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It’s over: Cisco ends long-term partnership with HP

February 22, 2010 • Top Stories

Keith Goodwin, Cisco SVP, worldwide channels (image source: Cisco)

HP will lose its role as both a Cisco Certified channel partner and a Global Service Alliance partner as of 30 April. Cisco decided to end the long-term partnership due to increasing competition between the two parties.

According to Financial Times, HP was dropped as an authorized reseller of Cisco’s networking products after a carefully revision of the partnership contract which expires on April 30.

Keith Goodwin, Cisco senior vice-president, explained that the company would not renew its contract with HP as the two entities compete against each other for hardware sales in the corporate environment.

“History has proven that customers and the market demand both competition and collaboration between IT vendors. Most major players compete in one deal and partner in others to best serve clients’ needs. We do not believe it is in the customer’s best interest to take a proprietary stance”, replied HP in a statement to ITNewsAfrica.com.

The move may affect HP in long term, said analysts. The company sells around $1bn of Cisco products annually and its client base often benefit from HP’s storage and server solutions combined with Cisco’s networking products.

HP is currently negotiating a new way to tap into Cisco’s equipment and declares it will continue to provide clients with consulting, integration, management and support services for heterogeneous environments.

The company has expanded a switch reseller contract with QLogic, also addressing Cisco’s market. It is reported that the former partners started to distance themselves more than a year ago, after both announced initiatives to sell servers and Internet switches.

HP recently announced its financial results for the first fiscal quarter ended 31 Jan 2010, with net revenue of $31.2 billion, up 8% from last year.

Enterprise Storage and Servers (ESS) reported total revenue of $4.4 billion, up 11%, while Industry Standard Server (ISS) revenue increased 27%. The company saw declining revenues in the storage (3%) and Business Critical Systems (22%) divisions.

For the second quarter of 2010, HP expects revenues of approximately $29.7 billion.

HP estimates full year fiscal 2010 revenue will be approximately $121.5 billion to $122.5 billion, up from its previous estimate of $118.0 billion to $119.0 billion.

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