believes it is now in a position to seriously challenge networking numero uno Cisco Systems for dominance in the enterprise data center.

The acquisition unquestionably made HP stronger in networking, but does it make it enough stronger on the voice side to hold its own with Cisco, and other competitors, in that market?

At the Interop show and conference in Las Vegas last week, Marius Haas, senior vice president and general manager of HP’s ProCurve Networking division, told a keynote audience that the 3Com acquisition and his company’s new “converged infrastructure” strategy—which it unveiled at the show—will “transform the industry and truly make this a two-horse race.”

According to Haas, HP spent nine months looking at “all the technology out there”—we’re not sure if he meant all the technology or all the technology from companies that might be potential acquisition targets—before pulling the trigger on the 3Com deal.

“We were amazingly surprised about how great the technology is that 3Com brings to the table, and how it really completes an end-to-end portfolio, from edge to core, as well as switching and routing,” Haas said. “And from a performance perspective, it’s twice the performance of our competition, with 30 percent less power consumption.”

HP’s perception that it is now in a two-horse race with Cisco may fatally underestimate the strength of Avaya—which recently acquired Nortel’s network equipment assets and business—and the strengths of off-shore competitors such as Siemens and Alcatel-Lucent. And it may also underestimate the importance of voice in the equation.

3Com does bring voice products to the newly merged networking entity—mainly aimed at the mid-market—but they were not its strongest suit. Voice did not warrant a mention in Haas’s keynote remarks about the amazingly surprising technology 3Com brought to the table.

HP spokespeople later made clear that at least for now, the company will continue to rely, especially in the enterprise market, on partnerships with voice specialists such as Avaya, Alcatel-Lucent, and Mitel to fill out its IP voice portfolio—and Microsoft, with which it made a major announcement last year around unified communications. Microsoft IP voice controllers plug directly into some HP ProCurve switches.

But while HP spokespeople said all the right things about the importance of voice, it was clear this was not a huge part of the message the company wished to deliver at Interop.

“Voice is one of the key applications we’re running on our converged infrastructure,” Paul Congdon, chief technology officer in the ProCurve networking business, told VoIPplanet in an exclusive interview at the show. “It’s another example of how we’re converging applications right into the network. Unified communications, voice—this is one of the really important areas for us.” Motherhood and apple pie, in other words.

What HP really wanted to talk about was the big picture—how the 3Com acquisition and the new converged infrastructure strategy would position it against new arch-rival Cisco.

The company believes that customers want greater simplicity in the network, more standards-based technology, more modularity and, above all, lower prices for networking and data center infrastructure. HP says it will deliver all of this, including lower prices.

3Com and HP have historically held a price advantage over Cisco in networking, Congdon said. He cited research from IDC showing HP’s ‘E’ series switching products with a 30 percent to 65 percent lower total cost ownership (TCO) than comparable Cisco products.

This is partly because of lower hardware and software prices, partly because the technology is easier to manage—in some cases requiring only 25 percent of the staffing required for competitive products.

HP is also betting that customers will want a one-stop shop where they can get all their networking and data center needs from a single vendor—tightly integrated servers, routers, and switches, storage systems, security hardware and software, network management and professional services. If it turns out they do, HP certainly has a case to make.

Unlike Cisco it builds its own servers and storage systems. 3Com clearly strengthens its offerings in switching and routing—and perhaps even voice. And with the new Converged Infrastructure architecture it will now offer “single pane” network management capability—meaning a single console for managing everything from servers to storage to routers and switches.

The “converged infrastructure” argument is perhaps somewhat undermined by the fact that HP still does not make most of its own voice technology. How tightly partners’ voice technology can be integrated with the rest of the array of technologies in the HP data center is something about which prospective customers might want to quiz the company closely.

HP also believes it has an ace in the hole in 3Com’s TippingPoint intrusion prevention system (IPS). It claims TippingPoint is the market leading IPS, already in use by a significant percentage of major enterprises.

“Security is a key component that you’re going to hear a lot more about because customers keep asking about it,” Haas said. “And last year [TippingPoint] prevented 2.3 times more attacks than anybody else in the market.”

The company also made hay of 3Com’s few major customer successes, almost all in foreign markets, including in China where it beat out Cisco in some important accounts, including the largest cell phone company. According to HP, 3Com holds 49 percent of the Chinese router market, 33 percent of the switch market, and is in 300 of the 500 largest accounts.

Yes, okay, HP is now an international juggernaut. We get it.

But it remains to be seen how many customers will be willing to abandon fruitful relationships with Cisco—and others—to embrace the potential advantages of HP’s converged infrastructure. Especially if voice is a poor cousin in that infrastructure family.

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