Cisco and HP announced plans today to offer a combined set of hardware and software that will tackle the emerging requirements of service providers and carriers to migrate from traditional telephone circuit-based systems to networks more aligned with data-based technology.
The two giants spoke glowingly of their joint work to bring HP's telecommunications expertise and Cisco's networking focus together at a press conference here, as previously reported. The move is the continuation of an evidently fruitful partnership between HP and Cisco, according to the companies.
"This is certainly a powerful arrangement and these two companies can make this market move forward," said John Armstrong, analyst with Dataquest. "But this is not a slam dunk, though, since this will be an evolution."
The bets being laid are particularly important for Cisco, a company that currently lacks some elements of the functionality necessary for them to compete in this so-called "New World." Service providers are increasingly demanding the reliability and services capability of voice-based systems in data networks as they migrate to an infrastructure based on the routing and switching equipment that companies like Cisco provide.
The move by the two companies--which stepped up their partnership last year--is part of a widespread trend within the data networking and telecommunications industry. Traditional voice-based equipment firms are increasingly finding that their customers want to migrate from a circuit-based voice network to a layout for both data and voice based on the Internet Protocol, or IP, the dominant means to transmit data across the Net.
The merger of Bay Networks and Northern Telecom to create Nortel Networks is the most obvious example of this trend, but other moves are of a similar ilk, such as the recent purchase of Stratus Computer by Ascend Communications.
"Nothing forces a change in behavior like survival," noted John Chambers, president and chief executive at Cisco.
HP and Cisco believe they have an opportunity to drive growth in building IP-based networks and systems without having to protect an installed base of circuit-based networks, a clear swipe at traditional telco equipment providers such as Nortel and Lucent Technologies.
"We think it's a move that will accelerate the Internet economy," proclaimed Lou Platt, chairman, president, and chief executive at HP.
"In terms of the opportunity, the whole telecommunications industry is going to change," Chambers added. "It's a dinosaur infrastructure."
Initial results of Cisco and HP's joint work will roll out in the first quarter of next year. The premise--building a system that will allow carriers to access a wealth of data about network usage to bring data-based layouts in line with voice networks--will essentially tie the data and voice worlds together through industrial strength service quality and management software.
New OpenCall Multiservice Controllers, as the new jointly developed product line will be called, essentially provides carriers with a mechanism to offer differentiated services across circuit-based and IP networks like voice mail or callback features, common within current phone networks, but new to the data world. The new products will be among several current attempts within the industry to provide gateways between voice and data systems.
"You have to build these tools to help in the transformation," according to Jeff Graham, a partner liaison manager for Cisco.
Among several partners HP and Cisco trotted out as supporters of the initiative was EDS, a huge technology services and consulting firm that is seeing a large increase in interest on the part of carriers in implementing new buildouts based on a data and IP infrastructure.
"When it comes to folks out there, there is some reticence, but they realize they must find a way to differentiate themselves," said Jim Vesterby, director of product alliances for EDS's communications industry group. "If you look at the traditional way we've made our money--that's changing. This is going to be one of our economic engines of the future."