Feeds

Cisco to counter HP with Chinese expansion

Claims little trouble in big China

Securing Web Applications Made Simple and Scalable

Cisco has vowed to step up its presence in China as a counter measure in its newfound rivalry with HP.

Once close partners, the two companies became mortal foes this year by striking each other where it hurts most: their core markets. Cisco whacked HP first by launching its own line of blade servers. HP answered the slight this November by announcing it would purchase network equipment vendor 3Com.

While 3Com's reach is relatively small compared to the all-consuming Cisco, it does have a major presence in China. And China is one of the most promising markets out there for selling massive swaths of networking kit.

"I think you will see us continue to expand our focus on China and develop very good relationships there," Cisco CEO John Chambers said on Tuesday during an analyst day at the company's San Jose headquarters. "I've been doing business there for over 20 years, but I think it's time to take it up one more level."

Of course, you won't hear Chambers publicly admit such move is a direct response to HP. He and his underlings like to say that Cisco doesn't base its decisions on what its competition is doing. But there does seem to be an awful lot of happy coincidences.

Later that day, Chambers continued with his thoughts on investing in China: "The fact that I've indicated 'stay tuned because you're going to see us continue to commit both resources and talent in China' means we're very comfortable with our ability to compete there." He then noted that Cisco only has a meaningful presence in about 12 Chinese cities at present and will first decide who its partners will be for the expansion and what specific channels to pursue.

Still, Chambers clearly has a healthy paranoia about future rivalries that will come from China — 3Comian or otherwise.

"Our competitors in the future are going to be from China, we know that," he said. "They'll come at us with dramatically lower price." But Chambers claims that like other market battles, Cisco won't respond with lower prices itself. He said that innovation combined with keen operational execution and a unified vision are the selling points it will stand on.

"You'll notice we normally don't enter a market where stand-alone price is the issue," Chambers said. "We enter architectural plays."

He argues that most of its major customers are looking for a wide-ranging solution rather than the price of an individual box. Unless, of course, a potential customer makes a stink about it.

"If someone is making a decision on a stand-alone box, then price perhaps is the key issue. And we will be competitive where appropriate there." ®

The Essential Guide to IT Transformation

More from The Register

next story
Manic malware Mayhem spreads through Linux, FreeBSD web servers
And how Google could cripple infection rate in a second
EU's top data cops to meet Google, Microsoft et al over 'right to be forgotten'
Plan to hammer out 'coherent' guidelines. Good luck chaps!
US judge: YES, cops or feds so can slurp an ENTIRE Gmail account
Crooks don't have folders labelled 'drug records', opines NY beak
FLAPE – the next BIG THING in storage
Find cold data with flash, transmit it from tape
Seagate chances ARM with NAS boxes for the SOHO crowd
There's an Atom-powered offering, too
Intel teaches Oracle how to become the latest and greatest Xeon Whisperer
E7-8895 v2 chips are best of the bunch, and with firmware-unlocked speed control
prev story

Whitepapers

Top three mobile application threats
Prevent sensitive data leakage over insecure channels or stolen mobile devices.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.
Mobile application security vulnerability report
The alarming realities regarding the sheer number of applications vulnerable to attack, and the most common and easily addressable vulnerability errors.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Consolidation: the foundation for IT and business transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.