Analyst: Cisco won't smile upon HP-Nortel alliance

A recent network services alliance between Hewlett-Packard and Nortel Networks will likely displease Cisco, according to an analyst.

Dan McLean, research manager of network support and integration services with IDC Canada in Toronto, said HP's current listing as a Cisco Gold Partner may be in jeopardy over HP and Nortel's June 1 alliance announcement.

"How will Cisco react to this? Well you can darn well bet that there are probably some serious discussions going on or have been going on," McLean said.

"I'm not sure what it means at this stage. Typically, when a company is partnered up with Cisco to the extent that HP has been traditionally, there isn't room for any other partnership of this magnitude. I'm not sure if that means that HP becomes of lesser importance to Cisco and more important to Nortel."

Tom Bottensek, alliance development manager for HP's network services operations in St. Paul, Minnesota, said the services department has long supported Nortel products and doesn't push one vendor over another in implementations, including HP's own networking products.

"We take a vendor-neutral approach even with regard to our products. The products have to stand on their own. Obviously this gets tricky at points, but that's how we approach this," Bottensek said.

But McLean said he doesn't believe that.

"When you're typically looking at a Cisco partner in the Gold category, it's usually a company [where] upwards of 80 percent of all of the networking equipment that they sell is Cisco equipment ...That's a pretty heady juggling act to be one of Cisco's top services partners and one of Nortel's top services partners.

"I wonder now, given the relationship HP has with Nortel ... whether HP is going to be able to keep up that volume of commitment (to Cisco). I, in fact, don't believe that they will or can," McLean said.

Having said that, McLean did say the alliance is a good thing for Nortel, particularly because HP gives Nortel a savvy and large network services arm.

"It's critical for a network hardware maker to have that kind of partner," McLean said.

HP's Bottensek said his company's wide presence opens up new markets for Nortel.

"We play in markets where Nortel does not have a support presence, and that allows us to sell them into those markets ... So Nortel's getting another channel for support. They're also getting access to markets they wouldn't normally be able to provide product into," Bottensek said.

"HP is getting a set of back-up services from Nortel. Those services really allow us to provide a higher level of support to our clients."

According to joint HP-Nortel press release, HP will provide complete network lifecycle and support services for Nortel including consulting, design, implementation, post-installation support and monitoring, and financing. The release also states that HP has met Nortel's Premier Service Partner requirements, which McLean said probably conflicts with its Gold Partner status with Cisco.

"This announcement is of less importance in Canada, given that HP's services arm with respect to network services in Canada is probably not what it is around the rest of the globe," McLean said. He said HP's services here tend to be post-implementation without much on the implementation side, so issues of hardware sales have less impact.

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