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Will The HP-Cisco War End IT As We Know It?

As battle lines are drawn, concerns grow about brand lock-in and the 're-siloing' of the data center.

Human sacrifice! Dogs and cats living together! Mass hysteria! Okay, so the latest shot fired in the hot war between Hewlett-Packard and Cisco probably won't lead to any of those things. But hyperbole (and Ghostbusters) aside, there is surely reason to think that the battle lines being drawn today could significantly shake up the dynamics of the data center in the coming months and years.

"It's like a bad marriage, where everybody knew that the two parties were headed for divorce but then it happens, so there's some shock but not a lot of shock," said Zeus Kerravala, a senior analyst with the Yankee Group.

Kerravala believes this particular divorce has been years in the making, beginning with Palo Alto, Calif.-based HP's aggressive positioning of its ProCurve brand of networking hardware against San Jose, Calif.-based Cisco's industry-leading routers and switches.

Charles King, principal analyst for Pund-IT, called the break "probably inevitable" but also remarked that "it's unusual to see one major vendor disassociate itself so publicly from another."

"The last time I can remember something similar was in 2002 when Scott McNealy said during an analyst event keynote that Sun would no longer work with EMC -- not that it seemed to hurt EMC in any measurable way," King said.

Get Ready For Some Fireworks

Sun may not have wounded EMC very deeply, but that's not likely to be the case with the Cisco-HP feud, Kerravala said.

"People don't appreciate the level of devastation HP can bring to bear here," he said. "HP isn't small. They can go toe-to-toe with Cisco, spend money right alongside them, match them move-for-move."

In an out-and-out war with HP on networking hardware, the Yankee Group analyst said he believed Cisco might be able to hold on to its industry-leading market share or its industry-leading margins -- but not both.

And as the industry begins to process just how deep the rift between the two tech titans has become in the wake of Cisco's announcement that it will be dumping HP as a system integrator partner this April, there are potential repercussions for the industry writ large.

The implications for the two vendors' largely overlapping reseller channels are worrisome for many Cisco and HP partners who feel increasingly pressured to pick one over the other. There has also been criticism from smaller competitors. Vikram Desai, president of Ottawa, Ontario-based Liquid Computing, who thinks that Cisco and HP are throwing their weight around to push an ultimately unhelpful kind of "brand lock-in" throughout entire data centers.

"It is a cartel that removes a customer's ability to choose and leverage multiple suppliers in pursuit of the best solution for them," Desai told some months ago, in response to Cisco's launch of its Virtual Computing Environment coalition with EMC and VMware.

Next: A Slippery Slope To The Silo?

In a Thursday blog post, Keith Goodwin, Cisco's senior vice president of worldwide channels, laid out the reasons why Cisco wouldn't be renewing HP's Cisco Certified Channel Partner status. It wasn't a very long post, so you have to think Cisco wanted to make every word count.

With that in mind, what are we to make of Goodwin's emphasis on the "product roadmaps" that HP will no longer have access to when its partnership status expires? Put it this way -- that doesn't sound like a path to greater interoperability between the two companies' products.

Both Cisco and HP have been very public about their desire to deliver end-to-end technology solutions for the entire fabric of the data center. In recent months, Cisco has jump-started a brand new server business, taking the stage last spring in spectacular fashion with some of the first systems based on Intel's Nehalem-class Xeon processors. In fact, Cisco joined "Big Four" OEMs HP, IBM and Dell as the first out of the gate with Nehalem-based servers on March 30, 2009, even as erstwhile Big Four member Sun Microsystems lagged behind by two weeks.

HP has also become more aggressive in its push into Cisco's networking territory, announcing the acquisition of 3Com late last year in a move to beef up its ProCurve family of networking hardware products.

"A lot of companies have comprehensive approaches to the data center. IBM has a strong relationship with Brocade, for example, and Dell has solid partnerships. But no two companies have quite the vision of a unified data center that [HP and Cisco] do," said Kerravala.

"These two companies in particular are trying to become not just the 800-pound gorilla, but the 8,000-pound gorilla."

And whether it's Cisco's Unified Computing System or HP's Converged Infrastructure, when either vendor lays out its grand data center strategy, the talk doesn't tend to include a lot of concern about whether third-party products will work well within their proprietary walls.

If that sounds like a step backwards to the old days of siloed technology stacks, Kerravala said there could be something to that concern.

"I think that it's something to think about," he said. "What virtualization and cloud computing are driving us towards, some are saying, is the rebirth of the mainframe, and that was a very siloed system."

Few are betting that the industry standards that have opened the door to more interoperability across IT stacks are going away any time soon. But there is a growing sentiment among analysts that the kind of vendor consolidation we're seeing will certainly lead to some new form of silo-ization in the data center.

"I suspect that there will still be interoperability at a low level. But clearly, if customers want their higher level functions to work across the enterprise, they'll have to take sides, too," said Roger Kay of Endpoint Technologies Associates. Kay identified three evolving "big camps" amongst vendors -- "Cisco et. al., IBM, and HP and friends."

Will channel partners and enterprise customers simply go along with the new regime? Kerravala said unified data center solutions might be attractive in the short term, but that "in the long-term, I just don't think anybody is going to want to buy from a single vendor."

King said that "highly integrated, end-to-end data center solution stacks make sense for vendors from a business perspective, but I'd love to be a fly on the wall to see just how happy enterprise clients are about that development."

"Since they've been happy to pit competing vendors against one another for better deals, I somehow doubt customers will happily embrace the 're-siloing' of their datacenter," the Pund-IT analyst said.

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