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Time to Think of HP in Networking, Not Computer, Terms

Looking for a high-performance, low cost Ethernet switch. Chances are names like Cisco, Nortel, 3Com and Extreme Networks pop into your mind when you start your search. Yet, the hottest company in the switch area is none of these companies; it is Hewlett-Packard, which sells the ProCurve product line. Surprised, surprise, surprise.Perhaps, you shouldnt be. HP has been selling lots of switches for more than a decade. Yet not too many folks paid attention to the company because it concentrated on the low-end of the market, selling functional, commodity network devices at reasonable prices. Consequently, its products were usually not the ones with the leading edge, Gee Whiz features, which tend to garner a lot of publicity for a vendor.

Recent market changes have helped HP. Network equipment has been moving away from proprietary features to more open, plug-and-play, standard components. Historically, HP has been a major supporter of open, standards based systems. ProCurve has also been able to piggyback off of HPs well established manufacturing and distribution techniques to drive pricing down.

Whereas traditional networking suppliers have struggled to keep themselves afloat, ProCurve has been steadily gaining market share. Market research firm Dell'Oro Group found that the number of ports that ProCurve shipped increased by 46% from 2006 to 2007, double the industrys growth rate. Earlier this month, Infonetics noted that ProCurve is closing in on Cisco and emerging at the companys most significant competitor. Indeed with its keen focus on delivering functional, reasonably priced devices, ProCurve may be a better for medium and small enterprises than Cisco, which tends to sell premium products.

While ProCurve has been gaining momentum, the company still faces a number of potential hurdles. Like IBM, HP has been making the transition from a hardware vendor to a services company. How well network equipment fits in the companys long term plans is unclear. In fact, if you visit HPs main page, you do not see either the word network or switch. For the past few years, there has been speculation that HP would spin ProCurve off, a scenario that ProCurve executives have continually refuted. Not only does Cisco have significant market and mind share in the switching market, but the company also has a reselling agreement with HPs services group.

In sum, if a medium or small company wants a low cost, functional switch from a company that may eventually be spun off or bought by someone else, then ProCurves products offer an appealing option.

Have you installed any ProCurve equipment? How aggressively do local resellers market the product?