Feeds

Cisco to counter HP with Chinese expansion

Claims little trouble in big China

The essential guide to IT transformation

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." ®

Boost IT visibility and business value

More from The Register

next story
Pay to play: The hidden cost of software defined everything
Enter credit card details if you want that system you bought to actually be useful
HP busts out new ProLiant Gen9 servers
Think those are cool? Wait till you get a load of our racks
Shoot-em-up: Sony Online Entertainment hit by 'large scale DDoS attack'
Games disrupted as firm struggles to control network
Community chest: Storage firms need to pay open-source debts
Samba implementation? Time to get some devs on the job
Silicon Valley jolted by magnitude 6.1 quake – its biggest in 25 years
Did the earth move for you at VMworld – oh, OK. It just did. A lot
Forrester says it's time to give up on physical storage arrays
The physical/virtual storage tipping point may just have arrived
prev story

Whitepapers

Top 10 endpoint backup mistakes
Avoid the ten endpoint backup mistakes to ensure that your critical corporate data is protected and end user productivity is improved.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Backing up distributed data
Eliminating the redundant use of bandwidth and storage capacity and application consolidation in the modern data center.
The essential guide to IT transformation
ServiceNow discusses three IT transformations that can help CIOs automate IT services to transform IT and the enterprise
Next gen security for virtualised datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.