DUBAI, 30 October 2007 — Back in August, a report by market research firm Dell’Oro Group found that ProCurve Networking by HP experienced year-over-year port growth for the second calendar quarter of 2007 at more than double the industry growth rate. The ProCurve Networking business unit of HP delivers wired and wireless enterprise networking products, services and solutions.
According to the analyst firm’s data, ProCurve, the world’s second largest enterprise LAN networking vendor, grew worldwide port shipments by 46 percent in the second calendar quarter of 2007, compared to the same period in 2006. The year-over-year industry growth rate for this period was 21 percent.
The report came as no surprise to John McHugh, Vice President and General Manager for ProCurve Networking by HP. Under his leadership, ProCurve has risen from No. 11 in the networking marketplace to the current No. 2 position. McHugh is responsible for ProCurve’s global operations, strategic and tactical planning, business development and the creation and introduction of a continuous stream of enterprise networking solutions and services.
“ProCurve’s continual market growth and leadership is a direct correlation to the expansion of our enterprise-class products and solutions, and customers embracing our Adaptive Networks vision,” said McHugh.
McHugh has explained in detail what HP ProCurve’s Adaptive Network’s vision is at http://www.hp.com/rnd/vision/. The bottom line is that adaptive networks are those that deliver high-performance, no-compromise functionality at affordable prices within a cohesive, flexible network infrastructure that is highly secure and available. Adaptive Networks must be:
• Adaptive to users — Offering personalization and access control with reduced complexity.
• Adaptive to applications — With intelligence embedded to enable and optimize applications now and in the future.
• Adaptive to organizations — Open and responsive to change so the organization can focus on goals not technology.
That sounds like a lot to hope for from a network, but it’s what McHugh and his team are delivering, and it’s the reason for ProCurve’s success. With only Cisco now standing between ProCurve and first place in the industry, the company has begun to ratchet up the pressure on its rival by expanding geographically and actively showing Cisco customers what HP ProCurve can do for them.
A shortage of network technicians in the market, combined with companies desperate to bring the spiraling costs of IT under control, has made words such as simple, affordable and intuitive, very attractive to the business community.
“We understand that IT is really vexing and complicated to people,” said McHugh. “There’s this question about the level of technical expertise that’s available in any market. One of the benefits that ProCurve has and one of the reasons that ProCurve is growing faster than the market in general, is that we come at the market with a belief that technology shouldn’t be complex. There’s an old phrase in our business that ‘There’s margin in mystery.’ This means that the more technical and complex you can make it, the more people will pay you for it. Frankly, we like to debunk that.”
McHugh thinks that the trend in creating ever more complex networks, that need technicians re-certified annually to keep them running, is “crazy.”
“When I look at what some of our competitors are doing, it’s almost like an opium addiction. It is as though by creating more and more complicated and more difficult to support solutions, that you make a demand for these very highly trained, very regularly certified — at a great cost to the companies who have to have them — technicians, and it’s a never-ending cycle,” he explained. “Then those people know that their jobs will be in jeopardy if they don’t keep buying more and more complicated network equipment and, of course, somebody’s there to supply it. ProCurve is not a big believer in that. We really believe in demystifying this stuff and showing how simple it can be if it is well engineered and based on open standards. If you really, really push interoperability, things go together more straightforward. Then, build management utilities that jump out at you with how straightforward they are to do, rather than with management utilities that just reinforce complexity. I think we really live that value proposition in all the things we’re doing.”
Living the value proposition is a continuing challenge for McHugh, since for the last decade, ProCurve has been offering a Lifetime Warranty on all its products. This means that ProCurve must bring high quality into its engineering and manufacturing to maintain profitability. The ProCurve warranty is very simple. If the product fails, call HP ProCurve and a spare will be shipped immediately — forever.
Another reason that ProCurve products are gaining increasing acceptance globally, is the quality of McHugh’s team. Engineers in ProCurve’s R&D organization have on average 10 years of service. For most of ProCurve’s competitors in the networking space, the average is less than four years.
“I’ve got an organization of nearly a hundred people in India,” said McHugh. “India has issues with high turnover, salaries are going up 20 to 35 percent per year. It’s a tumultuous market but I haven’t lost a single engineer in the last 12 months in India. People who hear this just can’t believe it and it’s because we build a fundamentally different culture. Wherever ProCurve goes and establishes either a work force or a strategic relationship, we build it based on continuity, on development of long-term expertise and on long-term commitment to the business. Frankly, these are exactly the values we try to take to our customers.”
For Saudi Arabia, McHugh has committed to continuing to grow ProCurve’s Saudi team, both in terms of investment and footprint in the Kingdom. He believes that Saudi Arabia is going to continue to be ProCurve’s fastest growing country in the region and consequently ProCurve’s investment is going to be consistent with that. McHugh describes Saudi Arabia as on “the front edge” of where ProCurve is investing globally.
Global expansion is one reason ProCurve continues to grow, but the company’s ability to “convert” former Cisco customers is another big part of its success. Some executives shy away from discussing competitors, but McHugh seemed well prepared for such a conversation. He emphasized the point that while most professionals in the local IT market think that ProCurve wins against Cisco based on price, this is a misconception.
“For me, the next five to 10 years is about going in to loyal Cisco customers and helping them understand why they want to buy from ProCurve. If the first thing out of my mouth in that meeting is, ‘We’re less expensive than Cisco,’ I’m probably not going to get in many more sentences,” advised McHugh. “That customer did not choose to buy Cisco because of low cost — I can assure you of that. So when ProCurve goes in to those customers, we’ve got to sit across from them and we’ve got to explain to them what ProCurve can do better than Cisco. What we can do that Cisco can’t. What we can do in a way that for you to do it with Cisco, takes twice the staff and requires all the complexity of management, so that even getting it to work reliably is going to be challenging for even the best trained staff.”
He continued, “CERN, the world’s largest particle physics laboratory in Switzerland, is a customer that we won and converted over. To listen to them talk about the difference of experience, and how satisfied they are with what they ended up deciding, and what it meant for them before and after, is very rewarding. You can see that you are making an impact on customers and really allowing them to do the jobs they need to in a way that isn’t about a big science fair. It’s really about them being more successful as researchers, educators and business people — and not as network managers.”
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