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HP’s Trojan Horse

Our neighbors in Palo Alto have been making a lot of noise about the difference in price between Hewlett-Packard and Cisco networking equipment. They’d like customers to believe they can offer similar capabilities to Cisco but at much lower prices—“Cisco for less,” if you will.

Most folks understand that the first part of that claim isn’t true. They’re not Cisco. To start with, when a company spends just 2% of revenues on R&D (as HP does), it isn’t capable of generating the type of innovation that a company spending 13% can (as Cisco does). We explained how Cisco innovation delivers differentiated capabilities when we debunked the myth of the ‘Good Enough’ network.

But some customers still ask me about the price difference—the “for less” part.  After all, everyone is looking to cut costs, right?

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