As 2008 was about to close, Cisco Systems (NASDAQ: CSCO)CEO John Chambers told Rob Lloyd, one of his most trusted lieutenants, to “take the gloves off” when it concerned HP (NYSE: HPQ) in the market place.
Cisco was about to enter unchartered territory, as it never competed head-to-head against a US$110 billion computing giant before. How would Cisco compete with HP? The speculation in the marketplace was that it would be blade servers.
But it’s not Cisco’s style to compete with a simple point product for the data centre.
It would have been the equivalent of entering a gun fight with a knife. Cisco’s answer came in the form of its Unified Computing System (UCS), a next generation platform that unites computing, networking and storage access along with virtualization resources into one system for the modern data centre.
What UCS did more than anything else was get the channel excited during one of the worst economic times in history.
“There’s no one silver bullet that will immediately start a turnaround in customer business. From what I’m seeing there’s a very strong focus on the customer to reduce cost quickly and at the same time improve productivity; meaning doing more with less people.
Unified Computing speaks in a major way to this and it plays well in the core business we are in,” Zarek said.
What was even more remarkable about UCS was that it brought together some of the top vendors in partnership with Cisco. Vendors such as Accenture, BMC Software, EMC, Intel, Microsoft, Red Hat and VMware all signed on to help boost the market adoption of UCS.
Lloyd, as the head of worldwide sales for Cisco Systems, should be credited with getting all these vendor partners on board. He was instrumental in getting all these vendors on the same page, as many of them had different agendas than Cisco.
But the one vendor he would not get on-board would be HP. Cisco and HP were great integration partners.
The relationship was in trouble early in January as HP’s ProCurve division was put in a position to compete with Cisco products. In the past, ProCurve provided edge routing, while Cisco maintained the core data centre switching.
When ProCurve started offering a series of switches for the data centre, suddenly Mark Hurd, HP’s CEO, was most likely scratched off the Cisco Christmas card list.
HP responded by telling the channel that customers will see many holes in Cisco’s UCS strategy and blade server offering. HP even dubbed the Cisco offering a “Hotel California” in a reference to the classic Eagles song, and the lyrics “you can check out any time you like, but you can never leave.”
More sparks flew when HP and Microsoft forged a unified communications alliance.
Don Proctor, senior vice-president of the voice technology group at Cisco, said HP and Microsoft want to take their unified communications business direct and away from the channel. This statement surprised many in the IT industry.
Lloyd, the one-time Cisco Canada president, backed up his co-worker by saying HP’s approach towards collaboration will be direct, in his opinion.
“Microsoft was saying for a year that the network didn’t matter and now they have a partnership with a networking provider. They picked the wrong partner. I found it interesting that Microsoft has found the network, but the HP alliance will lead to little value for unified communications for Microsoft, the same way as it did through the Nortel partnership or with Siemens.
“We think we’re the best company in networking. We shall see how it goes and I’ve talked to the channel and they’re pleased with the level of innovation we have and they’re loyal to Cisco,” he said.
The battle between HP and Cisco will continue as Lloyd draws a line in the sand. The rivalry will only become more intense, but it’s clear the University of Manitoba graduate will hold his own.
If you look at Lloyd’s career track record, it’s nothing short of impressive. For the past 15 years, Lloyd has managed the majority of Cisco’s worldwide business in Canada, Europe and Japan. Combined, these regions accounted for more than half of Cisco’s total revenue. Under Lloyd’s leadership, total revenue in the U.S. and Canada region grew from $12.5 billion to $22 billion over three years.