HP ProCurve Growth Accelerates at Nearly Four Times Industry Rate

PALO ALTO, Calif., May 27, 2008 – HP ProCurve experienced year-over-year port growth for the first calendar quarter of 2008 that nearly quadrupled the growth rate of the networking industry, according to data from a quarterly report by market research firm Dell’Oro Group.(1)

According to the analyst firm’s data, ProCurve, the world’s second largest enterprise LAN networking vendor, grew worldwide port shipments by 28.4 percent in the first calendar quarter of 2008 compared to the same period in 2007. The industry growth rate for this same period was 7.82 percent.

“In the face of a challenging global economy, ProCurve’s impressive growth is based on the ability to provide customers with choice to handle their most difficult deployments, from small offices to global enterprises,” said Mark Thompson, HP ProCurve global director of sales and marketing. “This growth reflects a dramatic increase in the number of customers who are reconsidering their alternatives and looking to ProCurve for flexibility to quickly meet the changing needs of users, applications and organizations.”

Comparing quarter-over-quarter regional port growth in total switched Layer 2 through Layer 7, ProCurve’s port shipments in Asia Pacific grew by 52.4 percent versus an Asian market that declined 5.1 percent. In North America, ProCurve shipments grew at 10.4 percent in a market that declined by 11.8 percent. ProCurve port shipments in Europe, the Middle East and Africa grew at 14.0 percent in a market that declined 1.0 percent.

In addition, according to Dell’Oro Group data ProCurve’s Power over Ethernet (PoE) worldwide shipments grew 68.4 percent year over year compared to market growth of 26.0 percent. This data sustains ProCurve in the No. 2 industry position in PoE.

In Layer 2 and Layer 3 total Gigabit port shipments, ProCurve quarter-over-quarter growth was 20.8 percent in a market that declined 2.0 percent. Dell’Oro Group data places ProCurve as the No. 2 overall Gigabit networking vendor.

In the Web managed Gigabit segment category, ProCurve grew at a 60.6 percent rate, in contrast with quarter over quarter industry growth of 12.7 percent, boosting ProCurve Small Business Networking switches to the No. 2 position in this segment with a 21.5 market share.

HP buys EDS for $13.9 billion

Credit: NetworkWorld.com

HP said Tuesday morning that it has signed a deal to acquire IT outsourcer EDS for $13.9 billion, or $25.00 per share.

The deal has been approved by both companies' boards of directors, and is expected to close in the second half of this year.

HP said it will more than double its services revenue.

The deal will greatly expand HP's IT services business and catapult it to the number two spot close behind IBM, whose Global Technology Services division has long been a strong profit generator for the company.

"I see [the acquisition] as an attempt by HP to really go head to head with IBM in a much more meaningful way, especially in technology services and IT outsourcing," Dana Stifler, research director with AMR Research, said Monday, while the two companies were still in talks.

The worldwide market for IT services was worth $748 billion in 2007, an increase of 10.5 percent from the year before, according to recent figures from Gartner. IBM led the market with about $54 billion in revenue, followed by EDS with $22 billion. HP was in fifth place with revenue of $17 billion, behind Accenture and Fujitsu.

Buying EDS will grow HP's services business and allow it to offer a wider range of services to attract large business customers. EDS is strong in infrastructure management services and also custom application services, where it helps companies to design, integrate and manage applications.

EDS is less strong in providing services for packaged applications, however, and the acquisition will not give HP a big lift in the type of business consulting services delivered to line managers and business executives either, Stiffler said Monday.

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