Cisco And HP Decide To Part Ways

Cisco Systems and Hewlett-Packard made it official on 18 February: They are getting a divorce, thanks to irreconcilable differences in IT direction.

The final decree will come on 30 April, when both the channel partner and system integrator agreements between the two IT giants end.

It boils down to the fact that HP is focused on servers, while Cisco is focused on networks. HP is in the data centre products and services business; Cisco used to be a network pipe fitter but now is moving into HP’s territory in a big way.

What did anybody expect? A “Welcome Wagon” picnic in the park for Cisco and HP execs and employees?

“In order for Cisco to lead [technology] market transitions with our partners, we must align with – and invest in – partners who share our network-centric vision,” Keith Goodwin, senior vice president of Cisco’s Worldwide Partner Organisation, said in a video statement on the Cisco website.

“Over the last few years, our relationship with HP has evolved from [partners] to companies with different and conflicting visions of how to deliver value to our customers,” Goodwin said.

“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 road maps and partner profitability initiatives. Given the evolution of our relationship, it simply no longer makes sense to provide these benefits to HP.”

Cisco has informed HP that it will not renew its system integrator contract when it expires on 30 April, Goodwin said, and HP will no longer be commissioned as a channel or global service partner.

An immediate response from HP was not available at posting time.

“We’re taking this action to be transparent to both partners and customers,” Goodwin said. “We will compete with HP for future business.”

Competition, not ‘coopetition’

You bet Cisco will compete. That much has been well known for a while, ever since March 2009, when Cisco gathered up partners such as EMC, VMware, Accenture, NetApp and BMC to build and sell its new Unified Computing System. This is a network-focused, second-generation virtualised data centre concept that competes directly with products from not only HP, but also IBM, Fujitsu, Dell and now Oracle.

For its part, HP announced in November that it was buying network company 3Com. Previously it had announced agreements with Brocade and Juniper Networks. Those, along with a deal with QLogic announced on 18 February, pretty much booted Cisco out of its own plans.

Read that as, “Goodbye coopetition; hello, competition.”

Of course, Cisco and HP are too big and entwined at the customer level to split everything completely. Goodwin said Cisco has already pinged HP to start discussions for a new deal in order to maintain SLAs (service-level agreements) with existing Cisco-HP customers, and there are multiple thousands of those.

The lawyers will be busy with that document for a while.