HP floats cloud-managed Wi-Fi offering for campus unified wired/wireless network access
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1 HP floats cloud-managed Wi-Fi offering for campus unified wired/wireless network access Analyst: Christian Renaud 17 Apr, 2014 At Interop Las Vegas, Hewlett-Packard announced products for both on-premises unified wired/wireless access and its own cloud-managed wireless service and access points. Cloud-managed wireless and wired networks have gained momentum due to early adoption of Cisco Meraki and Aruba Central, and the new service offering gains HP a seat at the table for this growing market segment. The 451 Take HP's announcements are important on two fronts: cloud-managed infrastructure and campus unified (wired and wireless) integration in the closet. The first is rapidly becoming table stakes for access vendors, and HP's strong presence in access switching mandated a response to Cisco and Aruba cloud-managed services. The second front has become problematic for access vendors seeking to displace the incumbent because Cisco has leveraged its dominant footprint in access switching to 'Trojan horse' Wi-Fi controllers in 'open' Catalyst switch slots, avoiding potential competitive RFP situations. Overall, the announcements are strong steps by HP and will help cement its position as a strong access networking player. Context At the spring Interop conference in Las Vegas, HP introduced new offerings for both wired and wireless network access. The first is a combination of a new cloud-managed network service, Cloud Copyright The 451 Group 1
2 Network Manager, and three new cloud-managed n/ac access points designed to work with the new service. The second is an assortment of on-premises Wi-Fi-enabled switches and.11ac access points. The company also formally shipped two software-defined networking (SDN) applications it had previously highlighted while in beta that interact with the company's OpenFlow controller: the first for Microsoft Lync traffic prioritization; and a rebranded Sentinel security SDN application, now named HP Network Protector, that leverages TippingPoint security intelligence. The final announcement at Interop was for a new Wi-Fi location-positioning application that also leverages the company's OpenFlow controller. This is a considerable amount of product and technology squeezed into a single announcement, and we break it down into two buckets: cloud-managed network services and campus unified access. The cloud-managed service offering was a missing piece of HP's portfolio when competing with Cisco for access deals because Cisco could sell its traditional Aironet (now CMX) on-premises products in traditional deals or could position its Meraki cloud-managed service for customer environments like retail or remote branch offices. Although it is possible to remotely administer multiple branches or retail stores from a 'headquarters' location, the Meraki (and Aruba Central) model of centrally provisioning and configuring policy from a Web-based cloud controller has begun to slowly displace on-premises management tools. HP is slightly behind in not offering administration of wired switches and security (firewall) devices from the service as well, although intimated that this functionality is on the near-term roadmap. The campus unified access announcements come from a similar demand. Cisco had, some time back, begun to integrate Wi-Fi controller functionality into an interface card in existing Catalyst Ethernet switches. This had multiple benefits (rack space, price point, management) but primarily served Cisco in eliminating a potential competitive purchasing decision that could have opened the door to HP and Aruba wireless technology. HP is following a similar playbook in its integration of controller blades into its campus wiring closet offerings, selling to network managers that they are simply using available capacity in existing equipment and do not have to engage in a competitive RFP situation. Company HP is a longtime technology company and provides products for consumers, enterprises and service providers. In networking, the company claims to be number two behind Cisco and ahead of Dell, with products ranging from campus Wi-Fi to wired switches, and a new Network Functions Virtualization business unit led by networking GM and SVP Bethany Mayer, targeting the large carrier networking market transition just beginning. The company also bet heavily on the promise Copyright The 451 Group 2
3 of OpenFlow, which it has been actively involved with since its genesis, and the potential for the controller-driven architecture to disrupt the networking market and open opportunities for HP. It developed its own controller, OpenFlow-enabled the majority of its switching portfolio, and built an application store for SDN applications. With NEC, the company has been one of the larger and more vocal advocates for the revolutionary approach to designing networks. Products The announcements included three access points to be used in conjunction with the Cloud Network Manager service: the 365 (3: ac/n), the 355 (3: n) and the 350 (2x n). The company did imply during the launch that the Cloud Network Manager will support wired switches in the near future. The ac non-cloud access point that was announced, to be used in conjunction with the announced 850 and 870 wired/wireless controllers, is the 560. The 850/870 are also on the roadmap to work in tandem with the HP value-added SDN controller next year, making the 560 the first OpenFlow Wi-Fi access point announcement we have heard to date. The company also announced an ac 'Unified Wall Jack,' an intriguing product category that bundles wired switches and a low-power Wi-Fi access point, packaged into a wall-plate form factor for hospitality and education environments, and powered over Ethernet (PoE+). The final aspect of the launch is one of management. The new on-premises offerings are managed via the HP Intelligent Management Center, whereas the cloud-managed offerings are managed via the Cloud Network Manager service. For larger enterprises with many branches, this could create two management systems, one for cloud-managed branches and one for on-premises devices. The market for cloud-management is growing rapidly, so this may resolve itself over time if the majority of network service management shifts to being provided via the cloud, but it could create islands of management during the transition. Marketing The new products will be sold through HP's large and capable channel sales organization, but they highlight a new wrinkle introduced by cloud-managed services. In the case of both the on-premises and cloud-managed offerings, the products and subscriptions will be sold using the traditional MSRP-distributor cost model that leaves margin for reseller partners. The Cloud Network Manager will create a small annuity revenue stream in contrast to the larger payday for the channel when selling an on-premises controller. HP has wisely avoided bypassing the channel altogether and competing against it with a direct cloud-managed offering and, instead, opted for a 'channel Copyright The 451 Group 3
4 fulfilled but HP branded' service; however, the diminished up-front margin per deal will undoubtedly create a barrier to sales for coin-operated resellers. Competition HP's primary competitor for access is Cisco, which introduced a new wired/wireless ASIC, the UADP, in January The UADP integrates the wired and wireless controller fabrics into a single chip, resulting in lower component costs and simplified user-access administration. HP hasn't pursued this unified-chip strategy, opting instead for systems-level integration of Wi-Fi controller functionality into existing switch hardware to form the basis of the new appliances. Aruba and Dell don't offer integrated devices with embedded controllers in a switch but, rather, emphasize the single point of unified user administration across multiple wired and wireless devices. SWOT Analysis Strengths Weaknesses HP has a very large footprint in SMB and enterprise and has a strong channel presence that is familiar with its programs and products. Opportunities Threats HP now has the opportunity to upgrade its existing large (wired) user base to the new unified wired/wireless products, avoiding competitive insertion points and increasing its revenue per customer. HP is showing up halfway through the game for cloud-managed Wi-Fi, following Aruba, Cisco and others. The company will need to provide differentiated messaging to its partners to equip them to compete toe-to-toe with Cisco Meraki in a market already well under way. The shift to cloud-managed networks from on-premises networks could potentially disintermediate and alienate the channel partners that HP relies on so heavily. The transition will need to be managed very carefully to avoid losing further ground to competitors that were earlier to market. Copyright The 451 Group 4
5 Reproduced by permission of The 451 Group; This report was originally published within 451 Research's Market Insight Service. For additional information on 451 Research or to apply for trial access, go to: Copyright The 451 Group 5
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