HP, telcos look to sell LANs on pay-per-use basis
Instead of over provisioning networks, HP's new program allows enterprises to only pay for the ports they use
IDG News Service - Hewlett-Packard will allow enterprises to pay for managed LAN offerings based on usage, in much the same way they pay for cloud services, through a partnership with telecom service providers.
HP's FlexNetwork Utility Advantage Program will allow enterprises to pay a monthly fee for their networking equipment, based on the number of ports used, for example.
Until now, enterprises have had to make big upfront investments or lease the equipment such as switches, and buy networking hardware based on expected future demands, which has often resulted in over provisioning.
On average, only 60% of the capacity of networking equipment installed in an enterprise LAN is used, according to Mike Banic, vice president of marketing at HP Networking.
The FlexNetwork Utility Advantage Program will be available worldwide through authorized operators and cover both wired and wireless networks.
The first operator to get onboard is Swisscom, which is offering HP's switches for $6.50 a month per Gigabit Ethernet port, according to Oliver Spring, head of product line management at Swisscom.
So far, Swisscom is only selling switches for wired networks, but the plan is to launch a wireless offering next year. The operator still hasn't decided how it will charge for that, Spring said.
Options include something as simple as charging per user, in an effort to make it as easy to understand as possible, according to Matt Greenly, vice president, finance at HP Networking.
HP is currently in discussions with several other operators, but isn't ready to announce any other partners besides Swisscom.
"We are looking at limiting it to a few partners in each region ... We want to make sure we don't cause conflicts," Greenly said.
HP is also hoping the change will allow more enterprises to upgrade their networks, which, like other internal IT investments, have been affected by the economic downturn.
During the third quarter, enterprises spent less on lower-speed Ethernet switches that are typically used to connect users, according to recent report from Dell'Oro Group. However, spending on higher-speed switches used to connect hardware in the data center remained quite robust, it said.
At the same time, the wireless LAN market posted record revenues in the third quarter, thanks to 19% revenue growth over the same period last year, Dell'Oro said.
HP is convinced that as more applications are moved to the cloud, hardware vendors increasingly have to adopt the same pricing model, and it wants to be at the forefront of that trend.
Send news tips and comments to firstname.lastname@example.org
- Virtually Delivered High Performance 3D Graphics "A picture is worth a thousand words." That old phrase is as true today as it ever was. Pictures (i.e., those with heavy...
- Who does NSS Labs "Recommend" for NGFW? In 2012, NSS Labs found that most available NGFW solutions "fell short in performance and security effectiveness." In 2013 NSS Labs noted "marked...
- CIOs Deliver Productivity Breakthroughs with Intelligent Digital Signage Retailers have long recognized the influence that digital signage provides over a shopper's point-of-purchase decision making process.
- Improving Business Value of WAN Optimization Want to achieve faster ROI with WAN optimization? Read the latest IDC report and discover how you can cut IT costs without compromising...
- Live Webcast IBM FlashSystem V840: Leveraging Software-Defined Flash to Drive Your Business With end-to-end, tightly integrated functionality and super-fast flash technology, products like IBM FlashSystem V840 Enterprise Performance Solution empower businesses to leverage the efficiency...
- What should I look for in a Next Generation Firewall? SANS Provides Guidance With so many vendors claiming to have a Next Generation Firewall (NGFW), it can be difficult to tell what makes each one different....
- IBM FlashSystem V840: Leveraging Software-Defined Flash to Drive Your Business With end-to-end, tightly integrated functionality and super-fast flash technology, products like IBM FlashSystem V840 Enterprise Performance Solution empower businesses to leverage the efficiency... All Networking White Papers | Webcasts
Our new bimonthly Internet of Things newsletter helps you keep pace with the rapidly evolving technologies, trends and developments related to the IoT. Subscribe now and stay up to date!