Cisco Declares War on HP

Cisco's decision to pull the plug on its partnership with HP was a major salvo in tensions that have been brewing between the two companies over the past year. Cisco last week said that it's cutting HP off as a Certified Channel and Global Service Alliance partner, a move that could force the companies' respective partners to make some tough choices.

"There may be a push by one or both companies to push channel partners to an either/or situation," said Mark Amtower, a marketing consultant with expertise on selling IT to the federal government, in an e-mail. "Many companies carry both as partners right now -- I don't think that will continue. If you push HP, marketing support from Cisco will disappear and vice versa."

The two companies have been encroaching on each other's turf for some time, with Cisco last year saying it would offer its own blade servers and HP becoming more entrenched in networking by bolstering its ProCurve line and agreeing to acquire 3Com Corp.

With the partnership set to expire April 30, Cisco took the unusual move of publically announcing it was cutting HP off. HP quickly shot back, accusing Cisco of not working to "best serve clients' needs."

Does this move signal an end to co-opetition? It raises the question of whether we will we see more partnerships unravel or, at the very least, become more diminished as companies look to become single-source providers.

Or maybe, as Directions on Microsoft analyst Paul DeGroot suggested, the current partnership has become "too all-or-nothing." Perhaps they needed "a more nuanced approach to ensure that joint customers get the support they require, while the other partner doesn't get privileges that it doesn't need for mere interoperability purposes," he said.

Gartner analyst Tiffani Bova agreed. "I wouldn't be surprised if a new arrangement doesn't follow closely behind where they meet each other half way in order to continue to service their joint customers and partners," Bova said.

Indeed, that may happen. On the other hand, what if Cisco means business and wants nothing to do with HP? If indeed these two companies go their own way, we could see Cisco getting closer with IBM and perhaps Oracle/Sun while HP could forge closer ties with the likes of Brocade and Juniper Networks.

Certainly, for Microsoft partners, this also raises some questions since most also carry gear from Cisco, HP or both. What's your take on the implications of Cisco and HP going separate ways? Will we indeed see others follow suit? Among other things, could this lead Microsoft to rethink its strategy of working closer with the likes of Novell, Red Hat and Zend? Could co-opetition as we know it be on the line here, or is this just a case of Cisco playing hardball?

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Posted by Jeffrey Schwartz on February 22, 2010