H-P Amps Up Cisco Sales Rivalry, Offering Big Discounts on Switches
The rivalry between HP and Cisco has taken a new level this year. This happened after HP branched into networking, the market that Cisco dominates. Not only that but also Cisco started selling servers, the computers that power corporate data centers, the market that HP dominates. Hp started into networking by offering 20% off the list price of certain switching systems if they shift away from comparable gear sold by networking rival, Cisco. HP promises networking gear that is easier to manage, more secure and cheaper than Cisco's. HP also disclosed its $2.7 billion dollar aquistion of 3Com, expanding its prescence in the Cisco-led networking market. Cisco still believes that their quality and innovation are the key factors that will make them lead this market. It is true since Cisco invests over 10% of its total revenue in the R&D department. Even though HP bought 3Com, Cisco is still leading in the Ethernet switching market up to 70% of the market share in the third quarter from 67% in the same period last year, while HP held 11% of the market share, the same amount it and 3Com held combined last year.
I think that Cisco will dominate the networking market due to the quality, innovation, and consistency of the products they offer. Even though HP proposed an excellent offer, it still fails against what Cisco has to offer. The numbers show that HP's networking gear is inferior to Cisco's because what HP invests in R&D doesn't exceed 3%.
i also agree about Munther's statement that Cisco will obviously exceed HP since they are native to the field of networking, and have years worth of experience whereas HP is still in it's infancy. furthermore the amount that Cisco is investing in R&D is far greater then HP's amount, which further shows Cisco's advancement on HP.
ReplyDelete