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HP being dropped by Cisco as a certified reseller

February 23, 2010

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IT companies sometimes make for strange bed fellows and this case certainly isn't unusual. Some industry observers had seen it come for quite a while now. Less than 3 months after HP announced a friendly merger agreement with 3Com Corp., and about a year after Cisco Systems entered the server segment of the industry, Cisco said it will not renew HP’s reseller and systems integrator contract.

Beginning May 1st, 2010, HP will no longer be a certified reseller of Cisco Systems’s networking equipment, meaning that Hewlett Packard will no longer get proprietary Cisco data. HP is expanding its switch and router offerings with the acquisition of 3Com Corp., and will also resell QLogic’s fibre channel switches as well.

Cisco actually made the announcement in a video blog on Feb. 18. In March 2009, Cisco announced it would compete head-on with large server vendors such as IBM, HP and Dell with its Unified Computing System blade server series.

HP declined a request for interview with Toronto-based Computer Dealer News (CDN) magazine. But HP did write a statement saying most major players compete in one deal and partner in others to best serve clients' needs.

Keith Goodwin, senior V.P. of Cisco's global partner organization, said in a webcast that the changing IT landscape, the evolving role of the network and his company's competition with system vendors means it can no longer share partner benefits with HP.

He added "we're taking this action to be completely transparent to both our partners and customers. Cisco will compete with HP for future business, nevertheless."

For its part, HP announced that it has expanded a storage switch reseller agreement with QLogic Corp., a product area typically filled mostly by Cisco.

“We will provide clients with IT consulting services, systems integration, professional management and end user support services for their heterogeneous environments and ensure that our hardware and software platforms are fully optimized for all leading networking platforms,” said HP.

Paul Edwards, director of SMB and channels research with IDC Canada, said he was surprised by Cisco's sudden decision to drop Hewlett Packard, even though he had a hunch this would happen sooner rather than later.

While the two companies have been fighting a lot for market share in the past year, he did note that such fierce competition is common in the IT industry, and especially when Cisco is involved.

In the Cisco webcast, Goodwin took a swing at HP, saying the company no longer "aligns" with its network-centric vision. About 81 percent of Cisco's business is done through large and intermediate-size resellers, and no less than 11,950 of those are certified partners, meaning that their products and IT consulting services have been certified to work with Cisco networking equipment.

Goodwin said “being a Cisco Certified Channel Partner has numerous benefits including access to proprietary information, such as product roadmaps and partner profitability initiatives. Given the long term evolution of our relationship, for us it simply no longer makes sense to provide these benefits to HP.”

Edwards concluded by saying “we need more details. What does it mean when they've basically taken away their partner status, but yet they're talking about continuing to work with HP within accounts? That sounds pretty confusing to me. Is it for you too?”

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Source: Cisco.