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As IT Demands More Of Networks, Expect HP-Cisco Rivalry To Intensify

Across IT, many observers have identified three broad trends going forward: mobility, cloud computing and the consumerization of IT. When it comes to networking, these trends are expected to drive demand for more bandwidth capacity and, increasingly, wireless network architecture. In addition, 2012 is expected to see a continuation of the intense rivalry between industry leaders Cisco Systems and HP, as the latter tries to chip away market share from the former.

The combined trends of mobility and consumerization will force network administrators to invest more in wireless networks and less in wired networks because of the simple fact that tablet computers don’t have Ethernet ports, notes Saar Gillai, CTO of HP’s networking business. "Tablets don’t have cable," Gillai says, adding that younger workers, in particular, are increasingly bringing their tablets to work with them. "A tablet is something they expect, not something that’s new and exciting. If their primary tool is something they can’t connect to the network, it’s going to be a problem for them."

At the same time, newer smartphones are usually equipped to connect to the Internet via Wi-Fi at a user’s home, workplace or in public places instead of just on the carrier’s network, he adds, which will increase workload demands on Wi-Fi networks. Also, as mobile devices become more powerful, they are used for more sophisticated applications, such as videoconferencing, requiring even more bandwidth.

Demand for higher-capacity networks is also driven by cloud computing, be it on public or private clouds, Gillai says, noting that legacy network technology is being replaced by network fabrics that offer multipath connectivity for ever-increasing loads. But while HP is offering technology such as Intelligent Resilient Fabric (IRF) that aggregates multiple switches to act as one, he says, other HP innovations are more long term.

In the rivalry with HP, Cisco has positioned itself as the innovator in networking while portraying HP as the provider of the "good enough network." Conversely, HP has touted itself as the best alternative to Cisco’s market dominance. "Customers need to have choice. If customers have choice, we believe we will win more often than not," Gillai says.

While HP claims to be taking market share from Cisco, the record is actually mixed. HP touts market share gains that it says are at the expense of Cisco, but it has lost market share more recently. While HP’s share of the Ethernet switch market --just one component of all networking technology--reached 12%, based on revenue, in the first quarter of 2011, it fell to 10% in the third, according to numbers from Dell'Oro Group.

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