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HP Ratchets Up Ethernet Price War

Hewlett-Packard Co. (NYSE: HPQ), which is best known as a systems vendor, added some flesh to the bones of its long-term networking strategy this week (see HP Expands Switch Family).

It may not exactly be the news that other players in the enterprise networking market are looking for: HP is stressing lower prices in its mission to get a bigger slice of the market.

The firms approach appears to be a fairly simple one: Focus on the network edge and attempt to undercut the competition. Last month, for example, HP went after market leader Cisco Systems Inc. (Nasdaq: CSCO) with its 3400cl switch; and it's got big plans for the networking technology it acquired from Riverstone Networks Inc. (OTC: RSTN.PK) earlier this year (see HP Gears Up for Switch Price War and HP Switch Deal Good for Users).

HP is using its ProCurve switch line to entice users to its Adaptive Edge strategy. This means that devices on the network edge handle the likes of authentication, routing, and traffic management, as opposed to products at the network core.

Up until now, HP has kept its long-term plans for enterprise networking strategy under wraps. But the company told NDCF that products based on Riverstone’s XGS switch technology will be available in mid-2005. Essentially, these will be stripped down routing switches, providing a high-speed interconnect between devices situated on the edge.

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