What Should We Expect From The Cisco-HP Split?

CloudCloud ManagementDatacentreLegalRegulationWorkspace

How will Cisco Systems and HP go on serving common customers and providing innovative products when they cannot share proprietary information?

James Staten, a principal analyst with Forrester, predicts “degrees of partnership” in whatever relationship HP and Cisco have in the future.

“Each of these companies has been a reseller of each other’s solutions in a way that they were jointly developing solutions that required access to road maps and NDA info that simply doesn’t make sense to share anymore,” Staten told eWEEK.

“So they will simply move down to a lower level of partnership where this isn’t necessary. It still means they will jointly work [with publicly available info] to ensure their solutions integrate. To your point in your question, they have to.”

Alliances Must Be Evaluated Constantly

Art Canter, president and executive director of the Association of Strategic Alliance Professionals, told eWEEK that in many cases like this, “particulars of proprietary information and processes for working with common customers are negotiated up front” when the alliance is first negotiated.

“Strong, alliance-minded companies—of which HP and Cisco are prime examples—examine, re-evaluate and alter these details throughout the lifespan of a partnership to ensure the alliance meets changing market dynamics,” Canter said. “In general, companies that perform the due diligence both up front in the negotiation stage as well as on an ongoing basis should be able to work out an equitable agreement in relation to common customers at the end of the alliance and beyond.”

The two companies likely will be providing “cutting-edge solutions” based on their different visions of how to deliver value to customers, he said.

“One of the benefits of an alliance as opposed to a merger or joint venture is that they offer firms greater flexibility in winding down their joint activity when it no longer makes sense given their respective strategies. This is critical especially at a time when corporate strategies shift so frequently,” Canter said.

Rob Enderle, principal analyst at the Enderle Group, told eWEEK that this situation is “actually rather common, as firms often cooperate in some areas and compete in others.”

“It does create tension, though, and the competition clearly makes it vastly more difficult for the two sides to communicate strategically. Care also has to be taken to avoid the impression of price fixing if the two firms compete heavily in any one area,” Enderle said.

Charles King, principal analyst at Pund-IT, told eWEEK that “though vendors often do share information and collaborate on individual or specific solutions, much of the work affected by Cisco’s decision lies in areas of system integration. That could put a significant bite on HP’s efforts to ramp up their services offerings and possibly create opportunities for competing service integrators.”

What are the most acute pain points for customers and channel partners in a spat like this?

“Where to start?” Forrester’s Staten said. “The customer gets to witness and live with the finger-pointing. And only after they yell, ‘Enough! You two get in a room and fix this!’ does anything happen. Thus the customer has to be the big-dollar squeaky wheel.

“Look for IBM, Dell and Oracle to jump all over this. Juniper [Networks] and Brocade from the opposite side.”

Click to read the authors bio  Click to hide the authors bio