HP, 3Com gear-up for switch battle with Cisco

Longtime number one in switching is facing greater competition

Cisco's dominance in enterprise switching is legend. But HP and 3Com have put together compelling product portfolios and value stories, which add up to the first real competition the switch king has faced in years, and buyers are beginning to pay attention.

For example, Quinnipiac University, a private coeducational institute in Connecticut, US, and previously a Cisco shop, recently upgraded its network with gear from 3Com. "Several of my peers were curious as to why we left the mother ship ... but it all fits into a risk-reward ratio," says Fred Tarca, associate vice president of information services. “We stuck with our fundamental principles of wanting a good product at the right price that is supportable, with a team and a company to back it up. Those requirements were met by 3Com."

3Com and HP's ProCurve network group say their respective gear – much of it developed within the past few years – offers better overall value in terms of price, performance, port density and power consumption.

Ron Sege, president and CEO of 3Com, says the H3C enterprise equipment his company is bringing out of China was built from the ground up in the past four years, enabling the company to take advantage of the latest ASIC and other technology advances.

As well, the company is trying to use its success in China to convince US domestic buyers to give it another chance after twice pulling out of the North American enterprise market. "We already have a million routers installed in China, half a million switches and common management for the whole range of gear," Sege says.

In fact, China uses the H3C equipment to power eight out of 12 national backbones, including its transportation, education and energy networks, Sege says. "We are selling value in most cases, but value based on cost to operate. Lower cost up front, less expensive to operate over time and higher performance to boot."

But will value be enough? Cisco has more than 70 percent of the market and says, no matter how individual boxes line-up, its ace in the hole is low total cost of ownership, something that is achieved with its cohesive, overarching product architecture.

To see if the value stories hold water we started by examining product cost. We culled comparative data from company web sites, Network World articles and the vendors themselves and found that in some cases – not all – switches from HP and 3Com do cost considerably less than comparable Cisco offerings, at least on a starting list price level. For instance, 3Com's S7500E and S7900E modular multilayer 10G and Gigabit switches cost US$8000 less than Cisco's Catalyst 6500.

But it is, of course, hard to do an apples-to-apples comparison. Cisco claims the Catalyst 6500 supports three times as many 10G Ethernet ports than 3Com does on the 7500E and 7900E. But 3Com claims the VSS1440 version of Cisco's Catalyst 6500, which Cisco says takes the system's switching capacity to 1.44Tbps, is mostly marketing rhetoric. "Although claiming 1400 Gbps, [it] is mostly a redundancy scheme," says Dominic Wilde, 3Com's senior director of Global Product Line Marketing for Networking Products. "It does not increase bandwidth as only one supervisor is active," he claims.

3Com also believes Cisco's Catalyst 6500, with a Supervisor 720 engine, only delivers half the throughput of the 3Com 7500 and 7900 switches for IPv4 packets.

Cisco, meanwhile, claims the 3Com switches and HP's high-end 5400 and 8212 systems line-up better with the more Catalyst 4500 – even though 3Com and HP aim their offerings squarely at the 6500. The 4500 E-series chassis ranges in price from $995 to $12,495 while bundled pricing for the 4500 is $11,000 to $18,000. Cisco says an entry level 4500 costs $200 per gigabit Power over Ethernet Plus port.

"We primarily compete with them on the 4500," says Rajiv Ramaswami, vice president and general manager for Cisco's Datacentre Switching Technology Group.

In fixed configuration devices, HP's 2910G, a Layer 2 24/48 port 10/100/1000Mbps switch goes up against Cisco's Catalyst 3650 and 3650E and actually costs almost twice as much as the Cisco switches at its lowest list, entry point price.

However, value is not based on price alone, says Zeus Kerravala, an analyst at The Yankee Group.

"There are different ways to measure value," Kerravala says. "One of the big [aspects] of the value chain for Cisco is the base of Cisco certified engineers out there [in the US]. You can actually pick up the Yellow Pages to find them. The odds of finding a 3Com or HP guy is hard."

Rob Whiteley of Forrester Research agrees. "If you have an army of [Cisco certified engineers], there's going to be a learning curve and that is the number-one reason why the ultimate TCO is a bit more of a wash. The people cost is an order of magnitude more expensive than some of those other [capital and operational] costs."

But HP says the cost of a Cisco SmartNet maintenance contract over five years could cost more than an HP ProCurve network.

“We have had customers who basically said, "I can replace my entire network with ProCurve just by the cost of a Cisco SmartNet maintenance contract," says Sreeram Krishnamachari, HP ProCurve product marketing manager.

HP and 3Com may have a better value proposition at branch office sites, where a wiring closet switch can be purchased for a reasonable price, easily deployed, and then not updated, upgraded or even thought about for the next five years, Kerravala says. Value "depends on where your focus is," he says. "It is inaccurate to say 3Com and HP have end-to-end value over Cisco in all cases. Acquisition cost is roughly 20 percent of the cost of running a network."

Other aspects – such as power consumption, TCO, operational expense and so on – also play key roles in determining the overall value of a network deployment. Both HP and 3Com say the networking consultant firm Miercom has certified their switches as 40 percent more power efficient than competitive offerings.

Vendors say customers typically use less than half of available switch features. Yet, Cisco has three software images for its Catalyst 4500 and other switches that add incremental capabilities to the switch: LAN-based, for basic functionality; IP-based for location-based features such as Smart Call Home; and enterprise services, for capabilities such as IP SLAs and VPN routing and forwarding.

The IP-based and enterprise service images take the Catalyst 4500 higher than $200 per port, Cisco says.

Whiteley says price matters far less to customers needing a laundry list of features and functions. "There is no doubt you can save money moving away from Cisco to one of these other vendors. But what a lot of companies will ask is, 'Do I want to trade-off some of the features, functions and innovations I get with Cisco?' No one has been able to answer the [Cisco] Nexus yet – not cleanly. No one has been as deep into server virtualisation and how to integrate a network architecture that supports a virtual datacentre. If you value this, who cares if you save 20 percent in the long run?"

"Value is in the eye of the beholder," says HP's Sreeram Krishnamachari. "The fact that Cisco still carries the lion's share of the market, means to me there is more value placed on the things that Cisco offers than what HP and 3Com offer. But HP's share has grown a lot [of late]. Their message around TCO and things like that have resonated."

Yankee Group's Zeus Kerravala expects HP to continue to take share from Cisco and for Cisco to respond by dropping prices. "This may be a time for customers to really benefit, based on the fact that these two companies are going to go toe-to-toe," he says. "Cisco is going to try and keep share, HP is going to try and take it. The big winner here is going to be the customer."

HP still does not have a datacentre core switch to take on Cisco's Nexus 7000. But 3Com says it does – the S 12500, which debuted earlier this year at Interop.

Cisco quotes a 15Tbps capacity for the Nexus 7000. However, 3Com says Nexus will not hit that mark for another 12 months, though 3Com's Dominic Wilde believes the S 12500 will achieve 13.3Tbps by then.

However, Cisco counters that the S 12500 is just not in the same league as the Nexus 7000. The Cisco switch was built not only for Ethernet switching, but for converging storage protocols such as Fibre Channel and optimised for "enabling and driving" virtualisation, says Cisco's Rajiv Ramaswami.

"It is specifically for datacentre convergence, which we believe our competition does not have," he says.

Cisco says the real value is in the overall system and architectural role of its switches.

"There are multi-year investments", customers are making in Cisco switches, Ramaswami says. "You are comparing platforms against point products."

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