HP switch revenues climbed during the company’s third quarter, yielding what the company thinks will be a market-share gain as Cisco’s switching sales continue to fall.
During HP’s third quarter, which ended July 31, HP Networking’s revenues were $672 million, up 4 percent compared with the same quarter a year ago. Cisco, by contrast, saw its switch revenues drop by 4 percent as it produced another quarter of non-growth.
In a side comment during yesterday’s earnings call, executives noted that HP probably gained market share in switching as a result. We won’t know if they’re right until analysts publish their market-share reports for the calendar second quarter.
HP didn’t detail why switching was up. In a note published yesterday, TBR analyst Scott Dennehy attributed it to pretty simple causes: “improved execution of its sales and partner strategies and a healthier spending environment in the U.S. and Europe.”
An extra wrinkle is that Cisco’s damage could be partly self-inflicted. The transition to the Nexus 9000 — and the Application-Centric Infrastructure (ACI) that customers are being asked to consider — might be dampening sales temporarily, wrote analyst Simon Leopold of Raymond James, in a research note issued last week.
Leopold expects Cisco’s switching business to return to year-over-year growth early in calendar 2015.
Meanwhile, in NFV
HP’s earnings call included only the briefest of updates about the NFV group, which was launched in February with Senior Vice President Bethany Mayer at the helm. During the earnings call, CEO Meg Whitman noted that HP is involved in 15 proof-of-concept (PoC) projects with carriers.
As Mayer told us in June, those PoCs do bring in revenues, albeit not much. Assuming the count of 15 refers to offically blessed ETSI PoCs, it’s a meaningful number, considering there are only 23 PoCs total, as of the most recent ETSI meeting.
HP has made progress on the applications side of NFV, but as with most companies, it could get tripped up by the complexities of management and orchestration (MANO), wrote Tom Nolle, president of CIMI Corp., in a blog entry posted yesterday.
“HP had a strong NFV story in its OpenNFV positioning, but operators still tell me that there’s not much meat to this beyond OpenStack,” Nolle writes. “IBM has a much better implementation—SmartCloud Orchestrator is a Tosca-based model for cloud MANO that could be easily converted to a complete MANO story.”
That’s a threat to HP because IBM won’t have a hardware component to NFV; that part of the business got sold to Lenovo. HP, on the other hand, has retained its server business and will undoubtedly try to find a place for it in NFV. If IBM or any other management-independent software option comes out on top, “it would make it harder for HP to link its own hardware exclusively to network and cloud opportunities,” he writes.