Market: Data Center Technology, Enterprise Networking
Report Date: June 19, 2012
Current Threat Index
Enterprise Networking and Data Center
Rating Update Summary
It is clear that HP’s acquisition of 3Com has yielded benefits for the company, including market share, portfolio breadth, and industry reach. HP had been quiet until Q2 2012, however, when it launched both virtual application networks (VANs) and a headline partnership with F5.
Hewlett-Packard’s strategy for data centers, and IT in general, is to offer a one-stop shop. HP alone encompasses Ethernet networking, servers, storage, services, and the management necessary to run them all together, all from their own price list. Hewlett-Packard is positioned to continue to take advantage of the wave of automation the fully virtualized data center demands, especially since the integration of 3Com. One of HP’s strategies is to provide value to the customer via simplicity of management and increased business agility, while reducing their cost of ownership. With increasing alignment across the key technologies that data centers require, HP is focusing on influencing the market while demonstrating leadership as enterprises address their cloud needs and the enterprise infrastructure of tomorrow. HP’s strategy remains sound, though where infrastructure ranks relative to the many other investments for which President and CEO Meg Whitman is now responsible will require a couple of quarters to clarify.
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Data Center Technology,
Solutions/Products: Very Threatening
Hewlett-Packard’s product lines are many and varied, but they all share the same characteristics of ease of use and often a reasonable price. HP spends considerable money on research and development, some of it product-directed and some of it component-directed, though less than its peers by percent of revenue. Paired with its strong R&D, HP’s occasional acquisition (or even the much larger purchase of EDS) keeps the company’s product lines competitive. In addition to that, HP has a large software division that covers everything from systems management to security platforms.
The services organization, bolstered by the acquisition of EDS, is one of the largest in the world and capable of handling any IT task a customer may need.
Marketing Strategy: Very Threatening
Hewlett-Packard’s marketing strategy essentially focuses around solving problems, from consumer to full-blown enterprise. HP’s approach appeals to customers, as its messaging generally sticks to solving problems once you get past the hyperbole. HP also accents its depth of product line as a differentiator, in addition to a truly global presence. With products that meet nearly every IT need a customer faces today, solving problems faced around the globe, and with the ability to sell in every major market in the world, HP is a very well-known brand.
Sales and Support: Very Threatening
HP uses channel partners and resellers to sell the vast majority of its products and services, with the exception of customers that require direct touch at the top of the enterprise spectrum. HP’s network of dealers and affiliated resellers is huge, and many of these partners have been selling
HP’s equipment for decades. HP offers numerous levels in which channel and reseller partners can participate. These include training, both sales and technical, as well as co-marketing funds for the upper levels. HP’s channel support and management program is one of the strongest and broadest in the industry, which benefits every business unit within HP.
Partnerships: Very Threatening
HP is often the