Is ProCurve Networking's best chance of standing up to the market-leading giant Cisco to continue as a subsidiary of HP, or should it become a completely separate company?
According to John McHugh, the vice-president and general manager of ProCurve, the company itself is waiting to see what will happen.
There has been speculation about the future of ProCurve for several years. While the ProCurve division of HP is doing well in the market, many believe it could do better if it was cut free from the coat-tails of HP.
Speaking at NetEvents in Garmisch, German, last week, McHugh said that there were clear advantages to ProCurve becoming a separate company.
"If you look at the system suppliers like IBM... they left the networking business. There are clear advantages in doing that and leaving it to the specialists who are focused on the area," said McHugh.
Splitting off would help ProCurve to work with companies, such as Dell, who compete with other areas of HP's business but don't do networking. At present, they may be reluctant to deal with ProCurve as they don't want to give money to a rival.
But McHugh also argued that there was "a clear case" for remaining within HP. "The are clear advantages to ProCurve in having such a close relationship with a company that is a clear leader in so many areas of the business."
Analysts broadly agree that staying with or leaving HP is a difficult call to make.
"ProCurve could do well as a separate company," said Andy Buss, senior analyst with Canalys. "But it could do well as part of HP. The key question is: What is the top-level commitment to ProCurve at HP? ProCurve needs to make that strategic decision and to do that it needs help from HP."
Part of the answer to that lies in services, according to Buss. "If ProCurve stays at HP it will be because it can see the revenue generation from services."
There is a third option, according to Dean Bubley, analyst with Disruptive Analysis. "HP could sell the business," he said. "It is difficult to make a call between any of the possible routes. But I do think they have to do something to make the strategy clearer."
Meanwhile, McHugh must wait and see. "Mark [Hurd, HP's president and chief executive] knows my feelings on this and it is his call, but right now he has other things that need his attention," said McHugh with a smile. "We will see."
Talkback
ProCurve did NOT come from Compaq/DEC roots. ProCurve at hp predates the merger by a good decade or more.
Procurves legacy is rich with HP innovation like the concept of StarHub LAN etc.
This concept was picked up and made good by Synoptics.
Digital's network biz was neutered partially to cabletron...., most went to Cisco and some to other competitiors like 3Com (Bruce Claflin), some startups (Raj Jain), Nortel etc.,
By the time HP *merged* with Compaq, there was no networking product group left in compaq i guess.
This is the quick recall i get from my my rusted memory of being in networking field for 11 odd years.
This write up is shallow without credible facts.
HP's strong innovation in networking .....
* StarHub LAN blueprint
* 100-Base-VG LAN protocol (though it
flopped)
*VoIP software that Cisco acquired in 90's
and sold as cisco VoIP solution (i heard this
as a rumour.... not confirmed).
* Routing mechanism on switches
etc etc ........
All these during 70's, 80's and 90's.
Dear Colin,
I enjoyed reading your article about the future of ProCurve Networking in ZDNet UK. For the most part I felt your observations and assertions were sound and it was well written. I would like to clear up your understanding of one topic though. ProCurve's roots are firmly within HP. I personally have worked in networking at HP for 24 years.
HP first entered the enterprise networking equipment market in 1988 when Carolyn Ticknor retooled the Roseville Networking Division from doing I/O cards toward doing Hubs, Routers, Management and network interfaces for printers and PCs. Through the 1990's we kept essentially the same model, until we substantially changed the emphasis in 1998.
The ProCurve vision and value set was solidified at the end of 1998 when HP made the firm commitment to grow our networking investment into a competive open market networking leader. This was a fundamental shift away from doing networking simply to augment other strategies within HP. After 1998, we were doing networking to be the best in the market.
The results since that time have been dramatic. ProCurve is now three times larger in investment and revenue than it was in the year 2000 while the market has grown only ~35%. We did acquire a mobility offering in our acquisition of Compaq and core products in our acquisition of Riverstone Networking technology, but other than that, the growth has been through expanding our solutions and our customer base.
Once again, thank you for the factual characterization of my feelings about our future with or without HP, but as for the past, we will always be an HP product.
John McHugh
Vice President and Worldwide General Manager
ProCurve Networking
Hewlett-Packard Company