ProCurve builds for success

John McHugh, ProCurve VP & Worldwide general manager, talks to about taking the number two place in enterprise networking and how the company will build from there

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By  Mark Sutton Published  April 8, 2008

John McHugh ProCurve VP & Worldwide general manager talks to about taking the number two place in enterprise networking and how the company will build from there.

ProCurve has been growing well recently, what sort of position is the company in at the moment?

This is really a very exciting, high growth period for ProCurve right now. Last year was a pretty fast growing year for the industry as a whole, growing at 12-14% depending on whose numbers you use, ProCurve's growth was over 30%, which represents huge growth for us

For years we have been struggling to grow the completeness of our offering, grow credibility and awareness in the market, and I really feel that we are starting to see that. Last year was a very big year for us because we passed Nortel worldwide to become the number two player in enterprise switching equipment; we always theorized that getting into the number two spot would act as an accelerator for consideration, and it appears to be doing just that.

This is a market where significant moves and dynamics don't change from quarter to quarter, but it is clearly the right vector for us, and the Middle East is one of the hot spots for the business unit. Each of the last three years we have more than doubled the business in the region. We have also been increasing our investment at a more or less commensurate rate as we grow from a pretty light footprint in the area, to build out a complete set of resources in the major markets.

You have taken the number two slot from Nortel, what did ProCurve do to differently to manage that?

Almost nothing is different other than our size. We have expanded the completeness of the solutions that we have, we have radically increased the breadth of the offering, and growth brings a larger investment base and the ability to cover more points on the roulette table - but there is no magic in going from number eleven in 1998 to number two in 2007, just hard work, commitment, and a genuine and clear strategy for where you are going in the future. Customers love stability, security, a safe purchase - this is a set of products that they expect to be in place for seven to ten years, they want to know that you are going to be around in seven to ten years, that you will keep the product relevant, and they want to know that what they are purchasing today doesn't require them to change direction in two to three years. Philosophically the formula we have got is working very well, it is allowing us to gain market share every year, and we are going to stay on the course we are on.

Is Procurve getting the same level of recognition in the Middle East as else where?

We have in fact found that while there is traditional safe purchase criteria [in the Middle East], there are a lot of people that are very open minded, and they are looking for different value propositions, and they are willing to consider things that might not be the obvious choice, because of the potential benefits to them. If I look at the challenges I face in the Middle East versus North America, the North American market is much more challenging for us to displace existing competitors. In the Middle East if you position well and you get access to the people, help them to understand why ProCurve has been successful, they are engaging and very willing to take a risk.

Is there awareness in the local channel too?

It's similar but not as extreme. The channel is going to steer themselves pragmatically based on where their customers are going, so the channel is a little more predisposed to a conservative approach but we are not having problems finding top channel partners. The channel partners who want to dramatically change their market share and rapidly grow their business tend to look at ProCurve and say, here is the shooting star, if I want to be twice or three times the size I am in a couple of years, ProCurve is the way to do it. They are not going to see that with a vendor who is at 50-60% market share, the only direction for those folks to go is downward.

The customers that are considering you as opposed to other vendors, what sort of conversation are you having with them to convince them to choose ProCurve?

Going forward it is about how well we can sit across the table from someone who is mostly satisfied [with another vendor] and convince them that there is a compelling reason why they should change.

You first have to meet the standards for whatever they perceive their business challenges to be, you've got to have the capabilities they need, and they have to believe in your vision, and that you are investing enough in R&D.

The second standard is more about how they run their business - am I going to have to hire more staff, or can I free up bandwidth if I buy your equipment; will it be easier to support or more difficult; what are you going to do to simplify my business model? This is the point in the process where people say the space is commoditizing - this space is not commoditizing - there are a lot of economies that are happening within this space, and the customers are using those economies to embrace more and more advanced features, converge more and more functionality into a common architecture, but nevertheless it is anything but commoditized.

The very last phase of the cycle is the customer will say I can see that there are some compelling reasons but you need to make sure that I recognize some value at the onset. ProCurve is getting to that final stage of the discussion because we have addressed the issue of a compelling vision - that is a hard job to accomplish, and the more you stay at this and demonstrate success, the more you are considered applicable for the final round of consideration.

Are you taking a significant percentage of deals in the final sales cycle, or are you there so the customer can gain leverage with Cisco?

In the past four years, where I have really engaged with a large number of larger and larger strategic buy cycles, I can only think of two, out of literally hundreds, who really used us a stalking horse - put us in there to create a value change. When we are in that last cycle I think we are being considered in 98% of the deals. We win about half of the ones where we are in the final cycle. Nobody who is currently using Cisco made that choice because of price, and you are not going to displace Cisco because of price, there are more important things than 10-15% price difference.

What is on your roadmap for the rest of the year?

We have already introduced a new round of mid-range stackable switches, the 2610 family. W e try to create regular updates to major segments of our offering so they maintain our competitiveness in functionality, performance, power management and other things that are important to customer value. We also updated the firmware for our intelligent edge products, our most advanced access layer products. One of the things that is unique and compelling about ProCurve is we add new software capabilities to the products customers have already bought, there is no software subscription, no need to pay for the upgrade; anybody who buys the product gets a lifetime guarantee for hardware and gets a lifetime software subscription. This is not a couple of bug fixes, we added IPV6 across the top end of our product family. ProCurve is not a hand in your pocket for the rest of your life, you make a commitment to us and we continue to expand on what we gave you.

Customers should expect to see us continuing to broaden the offering we have in security, and I also expect we will do some expansion of our mobility offering this year.

Do you have any further plans for the Middle East?

My best guess is we will probably double our staff and investment in most of the countries in the Middle East this year. That is consistent with the growth rate that we have seen in the past. We got serious about staffing here two to three years ago, our business model is about moving forward when we feel we are ready - when we enter a region we make a pretty heavy commitment, and expand that investment rapidly.

Are you building a base of engineers skilled in ProCurve solutions to support that?

ProCurve makes investments in the region as we grow out the business, and training and awareness is one of the major foundational elements of that. If you look at the different countries in the region we have either already identified and ramped up our training partners, or we are investing in education partners and potential customers, and in colleges and universities across the region, just to bring up the knowledge base among the local population.

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