Comments on: The Politics of (Dirty) Dancing – HP, Cisco, and EMC

By: The 2009 Cloudies Awards | IT Management and Cloud Blog

The 2009 Cloudies Awards | IT Management and Cloud Blog — Wed, 23 Dec 2009 17:50:24 +0000

[...] Cisco v HP [...]

By: Greg

Greg — Mon, 07 Dec 2009 09:39:33 +0000

As a customer the Vmware – Cisco – EMC relationship is a big turn off. Why would I want to now get over charged for Cisco Servers when I am already being over changed for Cisco networking gear, EMC storage, and vShpere Enterprise “Plus” licensing?

By: Phil

Phil — Thu, 26 Nov 2009 15:13:51 +0000

You are confused that cisco margins translate to higher prices. Cisco designs own ASICs, has very low costs, high productivity. HP is going to be on the defense in the server market not cisco in the network market. Cisco already beat hapless 3com and HP is a non player in networking. Cisco is coming after hp’s market and ciscos UCS product is an amazin. Market changer while HP tries to compete with their traditional servers.
Cisco has proven time and time again that they can move into new markets and take a 1 or 2 position quickly (think telephony, security, video…).

—–Au contraire my friend. Cisco’s margins at CURRENT market pricing are 65%. My argument is that they will be forced to cut pricing to maintain share and ANY cut in pricing will directly negatively impact margins. There is no way around it – unless they are able to maintain their current pricing, which seems almost impossible. I can’t agree with your assessment that HP is a non player in networking – they are a clear #2 from any angle you look at it from (but mainly $$$).

Both companies are well entrenched in their primary IT markets – Cisco in networking and HP in servers. My point is simply that Cisco is going to be hard pressed to take any meaningful share from HP in servers (if they do, they lower their margins accordingly) as HP owns that market – but I agree UCS and VCE have absolute promise (just not at the mass market level). HP is already a force in small/mid-market networking and with their relationships globally, will have an opportunity to bring the H3C gear to net new markets (they don’t play in North America nor Europe really) at a significant discount to Cisco – and HUGE margin improvements to HP. —- Steve

By: Ezra

Ezra — Mon, 23 Nov 2009 19:14:10 +0000

Great post! But what I’m slightly puzzled about: wasn’t Cisco the first to break rank in the “layer cake” and go from their layer (switches et al) into HP’s (& others) with servers?
So isn’t this more of a “you try to eat my cake, so I’ll just get right back atcha and eat yours!” kind of deal?
Or did I miss something entirely?

In any case, interesting developments as the players in the various layers (sounds stupid…) start eating away at other layers.

Good stuff, go competition!

By: Alan Crean

Alan Crean — Sun, 22 Nov 2009 12:52:41 +0000

Fantastic point – I had to sell the Cisco stuff a few years ago as part of an IBM deal (I was an IBM reseller and IBM were putting Cisco through the channel) – I thought the 3Com stuff would have been an easier sale (it was plug an play) but we got stuck with the Cisco which had the engineers tied up in knots for 3 days trying to get it all set up. At the time, we won the deal against HP, which made little client difference as they were also selling Cisco gear.

To hell with the co-opetition and meaningless alliances of convenience, now, what about the HP high end storage proposition?

—-Good question. Hitachi (not HDS – direct deal with Hitachi) and HP have a fine relationship, so I don’t see a gun to HP’s head to find a replacement necessarily. Second, it’s clear to me that while it would be nice if HP could dominate the very high end storage market, having their own product won’t be the reason. I don’t think having the Hitachi array hurts them at all – maybe the opposite. It’s hard to imagine HP would end up with a better product no matter what, so as long as the financials work, why screw with it?

What I can see is more/different/better midrange offerings. I still like the idea of HP buying NTAP – which would double their storage business overnight. I can also see them picking up a Compellent type that has newer architectures and technologies. — Steve