Hewlett-Packard and Cisco Target ISPs

Oct 27 1998

Everybody seems to be trying to get a piece of the ISP action these days. Now Cisco , maker of roughly 80 percent of the hardware carrying Internet traffic, is teaming up with Hewlett-Packard on a new breed of open Internet platforms to enable ISPs to build next-generation Internet telephony applications.

Any application running on traditional voice networks needs a platform to run on. In the telecommunications world, these are traditionally closed systems by companies like Lucent or Nortel. To deliver an application like call forwarding, a provider needs to pick a platform and write to that specific platform. But as the telecommunications industry moves to Internet standards, Hewlett-Packard and Cisco want their platform to be open, by building on Open Call, a Hewlett-Packard protocol for integrated data and voice services. This could help developing for Cisco's next-generation platform easier for vendors who would normally write for the more established players. The two companies plan to make the programming interfaces readily available to application programmers.

It is an unprecedented step in the telecommunications space, but not necessarily revolutionary. "Opening the platform up is important, but it won't change the world," said Brendan Hannigan, director of network strategies at Forrester Research . "Cisco needs to get a solution together quickly to even be able to approach the capabilities of Lucent and Nortel." And even if the Cisco-HP strategy is successful, it wouldn't be difficult for Cisco's competitors to make their platforms open and available to programmers, too.

The companies would not comment on specific products, but plan to introduce a spate of new offerings in the first quarter of 1999. "In the first quarter, we will be playing catch-up with traditional phone services," said Eric Buatois, global marketing director for Hewlett-Packard. "Capabilities like credit card calls, call forwarding and conference calling will be our first order of business - then we can introduce advanced voice and data services."

Hewlett-Packard was already a player in the telecommunication industry, and it will not limit its partnerships to Cisco. "If you look at HP's strengths in building IT platforms ... and the software to control communications, it is a perfect complement for Cisco's scalable networks," said Lew Platt, CEO of Hewlett-Packard. "But it's the hope of HP and Cisco that other companies will build on the open systems we've put together."

Cisco and HP estimate the market for IP services to be $25 billion today, a figure that will grow two to three times by the millenium. "The whole telecommunications industry is up for grabs," said John Chambers, CEO of Cisco. "Circuit switching is going the way of the dinosaur. The opportunity for us is in the hundreds of millions of dollars a year to those who can lead the way."