HP says it can "beat the crap" out of its networking competition in price-performance, a big selling point it employs in bids against Cisco. That's the exact phrase HP CEO Leo Apotheker used in describing his company's progress in networking to IDG Enterprise Chief Content Officer John Gallant:
...we must be doing something right, because quarter after quarter after quarter after quarter, we are gaining substantial market share. We have great technology. We cover a lot of space when it comes to networking. Our price-performance ratio must be very optimal because we just -- forgive me the expression -- but we, to use the American vernacular, "beat the crap" out of the competition. And that's good, we'll continue doing that.
Market share figures don't look substantial. HP's Ethernet switch share increased from 6% to 10%, as expected, after closing the 3Com acquisition in April of 2010, according to Dell'Oro Group. Over the next eight months, HP's share actually slid ever so slightly, to 9.8% in Q3 and 9.9% in Q4.
In fairness though, so did Cisco's, from 68.6% in Q3 to 67.4% in Q4. The big gainer was Juniper, with share rising from 1.7% in Q2 to 2.2% in Q4, according to Dell'Oro. Juniper, though, just entered the game so it's working from a much smaller base.
But who's counting? Apotheker says a big reason for HP's success is its converged infrastructure approach, in which customers buy networking, storage and services as a "solution" vs. piecemeal offerings. He says the networking gear is just plain good too, on a price/performance level.
And he dismisses criticisms from competitors -- like Cisco - that HP is just a low price play lacking an architectural blueprint or vision for transforming businesses operations and processes. That HP is a tactical, cost-conscious choice, not a strategic one:
...if we can do the same thing at a cheaper price than what he does, why wouldn't that be a strategic alternative? Help me understand what is a strategic alternative then?
And in servers, where Cisco boasted 700% growth in Q2 and an annual run rate of $650 million for its Unified Computing System, Apotheker said they must be selling them in another stratosphere because HP never sees 'em:
Gallant: Speaking of Cisco in the server market, is it a threat or an annoyance to HP?
Gallant: Can you expand?
Apotheker: We hardly ever see them.
Gallant: They claim that sales are growing pretty rapidly of the UCS system, but you're not seeing them in competitive situations?
Apotheker: They must be selling on planet Zircon.
And to drive the converged infrastructure point home, Apotheker says 3Com is fully integrated with HP's Enterprise Servers, Storage, and Networking division under Dave Donatelli and a valuable asset to HP's data center and cloud strategies:
We have many customers that we are now bringing into the cloud or springing up private clouds in less than 30 days. And part of it is, of course, also attributable to 3Com.
So is that "substantial" market share.
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