Networking

HP’s 3Com acquisition

For $2.7 billion, Hewlett-Packard (HP) agreed to acquire 3Com Corporation — an IT networking vendor most noted for its routers, switches and security products. The announcement came at a public press conference held at 5:00 p.m. EST, November 11. HP expects to close on the deal in the first half of 2010.

Although HP missed buying Brocade, acquiring 3Com proves more compatible and powerful. For one, both vendors share a similar vision: interoperability and compatibility. In the HP to acquire 3Com conference call, HP’s 3Com acquisition was considered an accelerator to its “converged infrastructure strategy.” On the other side, the very name of 3Com (computers, communication and compatibility) echoes HP’s voice on converged infrastructure strategy.

Both vendors’ strengths also reside in Asian markets. HP’s 3Com acquisition will mean domination in China’s IT market share, a highly-valued strategic asset. (See HP-3Com acquisition hits Cisco the one place it hurts.) The shared market is seen as an upside, said Dave Donatelli, EVP and general manager of enterprise servers and networking. This is due to contrasting accounts which will further increase its position in China.

While the companies share a great deal (including offices in Marlborough and Silicon Valley), what differs is the game changer. 3Com’s portfolio has populated HP’s non-existent core networking infrastructure technology. These technologies will bring strength to its data center switching solutions.

“[3Com] broadens our entire capabilities. One of the biggest questions[/concerns] we’ve had from customers has been ‘We like your edge product, but we need you to be able to play across our entire networking infrastructure,’ and this acquisition enables us to do this — adding core switching, routing and security products to us,” said Donatelli.

In addition to 3Com’s core and edge routing, 3Com will offer its threat management, intrusion prevention and data center security solutions in what was HP’s weaker product portfolio.

With differing solutions being added to HP’s portfolio, there is hope that few layoffs will occur. However, comments across several websites (such as Twilight in the Valley of the Nerds’ HP’s 3Com acquisition post, Engadget’s HP to acquire 3Com in $2.7 billion deal story and The Metro West Daily News’ Marlborough’s 3Com to be sold $2.7B article) express fear of an addition to the rising U.S. unemployment rate.

HP-3Com acquisition hits Cisco the one place it hurts

The gloves are off in the Cisco-HP battle. HP’s move to acquire 3Com hits Cisco in one of the few places it really hurts – China.

3Com controls 32% of the Chinese networking market (with $700 million in revenue) and has held Cisco at a dead heat there – something no other networking company has been able to do in other markets. If the acquisition goes through, HP would have a tighter grasp on that market – and a more complete portfolio with which to battle Cisco globally.

“I think this is 75% about geographic market acquisition (in China in particular) and 25% about product acquisition,” said Robert Whiteley, a Forrester Research director.

On the technology front, HP’s ProCurve chief Marius Haas said the acquisition would give HP an “edge-to-data-center core” portfolio and he promised barely any overlap between the two product lines.

That, in fact, won’t likely be the case since both have extensive and similar switching lines.

A more likely scenario is that HP – which has the most successful edge switch in terms of sales – will scrap its own core switching line, replacing it with 3Com’s H3C product.

“ProCurve built its own core switch a few years back, but it wasn’t gaining a lot of traction. With 3Com they get a much more scalable switch that is a better fit for high-end datacenter and cloud networking initiatives,” Whiteley said.

3Com will also bring a router story to the table.

“ProCurve never really had routers, so the H3C assets will help here again. I don’t think this is as big a deal, since the majority of enterprise refresh is on L3 switches, which are more relevant in the datacenter, and where Cisco doesn’t have quite the stranglehold it does on router,” Whiteley said.

The companies would not say Wednesday which, if either, of the ProCurve or 3Com H3C labels would be shuttered. Either way, the core and edge networking components would obviously be coupled with HP’s data center servers, giving Cisco a run for its money on that front too.

The two companies also swung at Juniper Networks, which consistently sells its components on being more economically efficient in operating costs because they run on one joint operating system – JUNOS. 3Com’s components were also engineered in-house and therefore share one operating system, said 3Com President and COO Ron Sege said, adding that the motto on the OS is, “Learn once and support many.”

In the same breath, Sege also promised that 3Com and HP together would provide networking equipment that wouldn’t be proprietary like Cisco’s causing vendor lock-in. It’s difficult, however, to sell a portfolio on having a joint OS if users aren’t being asked to buy into a one-vendor system.

3Com also brings its Tipping Point security line to the table, which brings HP in line with Cisco and Juniper on that front.

The acquisition is pending regulatory review.

Juniper’s attack on Cisco: 2.6 terabits per second throughput + software strategy that goes beyond

In a full scale offense against Cisco, Juniper Networks unveiled an ecosystem of new hardware components, a software strategy and a super-speed chipset — as well as plans for a partnership to release blade switches. Juniper’s re-branding effort and new technology will officially launch today on the NYSE floor.

Central to the release is the software strategy that includes a revamped version of Junos OS (Junos SDK), the Junos Space application platform (with open APIs) and the Junos Pulse network client that will provide security and identity management, VPN control, and connection control.

The new strategy ultimately extends Junos from network devices to the layers of the network, enabling users to program applications into the very layers of the network, enriching services, optimization and control.

The Junos Trio chipset with so-called 3D Scaling technology will be delivered in modular line cards for Juniper MX Series, providing two to four times faster throughput than the competition — up to 2.6 terabits per second.

Beyond speed, the chipset runs on a new architecture based on a “Network Instruction Set Processor” with software on the device that can be customized for network behavior control rather than general purpose instructions, writes Tom Nolle, president of the CIMI Corporation in his Uncommon Wisdom blog. He continues:

In this respect, the chip is almost like an ASIC, but unlike an ASIC it’s programmable at the primitive NISP-instruction level, so new features can be added right down to the instruction level. It’s this architecture that accounts for the considerable improvements in performance, scalability, power efficiency, etc. that Juniper has demonstrated (through independent lab tests).

Juniper also announced a host of new partnerships that will bring it directly in competition with Cisco in the data center. The Juniper-IBM OEM will be extended, with IBM now selling Juniper’s SRX line. Under the Dell-Juniper agreement, Dell will sell Juniper’s networking equipment (it has a similar deal with Brocade) and the companies will deploy a common OS (JUNOS) and management platform.

As part of another partnership, Blade Networks will develop blade switches running on JUNOS.

Is Juniper’s brand re-launch worth the flowing whiskey and shrimp?

Ok, so Juniper spent A LOT of money unveiling its new logo Wednesday night. The networking company hung video signage over the front half of the NYSE, and took over the stock exchange floor with a gala that flowed with Johnnie Walker and shrimp.

But does the costly rebranding reflect the importance of this latest technology push? Depends on who you ask.

Juniper was still short on technology details, withholding the actual announcement until Thursday at the official launch. But executives milling about confirmed a super-powered Juniper chipset that one managed service provider at the event said would ensure huge amounts of transport to the millisecond.

That may be what Juniper is referring to with its new marketing tag: “The New Network.”

Juniper insiders also confirmed the launch of an open API network-based application platform that will enable developers to spin their own apps all running on JUNOS, Juniper’s OS that stretches across all of its networking and security products. One executive said Juniper “realized it needed a software strategy” but didn’t want to “buy other companies to make that happen.” An obvious swipe at Cisco.

If there is a data center equipment plan, it appears to come in the form of an OEM partnership which Dell announced Wednesday afternoon. As part of that agreement, Dell will sell Juniper’s networking gear (it has a similar deal with Brocade), and the companies will deploy a common OS (most likely being JUNOS) and management platform. That could position Juniper to take on Cisco in the data center, but is still not the execution of the “data center vision” it promised last winter.

“They have a ‘data center vision’, but no real plan still,” said Yankee Group analyst Zeus Kerravala, questioning where the news was behind all of the hoopla.

Kerravala also criticized Juniper for lacking a plan to deliver mobile data. Cisco bought into that strategy when it acquired Starent this month.

As for the rebranding – Juniper executives denied there was serious extravagance involved, and said it is all necessary.

“The company didn’t have a marketing bone in its body before,” said Juniper channel chief Frank Vitagliano. “This is perfect timing now that we are coming out of a bad economic time.”

So while endless appetizer shrimp + Wall Street still equal excess amid a recession to some, a top Juniper marketing executive promised the company’s brand re-launch was within the “typical marketing budget” … to which Kerravala responded, “What’s typical?”

CEO shuffle, layoffs at Extreme Networks

Extreme Networks, one of the smaller Ethernet switching vendors out there, has survived the recession so far, but its financial outlook has been dismal lately. Three weeks ago it Extreme warned Wall Street that its earnings would be down significantly for its first quarter, which ended Sept. 27. It’s expecting earnings of $66 million, down from $83.5 million a year ago.

Now Extreme has hit the restructuring button has it tries to sail through continued rough waters. CEO Mark Canepa, who’s been with Extreme since August 2006, has resigned. in order to “pursue other opportunities.” He’ll stay on board for a short time to help with the transition.

CFO Bob L. Corey has been named acting CEO as the company looks for a permanent replacement.

Extreme also laid off 70 people, about 9 percent of its workforce, in order to reduce quarterly operating expenses by $2.5 million.  This is part of an effort to make the company lean enough to break even with $70 million in quarterly revenue.

No details are available on where the layoffs came from within Extreme.

How do you manage network problem users?

When I first joined SearchNetworking.com I ran a survey asking you what the No. 1 security threat was in your industry. Your responses impressed me; even to this day I get haunted by the survey results: Across every vertical, a wild majority of networking professionals considered their own users to be their No. 1 network security threat.

Although these were findings from three years ago, the one thing that hasn’t changed on the network is that people are still on it. No matter how technology changes, your users will be there. They necessitate a network, yet break the security of it. Why? There are all sorts of reasons, some of which you can resolve.

How you ask? Our network user management guide explains. In it we highlight several problem user scenarios, from the make-it-so CEO to the Internet novice who doesn’t know the difference between the Internet and their website (yes, that was a The Website is Down reference). In these user profiles we determine their network threat level and how to mitigate their bad network behavior. But nothing could cover every user scenario. If you have a way of dealing with the 8th layer of the OSI model — people — let us know!

What’s the hoopla over at Juniper? It better be a data center strategy!

Juniper Networks is planning a huge technology announcement next week. So big that the company has invited press to a gala Wednesday night and then a day packed with a press conference in the morning and executive break-out interviews all afternoon Thursday.

The company has pre-briefed every analyst in sight and clearly plied them with drinks, money or … something … because none of them will drop the dime on the announcement either.

What is clear is this: This announcement had better be data center related. After all, last February, Juniper announced it was working on the Stratus Project – a data center initiative meant to combine storage, compute, switching and networking all on Converged Enhanced Ethernet (CEE). But the announcement included no specific product details or actual release dates.

It appeared that Stratus was a slap back at Cisco, which “leaked” news of its upcoming blade server and Cisco Unified Computing data center architecture just a month earlier.

The thing is, Cisco followed swiftly (in March) with actual product announcements and release dates.

Juniper’s non-announcement frustrated those in the networking community so much that one reader on NetworkWorld’s Cisco Subnet Blog, wrote in:

“Juniper doesn’t have anything or they would be releasing it! They got caught holding their imaginations and have no where to turn. ‘I have a super special architecture that will crush all others, will blow your mind, run all OS’s, run terabit Ethernet, and make coffee in the morning. Due out 2013.’ Give me a break, its like little children on the playground.”

That may have been a bit harsh, but it’s time for Juniper to come forth with a solid data center plan if it really wants to be competitive. Since Juniper said that Stratus was meant to be an architecture that would be built on a number of vendor partnerships in combination with its existing technology, this very cryptic Juniper press invitation does lead one to believe the hoopla is, in fact, about the data center after all.

“This will be the company’s most significant event in their 12-year history and will be hosted by Juniper’s CEO, Kevin Johnson. The company will be unveiling new hardware and software products, new partnerships and new go-to-market programs as part of the event.”

 Juniper set the stage, now it’s time to put on the show. We’ll be there to let you know if that actually happens this time around.

Oracle isn’t after Brocade, but what about Extreme?

Oracle CEO Larry Ellison dismissed the Wall Street Journal’s speculation that his company (among others) was interested in buying Brocade while speaking at the comapny’s annual shareholders meeting yesterday, according to MarketWatch’s John Letzing, IBM, HP and Juniper remain potential suitors according to the Internet rumor mill.

Meanwhile, Extreme Networks’ stock price took a relative beating on Tuesday after it lowered its earnings for its first fiscal quarter (which ended Sept. 27). Wall Street analysts were expecting Extreme to make $80.4 million but Extreme says it will be closer to $66 million. Extreme cited supply chain problems, which should scare customers. Other networking vendors have admitted to supply chain problems in the wireless LAN market, but I haven’t heard anything about wired networking supply chain problems before. Extreme said it has lost some deals and had other delayed by the problem. Are Extreme’s suppliers giving preference to larger networking vendors?

Extreme’s market capitalization is at $231 million as I write this. It would come a lot cheaper than Brocade and would offer someone like HP ProCurve a nice complementary line of data center switches.

HP or Juniper to buy Brocade?

A year ago Brocade was a buyer. Now its a seller and HP or Juniper might be buying.

Citing unnamed sources, The Wall Street Journal reported yesterday that Brocade Communications has put itself up for sale. This news comes less than a year after Brocade closed on its own acquisition of Foundry Networks, a $3-billion deal which gave the Fiber Channel storage networking market leader a broad portfolio of high-performance Ethernet switches and a variety of other data center networking products. Brocade has since inked some high profile OEM agreements with companies like IBM, creating a promising sales channel for the Ethernet products.

The Journal reported that HP and Oracle were likely suitors for Brocade. Oracle seems like a strange fit, but HP makes sense, given that Brocade’s former Foundry switches would fill a gap in HP’s ProCurve switching portfolio. ProCurve lacks a track record in high density Ethernet switches, something Foundry specialized in. The deal would also boost its storage business and give HP a much broader overall suite of data center products.

Now Journal blogger Michael Corkery speculates that Juniper might be a buyer for Brocade, too. Known more for its service provider routing business, Juniper recently rolled out its own line of enterprise Ethernet switches, but it has $2 billion in cash. A Brocade acquisition would give Juniper a much more established switching business, plus a lucrative storage networking business with deep and successful partnerships with IBM and EMC.  But Juniper’s stated switching strategy is centered around the concept of having one operating system, JUNOS, across all of its networking products. Buying Brocade would force a complete change in direction.

Cisco launches blade switch just weeks after HP ProCurve

Two weeks ago HP ProCurve launched a new line of blade switches, the 6120XG and the 6120G/XG, which plug into the same blade enclosures as HP’s BladeSystem servers. These switches were meant to replace the switches which HP OEMs from a third party, most likely Blade Network Technologies’ BNT switches.

Now Cisco has launched the Nexus 4000, a blade switch which also fits inside a blade server enclosure. Like other switches in the Nexus family, the Nexus 4000 runs the NX-OS operating system, which Cisco designed for converging LANs and storage-area networks (SANs). The switch is also designed to support converged, data center Ethernet, the pre-standard technology that will allow data centers to run server and storage traffic across the same wire.

Although the Nexus 4000 is part of Cisco’s Nexus switch family, Cisco is only selling it through OEM channels, specifically blade server vendors. These are the same server vendors that Cisco now competes against with its Unified Computing System, a line of data center technologies which includes blade servers.  It remains to be seen how enthusiastic vendors like IBM and Dell will be about selling a switch from a server competitor with their blade server systems.  I doubt HP will be interested, given that it just launched a similar product.