Cisco Smacks Down HP Partnership - InformationWeek

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2/19/2010
12:17 PM
Alexander Wolfe
Alexander Wolfe
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Cisco Smacks Down HP Partnership

Cisco has made what can only be characterized as an aggressive move emphasizing its strategic surge from a networking-centric vendor into a unified computing powerhouse. As in, they sell servers now, too. In a blog post, Cisco unleashed the news it will terminate its system integrator contract with HP, and the latter will no longer be a Cisco Certified Channel or Global Service Alliance partner.

Cisco has made what can only be characterized as an aggressive move emphasizing its strategic surge from a networking-centric vendor into a unified computing powerhouse. As in, they sell servers now, too. In a blog post, Cisco unleashed the news it will terminate its system integrator contract with HP, and the latter will no longer be a Cisco Certified Channel or Global Service Alliance partner.Here's the money quote from the Cisco blog post, which comes via channel chief Keith Goodwin, who is senior vice president of Cisco's worldwide partner organization:

"Over the last few years our relationship with HP has evolved from a partner to companies with different and conflicting visions of how to deliver value to customers. Despite this shift in industry dynamics, HP had remained a Cisco Certified Channel Partner. Being a Cisco Certified Channel Partner has numerous benefits including access to proprietary information (such as product roadmaps) and partner profitability initiatives. Given the evolution of our relationship it simply no longer makes sense to provide these benefits to HP.

With this in mind we recently notified HP that we will not renew its System Integrator contract when it expires on April 30, 2010, resulting in HP no longer being a Cisco Certified Channel or Global Service Alliance partner."

Cisco's move is not really surprising when you consider that Cisco and HP are no longer complementary so much as they are now competitors.

In the old days, HP, IBM, and Dell sold servers, and also resold Cisco networking gear as part of packages they offered their customers. Cisco was squarely positioned in that networking space.

Last year, though, Cisco dove into the blade server space, launching its Unified Computing System (UCS). However, it's my opinion that calling this a "launch," as in just another launch, is way underplaying its impact.

What Cisco did was both smart and disruptive. Rather than rolling out a "me-too" option, Cisco came created with what's essentially a new product segment. By tightly bundling a blade server with networking, UCS was less a standalone server and more like an all-in-one data center offering.

As such, UCS competes squarely with best-of-breed business models, where the likes of HP, IBM, Dell, and Oracle/Sun pull together for their customers integrated packages of processing, storage, and networking, created out of a variety of in-house and partner technologies. (The other fly in the ointment is that many of these guys--though apparently not HP anymore after April 30--are still in the coopetition position of offering Cisco networking solutions as options to their customers. However, that coopetition model may be fracturing, particularly as regards Dell, according to Mike Fratto''s report on NetworkComputing.)

Perhaps in response, one gets the sense that HP, IBM, Dell are all emphasizing their own integrated data-center plays all the more. I don't want to overdo the Cisco impact, so I should add that the aforementioned Tier 1 vendors have all independently developed their respective data-center strategies and would have done so regardless of Cisco. Still, I can't help but get the sense that Cisco's UCS incursion has heated up the whole market.

Further, it's created something of a blurring of what was previously a clear very line of demarcation between servers as stand-alone product and data-center solutions. I

I've written about this a bit this changing landscape a lot lately. You can check some of it out in:

Server Den Q&A: Dell CTO Elucidates Efficient Enterprise;

Server Den: Inside HP's Converged Infrastructure;

CES Den: Cisco Video Thrust Telegraphs Bandwidth-Bandit Strategy;

HP Revs Data Center Strategy, Stabbing At Cisco;

Q&A: HP ProCurve Chief Technology Officer Paul Congdon

What does this mean going forward? I think the gist of the battle was summed up nicely in a comment left on the Cisco blog post by Mike Kirkwood of ReadWrite Cloud:"With HP servers commanding such a large marketshare…it seems that the battle is on to find out whether the Server or Network is the platform." Indeed.

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Alex Wolfe is editor-in-chief of InformationWeek.com.



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