Cisco dumps HP, doesn't want competition

by Abhinna Shreshtha    Mar 19, 2010

Come April 30, 2010, the partnership between two of the industries leading vendors, namely HP and Cisco will be annulled. HP will no longer be a certified reseller and system integrator for Cisco products and services. In a statement, Cisco has claimed to have made this decision due to HP’ s ‘aggressive, competitive’ strategy for networking

Cisco’s relationship with HP started souring back in November 2009, when HP announced a $2.7 billion acquisition of network switching, routing & security solutions provider 3com.

It now seems that Cisco has finally decided that the network-centric strategy being preferred by HP is detrimental to its own interests and is looking to cut away ties with the Palo Alto-based IT major. In a statement announcing this decision, Cisco has stated that they no longer want HP to gain access to proprietary information such as product roadmaps.

"Cisco welcomes competition, including dealing with partners who sell products that compete with Cisco’s.  However, when the balance of a partner relationship evolves from partnering to primarily competitive, Cisco will take steps to protect its brand and proprietary information," the statement read.

The main concern for Cisco right now should be that HP has spent considerable time over the last ten years educating sales, marketing, and consulting organizations about engaging with clients at the business level, whereas Cisco has been a bit slow in this respect.

However, analysts at Ovum feel that HP, even post the acquisition of 3com, will take time to pose a major threat to Cisco in the networking space. " HP needs Cisco more than Cisco needs HP. While HP already possesses a network technology portfolio within its ProCurve business, the product set does not fully stack up with Cisco s technology. The acquisition of 3Com, which will go some way to mitigating this issue, will take some time to integrate fully into HP’s operations," said Adam Jura, senior analyst at Ovum.

Even the recently expanded partnership with QLogic will take time to filter down through sales organizations to people on the ground and, eventually, into conversations with clients, added Jens Butler, another analyst at Ovum.

Cisco has not disclosed how the vacuum created by HP’s absence will be filled. However, Jura is of the opinion that a potential winner in this situation could be another Cisco system integrator, Dimension Data and its APAC subsidiary Datacraft.