HP Moves Hard on Cisco

Hewlett-Packard Co. (NYSE: HPQ) says it's now shipping Cisco Systems Inc. (Nasdaq: CSCO) MDS 9000 switches -- and it says it's pricing them at up to 30 percent less than IBM Corp. (NYSE: IBM).

Under the companies' reseller agreement, HP will offer Cisco's MDS 9509 director and MDS 9216 fabric switch. HP says it has completed an initial phase of interoperability testing, having qualified the switches with its entire line of StorageWorks arrays and with Windows, HP-UX, and Linux operating systems. The switches will carry the Cisco brand; HP will offer primary support and implementation services for them.

A big part of HP's strategy is to roll out the Cisco products at price points that are roughly comparable to those for Brocade Communications Systems Inc. (Nasdaq: BRCD) and McData Corp. (Nasdaq: MCDTA) switches, which HP also resells.

"We felt it was important to approach it with a price-competitive model," says Roger Archibald, VP of infrastructure and NAS in HP's Network Storage Solutions group.

Here are the initial list prices from HP for the various configurations: Table 1: HP's Pricing for Cisco MDS 9000 Family

At those price points, HP will seriously undercut IBM's announced pricing for the same products. For example, IBM is selling the 16-port MDS 9216 for $52,263 list -- making HP's pricing 26 percent lower for that switch. Meanwhile, Big Blue is selling a 9509 director with 32 ports for $189,372, which is actually more expensive than HP's price ($176,187) for a 64-port system (see Cisco Gets Set).

However, IBM has lowered its list prices on the Cisco switches since first announcing them in February. According to an IBM document dated April 15 obtained by Byte and Switch, the company is now selling the MDS 9216 for $35,000 list -- which would be slightly under HP's pricing. Asked to confirm this information, a company spokeswoman says, "IBM is not making revised pricing available currently."

Archibald claims customer interest in the Cisco SAN switches has been tremendous. HP has an order backlog for the Cisco MDS 9000 switches of "dozens" of customers in all major geographical regions, some of which represent "multimillion-dollar deals for the switches themselves," he says, adding that the Cisco and HP sales organizations are working together to close business.

At least initially, HP doesn't believe customers will undertake aggressive, broad-based deployment, particularly in "business-critical environments," Archibald says. Most of HP's initial orders for the Cisco gear have been in greenfield environments or secondary SANs. "We have not seen rip-and-replace deployments," he says. [Ed. note: No ready-to-wear deployments, either, we presume.]

But what about the skepticism of some industry observers who say HP and other OEMs will be reluctant to push Cisco's SAN gear? Nonsense, says Archibald: "You can see by the field engagement and our pricing that that is certainly not the case for HP. We really are trying to take the approach that since we have all three switches in our portfolio, we're going to provide the solution that best meets a customer's needs."

The Cisco switch is the best fit for a mixed-protocol environment, Archibald says. "We think they have a lead on integrating IP into a Fibre Channel environment," he says. For the MDS 9509, Cisco offers an IP storage services module that can support both iSCSI and Fibre Channel over IP (FCIP) simultaneously on each of eight Gigabit Ethernet ports (see Cisco Implants IP in SANs).

Archibald says HP did find some performance issues with the MDS 9000 switches early on, some of which had to do with timing between HP's arrays and the switches. But he says HP encountered nothing as serious as the out-of-order and dropped frame issues that Brocade alleges have been affecting the Cisco boxes (see Brocade & Cisco: Who's Out of Order?).

"Some of these issues were subtleties in the Fibre Channel protocol, and we worked with them to understand the way we've interpreted them and how we work with each other," he says. "They fixed the issues -- otherwise we wouldn't be shipping the product." Over time, HP plans to qualify the MDS 9000 switches for other operating systems, such as Solaris, Tru64, OpenVMS, and AIX, but the company does not plan to certify the Cisco switch with other vendors' storage systems.

"First of all, we don't sell other people's storage," Archibald says. [Ed. note: Errrrrr... actually, Roger, HP resells the Hitachi Data Systems (HDS) Lightning array. But we think we get your drift.] "We're going to rely on Cisco to work with their partners... instead of duplicating testing."

Todd Spangler, US Editor, Byte and Switch