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Cisco Systems Inc. and Hewlett-Packard Co. have shown their fangs and are out for blood.
The two powerhouses' relatively peaceful coexistence has been burned -- torched to the ground -- as each encroaches on the other's territory. And among the embers are partners left wondering if, or more importantly when, they'll be forced to choose sides as the battle hits a crescendo.
Partners see it coming, but few are quick to talk about the war that's being waged. One large partner that generates a great deal of revenue through both Cisco and HP sales said that just discussing the kerfuffle is "very high risk" and "could open a huge storm." He's nervous, and for good reason. Upsetting either vendor could hurt, and the fallout could be to the tune of tens of millions of dollars.
"HP and Cisco are starting to cause problems in the channel," that partner said, asking his name not be used. VARs are leery that one of their key vendors may pull their certifications or status if they make a deal with the other side's gear.
They're scared. But at the same time, they're excited, because tough competition sparks innovation and innovation eventually trickles down to more sales.
"Anything that makes the channel more competitive is beneficial," said Justin Burleigh, manager of operations at Tempe, Ariz.-based solution provider Network Infrastructure Corp. "But whenever you have two Goliaths of infrastructure competing, something's got to give."
Who Started It?
Pinpointing when and where the chest beating started is proving difficult. HP has made waves with its ProCurve line of networking switches and equipment, chipping away at some of Cisco's market share. HP kept ProCurve relatively quiet for years, just recently trumpeting it as a true alternative to Cisco's higher-cost gear.
Cisco battled back, launching the Unified Computing System (UCS), a solution set that ties together the network, compute, storage, virtualization and servers into one cohesive fabric. UCS essentially propelled Cisco into the blade server and data center game, one in which HP has been a mainstay for years. Though Cisco is only planning to ship 200 UCS systems in the first round and has only about 20 partners selling it, "Cisco is creating a market and creating a buzz," one solution provider said.
Another stone was cast the day after Cisco unveiled UCS. That day, HP Canada issued a press release with the headline "HP To Cisco: You Have A Lot To Learn About The Data Center." In the press release, HP pointed out holes in Cisco's data center portfolio, calling the San Jose, Calif.- based networking behemoth's data center innovation "reactionary and laggard."
Then there's collaboration and unified communications, an area Cisco sees as a $34 billion opportunity for itself and its partners and one in which it has heavily invested. In May, HP lifted the curtain on a four-year, $180 million partnership with Microsoft Corp. to develop, build and service unified communications and collaboration solutions. That was the straw that broke the camel's back, prompting Cisco to come out swinging, and swinging hard. It started with a blog post from Cisco global channel chief Keith Goodwin, claiming that the HP-Microsoft unified communications pairing appears more of a direct play than a channel-friendly partnership.
Cisco's spouting crescendoed at its annual Partner Summit in June. With the fury of a howitzer, Cisco spit anti-HP sentiment loud and often. On stage, Don Proctor, senior vice president of Cisco's software group, said HP leaves partners out of the loop and lacks the networking chops to be a true player in the collaboration space.
"Don't buy into the hype. This is about HP and Microsoft taking the business direct and cutting you out," Proctor told roughly 5,000 Cisco partners -- 1,500 in attendance and 3,500 virtually -- later adding, "You can't build a world-class collaboration solution unless you have a world-class network, and they don't have one."
HP denied it, saying its UC offerings with Microsoft will create a host of opportunities for the channel. "We have been and will continue to be a channel-based company," said Karl Soderlund, HP America's vice president and general manager of sales and marketing for ProCurve. "We are not setting up a direct model."
Here's The Punch Line
The newfound animosity -- from Cisco's side, at least -- began not long after the appointment of Rob Lloyd as Cisco's executive vice president of worldwide operations, considered by many to be the most likely successor to Chairman and CEO John Chambers. Before Lloyd took over for Richard Justice earlier this year, HP and Cisco kept their competition behind closed doors. Now the door's been opened wide.
"I think we've been taking too many punches with regard to the competitive landscape and not punching back. We'll keep it clean, but for you we need to help define the value proposition on why we're a better choice than [HP] ProCurve," Lloyd said, garnering applause from the audience during his Partner Summit keynote. "I'm encouraging all of us to punch back -- with a little bit of class -- and if we get it right, it will make a big difference in the market."
Regardless of who started it, it's on now. And Cisco, which typically sticks to Chambers' mantra of not discussing the competition, has exploded into a booming chorus, calling for the head of its new foe.
"HP is a competitor, and we're going to have fun competing. We've never had a $110 billion competitor before," Chambers said. "The last time we had this type of opportunity in front of us was with Nortel, Lucent [and] Alcatel: great companies, and we held our own pretty effectively."
"We are competing with HP. Period. End. It is competition," added Wendy Bahr, Cisco's senior vice president of U.S. and Canada channels, noting that partners will be the ones who ultimately decide which is better.
HP: Who Us, Worry?
HP executives, meanwhile, are less fired up than their Cisco counterparts when asked about the burgeoning rivalry.
"It looks to us like Cisco is making its assessments to extend into what they see as adjacencies. But it's been largely saber-rattling," said Paul Miller, vice president of marketing for HP's Enterprise Storage and Servers business. Miller speaks in measured tones, without much inflection, choosing words that seem designed to put the rivalry to bed rather than stir it up. Of Cisco's initial server offerings in UCS, which feature blade servers and Cisco's newer UCS C-Series rack servers, he claimed that Cisco at this point has none of the strengths of more established rivals to pose a credible threat to HP.
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