John McHugh is the vice president and general manager of HPs
ProCurve Networking, with an additional charge of R&D. Under his leadership,
ProCurve has risen from #11 in the networking market to the #2 position, based
on worldwide port shipments. Responsible for ProCurves global operations,
strategic and tactical planning, and business development, he also oversees the
development and introduction of a continuous stream of enterprise networking
products worldwide. McHugh, who joined HP in 1982 in a manufacturing support
role for data communication products, and has spent the last twenty years
focused on the networking business, was instrumental in introducing ProCurve
Adaptive EDGE Architecture. In an interview with Dataquest, McHugh talks about
Procurves India strategy, why it made a late entry, and other issues.
Why was ProCurve a late entrant in the Indian market?
HP has been there in the enterprise networking space since 1988. HP was
involved in many innovations around several networking products. If HP wants to
be in the space, we have to stop acting like an IT solution provider and start
acting like a networking company. It was in the late 1990s, we were not even
among the top 10, and we made a decision to focus on markets where we had a
critical mass. At that point of time, we exited from Asia, including Japan,
China, Singapore, and India. We had a very small presence in India at the time
of our exit.
Things started to look up for ProCurve in 2001-02. We were
growing much faster than the market and acceptance among customers was more. In
Europe, our market share was about 20%. Then we started to invest systematically
in Asia, beginning with China, Japan, and Australia. We also did some
exploratory work on India at that point in time.
In 2005, we decided that we would start ramping up our
operations and systematically invest in India. 2006 was the year when we
achieved critical mass. We are planning to double our investment and increase
the volume of business.
|John McHugh, VP & GM, ProCurve|
What is ProCurves relationship with HP? Do you participate in
outsourcing contracts that HP gets from large enterprises?
We are like any other business unit of HP, and there is no preferential
treatment. We work independently, but we would also like the market to know that
we are part of HP. It looks like a standalone company because it operates in a
close-knit environment. We want to show our commitment to networking and we are
here for a long term. As far as participating in a contract with HP is
concerned, that is not our primary strategy. But, some of HPs largest
accounts are also ProCurves networking customers. Our strategic sales is done
by a dedicated team that interacts directly with customers.
What kind of an R&D team does ProCurve have in India?
Our R&D team in India has around eighty people. Here we have centers of
expertise as well as product ownership, apart from protocol expertise in various
areas of networking. We had an R&D center here for a couple of years, and
have been dramatically increasing our sales and go-to-market investments.
What is your competition strategy, considering 80% of Indias
networking products market is dominated by companies like Cisco, D-Link, 3-Com
We believe that we will be number three in the coming 2-3 years. I break the
market into two parts. There is Cisco, Foundry, Extreme, and Nortel, and there
is D-Link, 3Com, and Netgear. In our experience around the world and in India,
these companies do not directly compete with us very much. We position ourselves
entirely against the first group and that is where all of our business happens
on a regular basis.
In terms of how we will move, as our customers understand what
we bring to the market, we will very rapidly move second to Cisco in the first
set of companies. The message we give to our customers is that we are investing
heavily in R&D. The investment is close to $100 mn, which is second only to
Cisco in this market place.
This R&D is in some of the most advanced areas of technology
whether it is security, access management, intrusion protection, mobility, and
convergence solutions to routing and core and edge networking. The R&D is
based on the ease of use, integrated robust design, and open standards, multi
What is your focus market segment in India?
We break the enterprise customers into early adopters and commodity
purchasers. We are focused on the mid-market. In terms of verticals, we are
strong in government, education, manufacturing with a good presence in
hospitality and finance.
Do you also work with telecom service providers in India to
bundle networking products?
We have not really gone through the service providers yet in India.
What kind of a support infrastructure do you have in India?
HP Services supports us on this. We provide unconditional lifetime warranty
on all our products with onsite warranty.