Cisco goes head to head with HP

Cisco will not renew its HP contract

Cisco will not renew its HP System Integrator contract which expires on 30 April this year, which will result in the organisations going head to head in the market.

Speaking on a Cisco channel video blog, the senior vice president of Cisco's Worldwide Partner Organisation Keith Goodwin spelled out the implications: "This action will be transparent to both partners and customers – we'll compete with HP for future business."

As for HP customers having Cisco hardware and software in their businesses, Goodwin said that Cisco would honour Cisco customer service contracts with HP for their duration.

Goodwin added: "Cisco is working with HP to begin the discussion around a new agreement ensuring business continuity for existing customers and better reflecting the current state of our relationship."

In a joint research note, Ovum's senior analyst Adam Jura and its principal analyst Jens Butler explained that hardware was still a critical part of Cisco's strategy.

"Cisco does not want to provide HP with road map information on competing 'innovative' products, such as its Unified Computing System, that was afforded HP as part of the certified partner/reseller programme membership," they said.

Ovum's analysts also pointed out that HP's 3Com acquisition would take time to completely integrate, as would its partnership with storage networking vendor QLogic.

"It appears that HP needs Cisco more than Cisco needs HP," they said.

However, one analyst said: "Cisco has its own challenges since it will need to be able to have better business value conversations with clients, as HP has been clearly superior in this area."

Cisco recently announced buoyant second fiscal quarter results, with a 23 per cent rise in quarterly profits to £1.2bn year on year. Revenue increased eight per cent from last year's quarter to £6.2bn.