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Is HP Too Big to Succeed?

I immediately recalled a Wall Street Journal article from the 1980s about IBM being on a one way track to the junkyard

HP recently announced a massive round of layoffs and at the recent FIRE X conference I was asked what I thought HP might be thinking.  Perhaps HP had become too big to succeed, according to one of the FIRE X futurists on the lawn overlooking the ocean at the Montage Laguna Beach.

I immediately recalled a Wall Street Journal article from the 1980s about IBM being on a one way track to the junkyard, only to witness an incredible turnaround, thanks at least in part to a new CEO.

Then I mentioned a recent announcement (HP’s OpenFlow announcement) and the implications for the networking industry.  We both paused because the layoffs freed up a sizable ($3+ billion annually) amount of cash that could perhaps be put to work in turning HP into a more growth-oriented company.  IBM moved into services, as you might recall, while many other computer mainframe players became even smaller shadows of their former selves.

With their recent OpenFlow announcement at Interop HP had demonstrated that they knew how to position themselves for the shift to Software Defined Networking.  The question is, can they make the shift?

HP has not been known as a marketing powerhouse but rather as an innovative company that has succeeded (at least in recent years) because of operational excellence.  They have been effective commoditizers.

For HP to succeed in a new category with limited core expertise they will need to recruit fresh networking talent, solutions and customers who could give them footprints for product testing and development.  Then there is the marketing question:  does HP have the marketing chops to build and lead a category which today rests outside of much of their domain expertise?  It won’t be a trivial effort.

VMware has been actively developing virtualization-centric networking capabilities and Cisco has recently spun off Insieme.   OpenFlow has recruited an array of powerful and niche players, some of whom might view HP’s “intrusion” as threatening.  A powerful handful of networking companies are also placing bets on SDN.  HP would certainly not have a category exclusive and merely executing SDN best wouldn’t likely be enough to ensure success.

Meg has her work cut out for her.  For more background read SDN May Drive a New Data Center Development Cycle, Cisco and the Networking Industry: Golden Age or Golden Fleece?, and The Cloud and the Great Data Center Race.

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More Stories By Greg Ness

Gregory Ness is the VP of Marketing of Vidder and has over 30 years of experience in marketing technology, B2B and consumer products and services. Prior to Vidder, he was VP of Marketing at cloud migration pioneer CloudVelox. Before CloudVelox he held marketing leadership positions at Vantage Data Centers, Infoblox (BLOX), BlueLane Technologies (VMW), Redline Networks (JNPR), IntruVert (INTC) and ShoreTel (SHOR). He has a BA from Reed College and an MA from The University of Texas at Austin. He has spoken on virtualization, networking, security and cloud computing topics at numerous conferences including CiscoLive, Interop and Future in Review.

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