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"Dell has the volume side and IBM has the IT side. We think we have the right formula to compete against both. We look at guys like Cisco and EMC, and they're kind of stuck without either a total portfolio of products and services like IBM or a total volume economic engine like Dell," Miller said.
"What partners need to do is to take a step back and look at it from a customer perspective. Are they going to put customers at risk over the long term? Resellers need to really watch out that they are not getting wrapped up in a lot of hype and overselling of capabilities for what customers need to have today."
HP's Miller and Soderlund characterize the rivalry as largely one-sided, with Cisco having more to fear from HP's established ProCurve business gaining strength than HP has to worry about from Cisco's early efforts to build a server business.
"This is not as much of a competitive situation as it is a Cisco response to HP's growth in the marketplace with ProCurve," said Miller. His colleague Soderlund adds, "We're not reacting to what Cisco's doing. We're just continuing to execute on what we've been doing."
While the HP executives largely stick to the narrative that the other company is the upstart in this latest round of competition, Soderlund isn't above slinging a few arrows in Cisco's direction. "Cisco's dominance has not really followed Moore's Law. They've held on to that market share and those margins for too long," he said.
Is Soderlund claiming that Cisco's success in the networking hardware segment is somehow artificially enhanced? Intel founder Gordon Moore's famous "law" specifically predicts that semiconductor manufacturers will be able to double the density of transistors on an integrated circuit roughly every two years while maintaining the same cost of materials. But many people extend the basic principles of Moore's 1965 observation about the complexity of integrated circuits to predict a steady pace of price-for-performance gains in computer technology in general.
Soderlund suggests that the performance of Cisco products has improved over time in accordance with one principle of Moore's Law but that the prices for those performance gains as passed on to Cisco's customers haven't dropped the way the second leg of Moore's Law would predict.
"Look, has Cisco been affected by Moore's Law the way other industries have, whether you're talking about chips or PCs? We don't think they have," he said.
The Partner Dilemma
Partners are less concerned with the he said/she said and more interested in which company is bringing innovative products to market and which presents the best profit opportunity. At the same time, VARs fear that either Cisco or HP will take away their business if they lead with one or the other (see story on the ProCurve battle, p. 26). One partner who asked not to be identified said he's already been told by HP to lead with ProCurve networking gear and not Cisco when selling HP servers, or else.
"One of the major issues going on right now is when customers are buying HP servers, HP is coming back and saying if you sell Cisco networking and not ProCurve we're not going to do as much business with you. HP is stepping up trying to pressure partners to sell ProCurve," that partner said.
But according to Don Bialik, CEO of Calgary, Alberta-based Long View Systems, playing the ultimatum game will work against the vendors. Long View, which also works closely with both Cisco and HP, looks at its vendor relationship balancing act as "bringing three girls to the prom and keeping them all happy," Bialik said.
While Cisco's and HP's fight has become more public, Bialik said it's nothing new, though it appears that the "gentleman's agreement to stay out of each other's hair" the companies had during Carly Fiorina's tenure as HP's CEO, which also involved a stint on Cisco's board of directors, is long gone.
Still, Bialik said, if Cisco and HP do pressure their partners to choose, it'll be to the companies' detriment.
"If one side gives us what amounts to an ultimatum, that will work against them," he said. "If you make me choose, I'll choose the other one."
Network Infrastructure's Burleigh agreed. "If they say, 'go with us or go somewhere else' people are going to go somewhere else," he said, adding that partners are still weighing which camp they'll choose.
Still, both vendors swear up and down the ultimatums won't come from them.
"They won't be forced to choose by us," Cisco's Bahr said, adding its technology, solutions and architectures stand on their own and it lets customers and partners decide where they want to invest. "We believe our architectures and solutions are better for the customer."
HP said the same; it won't force partners to make a choice, but instead will let its technology lead the charge, and the exodus away from Cisco.
"Partners are going to pick what wins deals," HP's Miller said. "The strategy we have will win deals more quickly and will make partners richer at the end of the day."
But Wait, There's More
Cisco and HP aren't the only ones butting heads wanting to control both the network and the data center. Other vendors that are traditionally network-focused have come out of the woodwork with a data center play.
Juniper Networks:
The Sunnyvale, Calif.-based networking vendor last year launched its Data Center Infrastructure Solutions architecture. Then, earlier this year, Juniper offered insight into its new Stratus project, a single data center fabric with virtualization and cloud-computing at its core.
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