Cisco is ending its relationship with HP as a Cisco Certified Channel Partner in a move that will open the floodgates for full scale competition between the two firms.
It's hardly surprising after a year in which both Cisco (NASDAQ: CSCO) and HP (NYSE: HPQ) announced multiple competitive offerings that encroach on each other's traditional space.
"We are taking this action to be transparent to both partners and customers -- we will compete with HP for future business," Keith Goodwin, senior vice president of Ciscos Worldwide Partner Organization, said in a video message explaining the transition.
The partnership will formally end on April 30.
Goodwin noted that over the last few years, Cisco's relationship with HP has changed, as the companies have moved from being partners to having conflicting visions. The Cisco Certified Channel Partner designation is significant, in that it provides partners with access to product roadmaps and other proprietary information.
"Given the evolution of our relationship it simply no longer makes sense to provide these benefits to HP," Goodwin said.
The end of the Cisco and HP's partnership doesn't necessarily mean that Cisco won't work with HP for the mutual benefit of joint customers, however.
"Our commitment is clear: we will continue to work with HP wherever our customers expect it and where it makes sense for our business," Goodwin said.
Partners are crucial to Cisco's revenue model, accounting for some 80 percent of the company's revenue, Goodwin said.
Over the course of 2009, both Cisco and HP have ramped up key areas of their respective businesses in which they compete with one another. In March, Cisco launched its Unified Computing System (UCS), marking Cisco's entry into the server market. The UCS move put Cisco into more direct competition with HP.
From HP's side, over the course of 2009, the company has ramped up its ProCurve networking business with new security and switching gear. HP is also in the process of expanding its networking efforts by way of the pending $2.7 billion acquisition of networking vendor 3Com.