HP Switch Deal Good for Users

HP's $28 million deal for Riverstone Networks will give IT managers new options

June 11, 2004

2 Min Read
Network Computing logo

Hewlett-Packard Co.'s (NYSE: HPQ) decision to acquire Riverstone Networks Inc.s (OTC: RSTN.PK) enterprise switch technology could spell good news for users, according to experts.

The Palo Alto, Calif.-based company forked out $28 million earlier this week to beef up its own ProCurve range of networking products with Riverstone’s XGS technology (see HP & Riverstone Sign Deal).

Last year Riverstone unveiled its XGS family of 10-Gigibit Ethernet Layer 3 switches -- the 16-slot XGS 9016 and the eight-slot XGS 9008. However, the company has now decided to refocus its efforts on the service provider market by selling off the enterprise switch technology and the associated software licenses.

So far, HP is staying tight-lipped on its specific plans for XGS, although the company has said that it will reveal a roadmap for new products based on the technology before the end of the year. However, Mark Thompson, worldwide sales and marketing manager for HP’s ProCurve range of switches, told Next-gen Data Center Forum that these will sit at the core of a network with the company's existing ProCurve boxes situated at the edge.

Dan Golding, senior analyst at Burton Group, believes that many organizations will be able to exploit their existing purchasing agreements with HP for the likes of printers and storage to get their hands on this new switching technology when it comes out.He says, “The good thing for a data center manager is the fact that they can now leverage their HP discount to get this stuff and get access to a very reliable platform.”

But the enterprise switch market is a crowded one, with Cisco Systems Inc. (Nasdaq: CSCO), Foundry Networks Inc. (Nasdaq: FDRY), Extreme Networks Inc. (Nasdaq: EXTR), and Enterasys Networks Inc. (NYSE: ETS) already jostling for position.

David Willis, vice president of technology research services at Meta Group Inc. believes that the acquisition of Riverstone could force dominant player Cisco to boost its own switch offerings, particularly at the high end. “It does put pressure on them to improve in management capabilities, services and security,” he says.

Willis believes that HP’s existing range of ProCurve switches already has strong security features, such as support for the 802.1X authentication protocol. The products also employ HP’s OpenView systems management software, which Willis sees as another plus.

But if data center managers are hoping for some price competition in the enterprise switch space, they should think again. The market is already heavily commoditized, according to Golding.He says, “Prices are already pretty low in the switch market. There’s a lot of merchant silicon that vendors can buy to put a switch together.”

Cisco declined to comment for this article.

— James Rogers, Site Editor, Next-gen Data Center Forum

Stay informed! Sign up to get expert advice and insight delivered direct to your inbox

You May Also Like

More Insights