Three months after Hewlett Packard Development Company LP announced a friendly merger agreement with 3Com Corp. and a year after Cisco Systems Inc. entered the server space, Cisco said it will not renew HP’s systems integrator contract.
San Jose, Calif.-based Cisco made the announcement in a video blog Thursday. Cisco last March announced it would compete with large server vendors such as HP with its Unified Computing System blade server series.
Keith Goodwin, senior vice president of Cisco's worldwide partner organization, said Thursday in a webcast that the changing IT landscape, the evolving role of the network and his company's competition with system vendor means it can no longer share partner benefits with HP.
"We're taking this action to be transparent to both partners and customers,” Goodwin said. “We will compete with HP for future business."
HP also announced that it has expanded a storage switch reseller contract with QLogic Corp., a product area typically filled by Cisco.
HP Canada declined a request for interview with Toronto-based Computer Dealer News (CDN) magazine, also published by IT World Canada. But HP did write a statement saying most major players compete in one deal and partner in others to best serve clients' needs.
“We will provide clients with consulting, integration, management and support services for their heterogeneous environments and ensure that our hardware and software platforms are optimized for all leading networking platforms,” said HP.
In the Cisco webcast, Goodwin took a swipe at HP, saying the company no longer "aligns" with its "network-centric vision." Eighty percent of Cisco's business is done through resellers, and 12,000 of those are certified partners -- meaning their products have been pretested to work with Cisco equipment.
“Being a Cisco Certified Channel Partner has numerous benefits including access to proprietary information (such as product roadmaps) and partner profitability initiatives,” said Goodwin. “Given the evolution of our relationship it simply no longer makes sense to provide these benefits to HP.”
Paul Edwards, director of SMB and channels research with IDC Canada, said he was surprised by Cisco's decision to drop HP. While the two companies have been butting heads more and more, he noted such “co-opetition” is far from uncommon in the IT industry.
“We need more details,” said Edwards. “What does it mean when they've basically taken away their partner status, yet they're talking about continuing to work with HP within accounts?”
The decision to drop HP was seen as largely inevitable by James Alexander, senior vice-president, Info-Tech Research Group, calling it a bit of a proverbial closing the barn door after the horse has left, given the increasingly fierce competition between the two companies.
“I think for both sides it signals a growing recognition in the IT community that data centres are being re-engineered and that the transport layer of the data centre is an integral part of how next-generation data centres will be designed,” said Alexander. “Both companies clearly have a strategy to implement that, and HP is moving into the networking space as quickly as Cisco is moving into servers and storage.”
When Cisco first announced its B series Unified Computing System server last March,it said the server is designed to tightly integrate computing, networking, storage access and virtualization into a single platform.
Cisco’s launch of Unified Computing System provoked a strong reaction from HP.
HP said it was “appropriate” for Cisco to announce the launch at a museum, because the “notion” of combining computing, networking and storage was already five years old.
Shortly after Cisco announced UCS, network market researcher Zeus Kerravala described UCS as the first stand-alone server designed specifically for virtual machine environments. Kerravala, senior vice-president at Boston-based Yankee Group Research Inc., said a key feature of UCS is the extended memory, designed for virtualization.
Cisco said UCS lets users define networking properties, such as quality of service, guaranteed bandwidth and security profiles for applications or virtual machine regardless of what physical server they are on.
Though HP has offered switches through its Procurve division for some time, its acquisition of 3Com will allow it to offer a wider variety of switches and routers, plus security from 3Com’s TipppingPoint division.
Shortly after the HP-3Com merger agreement was announced, Info-Tech Research lead analyst Mark Tauschek told Network World Canada: “Cisco should be scared.”
--With files from Jeff Jedras, Paolo Del Nibletto and Greg Meckbach