The Gloves Are Off: Cisco Targets HP, Partners Brace For Battle

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The gauntlet has been thrown.

What was once a relatively peaceful co-existence has turned downright ugly, as Cisco Systems this week took plenty of jabs at key rival Hewlett-Packard, prompting VARs to wonder which vendor's corner they're in.

With the speed and ferocity of pugilist Manny Pacquiao, Cisco came out swinging at its Cisco Partner Summit in Boston this week. San Jose, Calif.-based Cisco, which usually takes the high road against its competition, saying it doesn't focus its attention there, said flat out that it sees HP as a true competitor and will do everything in its power to convince its channel and its customers to choose Cisco.

"We are competing with HP. Period. End. It is competition," said Wendy Bahr, Cisco's senior vice president of U.S. and Canada channels, adding that partners will be the ones who ultimately decide which is better.

According to Rob Lloyd, Cisco's head of worldwide sales, Cisco is going to be more aggressive against the competition because it's rolled with the punches long enough and kept quiet. Now, the gloves are off.

"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."

Even John Chambers, Cisco CEO and chairman, got in on the sparring.

"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."

Nortel earlier this year filed for bankruptcy protection. Alcatel and Lucent Technologies merged to form Alcatel-Lucent at the end of 2006.

The vocal contention comes as Cisco stakes its claim in the server market with its Unified Computing System (UCS) and its new C-Series rack-mount servers. While Cisco is quick to point out that its UCS and the C-Series are architectural plays and not meant to rival HP's stand-alone server offerings, the two will butt heads in an area where HP would once lead with servers and Cisco would fulfill the core networking.

Further fueling the fire is HP's $180 million partnership with Microsoft to deliver unified communications and collaboration products and services, which will directly battle with Cisco's unified communication and collaboration offerings, products and architectures that Cisco has trumpeted the past few years.

On top of all that, HP's ProCurve networking division has been making strides, using its lifetime warranty on its switching portfolio to win over customers. Recently, Cisco battled back and launched a limited lifetime warranty of its own, covering the Catalyst E-3000 and 4500 switching lines.

Lloyd said the HP-Microsoft collaboration was the true catalyst for the feud. Cisco already competes with Microsoft in the unified communications and collaboration space, despite partnering with the software giant on its UCS data center offering. Lloyd said Microsoft choosing to partner with HP for UC signifies that Microsoft recognizes the importance of the network in delivering collaborative solutions.

"Microsoft has been saying for several years now that the network doesn't matter," Lloyd said. "They said 'VoIP as you are.' Suddenly, they have a partnership with a networking provider. They just picked the wrong partner as it relates to the implications of the network and its requirement to deliver scalable enterprise-class call control and applications. That's why Cisco has become the market leader."

Lloyd added that "the networking capabilities that HP provides will add very little value to the unified communications of Microsoft, just as very little value was added in their partnership with Nortel, just as very little value was added in their partnership with Siemens. We actually think they've recognized very openly and publicly the importance of the network. We just think we're the best company in the world to deliver networking characteristics that are important for unified communications."

Lloyd said he expects HP to take a direct approach with its collaboration offerings and said Cisco is "very flattered" that HP is attempting to copy some of Cisco's collaborative architectural approaches. For example, he said, HP's Halo offering takes pieces from Cisco's TelePresence videoconferencing. Ultimately, he said, it will be up to the channel to decide whose flag they wave.

Next: Partners -- 'It's about time'

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