Recession makes Cisco and HP for allies to pass rivals

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Cisco Systems Inc. and Hewlett-Packard Co. are increasingly colliding as they seek to increase their income during this recession. Cisco is taking advantage in a key market: telepresence, videoconferencing technology, quality, some companies are buying to reduce travel costs.

Last month, Cisco got an agreement with hotel chain Marriott International Inc., one of HP's traditional customers. to use their telepresence systems in 25 of its properties.

Marriott had a similar agreement with HP last year, but some hotels protested having to pay for products from HP, which cost nearly $ 120,000 each, plus a monthly service fee of $ 9900. Cisco convinced them to offer a lower price, said an informed source.

A Marriott spokesman said they have a relationship with HP, but chose the Cisco telepresence technology to offer customers the widest range of options reunion.

Cisco has "won almost all accounts of reference of HP," said Marthin De Beer, vice president of Cisco technology that monitors the video.

Conflict between HP and Cisco

The growing competition for telepresence, which uses cameras with advanced technology and high-definition televisions to simulate conference rooms and eye contact is a small example of the conflict between HP and Cisco.

Until recently, the two companies had been more allied rivals. HP makes computers for companies, among other things, while Cisco makes networking equipment that connects computer systems. Last year, HP sold about U.S. $ 1,000 million in networking equipment to its customers, according to calculations.

However, the recession has put the two companies on a collision course as they struggle to raise revenue amid an environment of lower corporate expenses. HP has stopped emphasizing the Cisco product and has increased its investment in network equipment sales. At the same time, Cisco has developed its own systems for servers, which represents a direct assault to the core business of HP.


Cisco is gaining market share in the market for high-tech videoconferencing. In the first quarter, Cisco sold 67% of the 520 telepresence units which were sold in the world, compared to 51% of the 235 units sold during the same period the previous year, as estimated by Wainhouse Research. the participation of H-P fell 11% to 10%.

In response, HP is revamping its business videoconferencing. In May, the company moved to its video business unit of its printers to your network drive. It has also begun to sell video products from other companies. The goal is to "align our assets so we can compete the best way," said Marius Haas, head of networks and HP.

Telepresence is a tiny part of the technology market. Wainhouse Research estimates that total worldwide sales of these systems are below $ 500 million annually. However, it is one of the few technologies that have benefited from the decline, growing 30% compared to last year. [ Recession makes Cisco and HP for allies to pass rivals  ]