Network World’s Jim Duffy, who has been covering the networking industry for a long time, considers whether HP and 3Com can muster value propositions that will persuade customers to choose them over Cisco in enterprise networking.
In his article, Duffy speaks with customers, analysts, and the vendors themselves.
3Com would have us believe it is back in the enterprise-networking game, even though it has abandoned that market twice over its long and colorful existence. HP’s ProCuve networking business, which HP once (and for a long period of time) considered divesting, is definitely putting price and margin pressure on Cisco. Nonetheless, it doesn’t quite have the end-to-end capabilities, particular at the network core, that Cisco offers.
For enterprise customers, value is assessed according to various and varying criteria, and Duffy covers the spectrum of factors comprehensively. In some cases, Cisco – with its 70-percent market dominance – will continue to repel invaders. In other instances, though, there is room for cogent alternatives to be brought forward.
Competitors might not always be able to match Cisco in breadth and depth of offerings, but there are enough openings and niches to build a competitive base.
I just wonder whether 3Com is the equal of HP, much less Cisco. In fact, Juniper stands a better chance of holding the number-three spot in enterprise networking than does 3Com.
In my view, 3Com is on borrowed time. It has the H3C products it developed in China, but 3Com’s relationship with Huawai – remember, H3C was a joint venture, an acronym for Huawai 3Com—is practically defunct, and 3Com’s sales in China are plummeting as a result. I just don’t see how 3Com, with its sales declining in China and its inability to compensate for those losses elsewhere in the world, will be able to sustain a meaningful challenge.
When customers look into 3Com’s past, present, and murky future, HP will seem a more credible vendor, one with the commitment and resources to stay the course. My guess is that 3Com is looking to be acquired before it gets squeezed too hard by its sharply falling revenue in China and its inability to compensate for that decline in other geographies. 3Com is positioning itself at the enterprise table, but I don’t think it has any intention of playing out its hand.
HP is a more interesting story. I think HP will go head to head against Cisco throughout the enterprise, eventually right through to the core of the data center, where virtualization of servers, storage, and networks will become increasingly important. Unlike IBM, HP is and will remain a branded player in the enterprise-networking market. It will buy products and technologies to fill gaps – such as in core switching – and it will increasingly find enterprise customers willing to consider it as a full-fledged alternative to Cisco.
Cisco could use the competition, and HP appears ready for the fight.