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Cisco, IBM, HP Data Center Battle Heats Up

The economy is fraying everybody’s nerves, but the tone among IT industry market leaders has gotten slightly nuts of late — especially among the hardware giants. Ever since Cisco Systems announced it was getting into the mainstream server business in June, an almost-maniacal round of corporate one-upmanship has been unleashed that is truly pitting old […]

Written By: Carolyn April

Jul 29, 2009

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The economy is fraying everybody’s nerves, but the tone among IT industry market leaders has gotten slightly nuts of late — especially among the hardware giants. Ever since Cisco Systems announced it was getting into the mainstream server business in June, an almost-maniacal round of corporate one-upmanship has been unleashed that is truly pitting old friend against one another.

Consider the following:

In its efforts to make sure it has a solid networking play in this era of the converged data center, IBM has cozied up even further to networking contender and major Cisco rival Juniper Networks with an OEM arrangement that will enable IBM and its partners to resell Juniper gear branded as IBM. IBM is quick to point out that it has and will continue an existing relationship with Cisco to resell the market leader’s networking equipment, but considering that Cisco is pushing its entry-level server as the best complement to its own product stack, one wonders how strongly IBM will be pushing Cisco gear when it has its own servers to worry about.

Likewise, Hewlett-Packard is stepping up the networking aggression with its ProCurve business. HP is putting its full market muscle behind ProCurve, which for many years has operated as a kind of second cousin in the company’s product family. But now HP is pushing networking gear hard, wooing partners and slowly stealing some share away from Cisco. Cisco has taken notice, with CEO John Chambers recently proclaiming that the company “will not lose” any business to ProCurve and instituting, according to some partners, a pricing match in competitive deal situations. Cisco discounting to win against a lesser rival? That’s a new one, but it underscores how ruthless things have become in the data center space.

Speaking of ruthless, a solution provider that partners with both Cisco and HP recently attended an invite-only event with HP CEO Mark Hurd. And he was astonished at the tenor of Hurd’s comments.

“All he did was trash Dell and Cisco, and now he’s hell-bent that we not deal with Cisco and bring ProCurve up to speed,” the partner said, likening what he’s heard from CEOs of late to boys on the playground flexing their muscles and bragging about how strong they are.

At the end of the day, he said, all this blustering is way premature. Cisco isn’t going to overtake or come close to nipping at the heels of HP or IBM in the server space for now, nor does Cisco have to fear these two companies on the networking front. Maybe several or years down the road as the data center convergence trend matures, but not now.

Solution providers, meanwhile, have to sell on value to the customer.

“I believe, for us, we’ll sell the best solution out there because we owe that to customers, no matter who makes it and no matter how much these guys hate each other,” the solution provider said. “Manufacturers need to create great products because we don’t sell based on name tag.”

What do you make of the hardware players’ war of words?

Cisco, IBM, HP Data Center Battle Heats Up

Carolyn April

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