With the completion of the 3Com merger, HP has taken over the lead in China for some types of networking gear and positions itself against Cisco as the only competitor with similar, though not yet identical, breadth. What brings networking to the front page is that planes are downed across Europe due to the eruption of a volcano in Iceland. This grounding has stranded a massive number of people and the problem is expected to expand, putting increased pressure on telepresence systems, which in turn put increasing loads on networks. Coincidentally, Cisco today closed on the merger with Tandberg, which was HP's largest partner for telepresence.
One move creates a new large-scale, enterprise-class player in Cisco's class, and the push to video conferencing requires a change in travel behavior which, while potentially more important because it could save lives and businesses, will likely cause less actual sustainable change. Let's talk about that.
Big Impact, Little Change
3Com was the dominant networking vendor before Cisco rose to prominence end eclipsed it. HP is currently the broadest, and arguably the biggest, technology company in the world. The battle between Cisco and HP was largely defined as one between the largest specialized vendor in networking vs. the largest technology vendor in the world. These kinds of battles pitch the partnering power of the specialized firm, which is aligned with EMC, VMware, and others against the breadth of offerings from the large generalist.
Partnerships often have difficulties coordinating efforts and assuring interoperability. Partnerships also have difficulty with products as incentives, for instance to close a deal it is unlikely EMC will give away a storage device in order to get a large Cisco switch deal. Account ownership is problematic, however, the solution can be closer to best of breed. Generalist firms often have internal bureaucracy issues that can sometimes make the partnership problems appear trivial, and generally have less flexibility when it comes to picking the best solution because the parts have to be internally sourced. Account ownership is more natural and the large vendor should be better, if executing optimally, in account loyalty. Few firms of any size consistently execute optimally and none in all accounts.
With HP now taking on Cisco broadly, the large-scale networking space is forever changed, which should have a dramatic impact on the world's networking fabric going forward. But your life probably won't change that much.
Iceland Volcano: Big Change Little Impact
As I write this, apparently the air traffic shutdown over Europe will be eased tomorrow but the possibility of an even larger volcano erupting with greater potential impact on travel remains on the table. We see pictures of the European airports closed down and the mass stranding of people, many traveling on business, worldwide.
One of the ways you change behavior is to force people into a new pattern. This inability to fly is likely forcing people to use teleconferencing and telepresence much more aggressively. If the second volcano erupts, the flight ban over Europe could extend to weeks. If you get people to change their behavior for a long enough time, the new behavior sticks and folks will do things differently. If that happens, the Tandberg-Cisco merger may actually turn out to be the more opportune because it affirms Cisco at the top of the telepresence space. But, getting people off of planes and in offices working would likely have a bigger impact on productivity and the world business makeup than HP emerging as a challenger to Cisco would.
This outcome is less likely because people just don't like to do things differently, will fight change, and revert to the old behavior if the change hasn't been in place long enough to become the new habit. The potential for changing how often you travel and the quality of life is huge, but this will likely fall well short of that potential.
Wrapping Up: Mergers Are Easy, Changing Behavior Is Hard
Comparatively, mergers generally fail to meet expectations, but we have been trying to get people to use teleconferencing systems instead of airplanes since the '80s, and even with massive air travel disruptions, 9/11, and a pre-boarding search process that we wouldn't have believed possible a few decades ago folks still prefer getting on a plane. I wonder how many people are missing meetings they could attend with technology because they haven't thought to use it.
The lesson here is that it takes a lot to change behavior so if you have a choice between the options of going where people already are or trying to drive them to someplace they aren't, unless you're Apple, pick the former over the latter. Regardless of whether this becomes a replacement for everyone else's travel and regardless of which vendor you choose, catastrophes provide a way for you to drive needed change. Maybe it's time once again to look at replacing most airline travel with some form of conferencing. The time you save may be your own.