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Cisco and HP part ways, end partnership

By Jeff Jedras and Paolo Del Nibletto, ITBusiness.ca
February 19, 2010 02:51 PM ET

ITBusiness.ca - In a move that perhaps seemed inevitable as the one-time strong partners began to butt competitive heads more and more in the data centre, Cisco Systems (NASDAQ: CSCO) and Hewlett-Packard (NYSE: HPQ) have ended the last vestiges of their partnership.

In a video blog, Keith Goodwin, senior vice-president of Cisco's worldwide partner organization, confirmed Cisco was ending its system integrator contract with HP when it expires on April 30th, ending HP's role as a both a Cisco Certified channel partner and a Global Service Alliance partner. HP also made a move to back away from Cisco, disclosing an agreement to resell QLogic Corp.-developed 8Gbit/sec Fibre Channel switches, an offering HP formerly sourced from Cisco.

In his video, Goodwin said that in recent years, Cisco and HP have begun to develop differing visions of how to deliver value in the data centre, leading to increased competition between the companies that led to the decision to end the partner relationship.

"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."

Cisco declined to comment on the move beyond Goodwin's statement. HP Canada declined a request for interview, but did provide CDN with a statement saying history has proven that customers and the market demand both co-opetition and collaboration between IT vendors and that most major players compete in one deal and partner in others to best serve clients' needs, adding HP doesn't believe it's in the customer's best interest to take a proprietary stance.

"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. "Our strategy and platforms will continue to be market driven to create advantage today and into the future for our clients."

Competition between the two companies, once erstwhile partners, has become heated in recent years. HP's expansion of its ProCurve networking portfolio, and its acquisition of networking equipment vendor 3Com late last year have seen the vendor take direct aim at Cisco's market. And with moves such as its Unified Computing System (UCS) and its expanding data centre vision, Cisco has also been moving into HP's bread and butter. Executives from the two vendors have also been waging an increasingly pointed war of words.

Still, the ties between the two companies run deep, particularly on the services side. In Canada, HP is Cisco's largest partner. And particularly with the former EDS business within HP, HP has a lot of Cisco customers to support. Goodwin said Cisco will honour those service contracts for their duration, and has reached-out to HP to work on a "new agreement that ensures business continuity for existing customers and better reflects the current state of our relationship," but the future remains unclear.

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