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7/28/2006
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Here's How One Competitor Challenges Cisco

HP ProCurve can't compete on price alone, so it offers easy-to-manage, standards-based systems with lifetime warranties.

Low-ball pricing by competitors hasn't made much of dent in Cisco Systems' share in most markets, but rivals have had success in some niches. Take edge switching. A Cisco Fast Ethernet port is priced at around $225; a competing Hewlett-Packard ProCurve port goes for only $44, according to the Yankee Group. Partially as a result, ProCurve has grown 25% annually for the last five years, grabbing second position in the LAN switching market.

ProCurve: a lot more than merely cheap

ProCurve: a lot more than merely cheap
HP ProCurve sells on price and simplicity in the midmarket, but it can't compete on price alone. Its other selling points include adherence to industry standards, easy-to-use management capabilities, a user interface similar to Cisco's, and a free lifetime warranty. "ProCurve impressed a bunch of us who tend to say, 'Well, we'll just give Cisco more money and grumble about it,'" says Jack Daniel, CIO at South Shore Imported Cars, a small chain of dealerships south of Boston. He recently bought an HP switch instead of going with Cisco.

HP isn't looking to compete with Cisco end to end. In fact, HP's outsourcing division still uses a significant amount of Cisco equipment. "For us to go to the next level, HP has to say that this is a critical business unit for us and put the focus on evangelizing," says John McHugh, VP and chief of the ProCurve unit. McHugh knows some customers question ProCurve's long-term commitment to the market, and he says his company isn't going away. But it's an uphill climb. HP may command second place in the LAN switching markets, but it does so with a measly 11% of ports.

Continue to the sidebars:
Chambers Q&A--Defending Cisco's Prices
and Cisco's Support Team Provides Another Edge

Return to the story:
In Depth: Chambers Is Changing Cisco's Pricing. How Far Will He Go?

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