Cisco Systems on Thursday moved to end its long-term relationship with Hewlett-Packard. With the two companies increasingly competing in servers and networking, Cisco decided to formally cut HP from its reseller program, effective April 30.
Cisco's decision means HP will no longer have access to proprietary information from its newly found rival. Although HP can still sell Cisco products to its client base, the computing giant won't be able to tap into incentives.
Keith Goodwin, senior vice president of Cisco's Worldwide Partner Organization, said partnering is a critical element of the company's growth and innovation strategy. But after evaluating its relationship with HP, Cisco decided the companies have "conflicting visions of how to deliver value to customers."
"Being a Cisco Certified Channel Partner has numerous benefits, including access to proprietary information -- such as product road maps -- and partner profitability initiatives," Goodwin said. "Given the evolution of our relationship, it simply no longer makes sense to provide these benefits to HP."
The Cisco-HP Divorce
Cisco and HP have been headed toward divorce for several years, said Zeus Kerravala, an analyst at the Yankee Group. Although some blame Cisco for stepping onto HP's turf with its Unified Computing initiatives, Kerravala said HP threw the first punch.
"Years before Cisco's Unified Computing, HP got extremely aggressive with the pricing on the ProCurve side. HP's value proposition basically said customers were paying too much for Cisco. So Cisco has been on the defensive since then," Kerravala said. "When you look at how aggressive HP has been in trying to punch Cisco in the nose every chance they get, this was inevitable."
While sometimes rocky, Cisco has managed to maintain good relationships with other server vendors, including Dell and IBM. So Kerravala doesn't think it was Cisco's move into servers that ultimately caused the rift; rather, it was HP's move into networking.
"I don't think HP is interested in keeping the relationship going. HP has gotten to the point where they feel they don't need to attach themselves to Cisco to be networking experts anymore," Kerravala said. "Maybe they do. Maybe they don't. Only time will tell."
Cisco Throws Down Gauntlet
Goodwin threw down the gauntlet on Thursday, noting that Cisco will compete with HP for future business. Cisco is discussing a new agreement with HP to ensure business continuity for existing customers that better reflects the current state of the relationship. Goodwin also said Cisco will honor customer-service contracts with HP for their duration.
The HP-Cisco breakup is part of what Kerravala believes is going to ultimately help spur the complete reshaping of the vendor landscape, driven primarily by virtualization. The computing and networking layers are coming together, he said.
"You see Cisco partnering with VMware. You see them dissolving this relationship with HP. IBM is getting closer to Juniper. There have already been a number of moves to bring computing and networking together," Kerravala said. "It's good for the industry. Network computing is a market that was static for years, and now it's become interesting. Five years from now we don't know who's going to be whose partner or who's going to be whose enemy."
Posted: 2010-03-13 @ 5:26pm PT
Cisco is just afraid they might get bought by HP. It was just a few years ago, people wondered if Cisco would "make it"........ HP on the other hand, is just full of themselves and continue to eat up the industry and spit out the "innovators" in favour of those that will "assimmilate".... sad for those that truly love the industry, and their customers.....
Posted: 2010-02-19 @ 11:20am PT
how does this affect consumers?