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
- How WAN Optimization Helps Enterprises Reduce Costs If you wanted to break down innovation into a tidy equation, it might go something like this: Technology + Connectivity = Productivity. Productivity...
- Four Little-Known Ways WAN Optimization Can Benefit Your Organization WAN optimization has evolved into a complete system that optimizes traffic across a broad range of most popular applications while providing deep visibility...
- SharePlan Security SharePlan is a continuous, secure, enterprise-ready file sync and share platform that facilitates smart, real-time collaboration across all devices.
- Three Ways Your DNS Can Impact DDoS Attacks Domain Name System (DNS) plays a big role in consumers' day-to-day Internet usage and is a critical factor when it comes to distributed...
- Online Video and Web Traffic: Sochi 2014 Winter Olympic Games Over 25 leading global broadcasters worked with Akamai to deliver the action, excitement and inspiration of Sochi because they understand online viewers expect...
- Video surveillance for IT: maximum image quality, minimum bandwidth Join us on Thursday, May 8th at 1 p.m. EST when Willem Ryan, Senior Product Marketing Manager at Avigilon, will discuss how IT... All Networking White Papers | Webcasts