HP- CISCO Alliance

Executive Summary

Despite HP- CISCO top management intentions and senior and middle management commitment to
renewed alliance stalemate has reached, due to lack of clearly defined ground rules, absence of
detailed plan of action, cultural disconnect in decision making and non availability explicit financial
integration plan.

Hurdles for the formal agreement between the two organizations

Change of management team

Both teams assuming that they are middleware spanning horizontally across Bus and vertically
between top management and sales forces

Alliance team asking BUS to do activities , which might be beneficial to the organizations whole but a
loss proportion to the unit

Multiple interdependencies and potential for conflicts

Incentives stopped for HP sales staff for selling Cisco products

Training needs of managers to understand both technologies

Organizational changes for persona reason of employees

Absence of dedicated sales teams

Product overlap beyond limits

Non availability of performance metrics for individual business unit initiatives

Absence of clearly defined metrics for customer requirements

Alliance team members not meting regularly for lack of interactions

Demand for high level of management skills in the absence of formal authority

Positive points

HP ands Cisco are largest and third largest companies in Silicon Valley

CEOs of both companies are willing for the synergy benefits of alliance

HP has a very strong service network with 65000 employees and Cisco has 1400 technical staff in the
services group

HP has 15000 sales representatives

HP CEO Fiorina joined the Cisco board

HP strategy is very sales driven

Cisco strategy is long term

Good financial performance of both organizations

Two alliance initiatives SWTS and HA are already successful

CISCO customer test driven

Clear understanding of the design,oragnazational structure by both HP-Cisco

Clarity on the business model and technical expertise with both HP-Cisco

Willingness of both to reorganize the structure for better focus

Clear focus of the top management on the alliance growth

Step I
What organization is being discussed?
HP largest and Cisco third largest companies in Silicon Valley formed an alliance, signing for Technology
collaboration, product integration, professional services, and customer support. In February 2002, the two
companies decided to further formalize and expand their alliance by signing a contract that would outline in
greater detail both how they would work together and the strategic initiatives on which the alliance would
focus.
What is the size of the organization?
H P Founded in 1939, HP was one of the more senior Silicon Valley technology companies. The Company
had grown from a small outfit housed in a garage to a global technology and services Company that was a
leader in many areas, including printers and computers. HP formally merged with Compaq in May 2002, the
result was a company that would have had combined sales of almost $82 billion for fiscal year 2001, although
for the first three-quarters of fiscal 2002, sales were down about 13% as a result of the continuing slump in
most high-tech market and chairman of the company

is Carly Fiorina The HP services groupwhich

included 1,400 Cisco-trained specialistswas 65,000 employees strong, comprising half of HPs 130,000
employees worldwide. With sales offices in 160 countries worldwide, HP had 15,000 sales representatives.
CISCO : Founded in 1984, Cisco had enjoyed meteoric growth during the companys first 16 years. Cisco
manufactured and sold networking and communications products, providing a broad line of products for
transporting data, voice, and video over both long and short distances. Ciscos newer offerings included IP
telephony,2 Internet network services, optical networking, and network management software. Ciscos fiscal
2001 revenues were approximately $22 billion, dropping to approximately $19 billion in fiscal 2002.
CEO John Chambers led the San Jose, California-based Cisco. Routers and switches comprised about 70% of
the companys sales, with services bringing in about 17% of revenues in fiscal 2002.
Cisco had approximately 10,000 employees involved with sales accountsincluding account managers,
systems engineers, and operational support staffwith offices in 60 countries. The company employed a
total of 35,000 people.

Who are the case actors or the level of managers called upon by the case to render recommendations?
Bill Russell Vice president of HPs global alliances, Russell joined HPs sales organization in Scotland in
1980. Russell later became general manager of sales for the computing systems group in the EMEA region. In

1996, he moved to California, subsequently heading up several HP product organizations such as technical
computing and software. Russell took over global alliances in February 2002 and Jim Heal The general
manager for the Cisco global alliance, Heal joined HP in the early 80s, first working as a sales rep on the East
Coast where he sold testing equipment and technical computers to AT&T and Bell Labs. He later moved to
the West Coast where he was HPs global account manager for Chevron, and then manager of both the
Informix and PeopleSoft alliances. Heal
has a BS from Purdue. of Hewlett-Packard, Inc. (HP)
Steve Steinhilber Vice president of Ciscos strategic alliances group, Steinhilber joined Cisco in 1999 as
head of Ciscos wireless alliances team before moving into his current role in 2000. Prior to Cisco, Steinhilber
a 1980 graduate of Harvard Business Schoolworked at AT&T and Concurrent Computer in sales and
marketing roles. He also served as a member of the executive team at two startups in ATM switching and
wireless technologies and Mike Thomas The director of the HP strategic alliance, Thomas joined the Cisco
alliances organization in 1996 as head of the IBM relationship. Next he managed multiple teams of platform
partners before being given overall responsibility for the HP alliance. Prior to joining Cisco, Thomas had
worked in sales and product management at Alcatel as well as at several startups.
Are the case actors high-level managers or middle level managers
The actors are high level managers assisted by middle level manger who are supposed to help them in
framing the formal alliance documents for better coordination and execution
Step 2 and step 3
Review the case and make notes
What do you know about the organization?
HP and CISCO largest and third are in alliance for more than five years by now. They have also achieved
synergetic benefits. However both the parties believe that they are not able to capitalize on their full
strengths. The also believe that more formal agreements in the form of contract would benefit the alliance
and they can further improve the business and increase the profitability.

What do you suspect, at this point in time, is the issue that arises in the case?

Change of Management team the

Both the HP and Cisco alliance teams think of themselves as company middleware.

The primary responsibility for the management of the alliance fell on an alliance manager.

Alliance managers asking BUs to do something that, while benefiting the company as a
whole, did not benefitor perhaps was even detrimental toa particular BU.

why should we care about another company HP sales persons selling cisco products which
was not digested by HP

High skill level requirements for the In technology for the joint product development.

Development of joint marketing materialsrequired a sound understanding of both

partners technical capabilities.

The location of the alliance teams in their respective organizations had changed over time
in both companies.

No dedicated alliance sales force.

Alliance teams were pushing to change some of the alliance-related processes. The The
alliance team also had to be committed, which meant being held accountable to certain
metrics

Need for central strategic alliances group than by a BU.

Product/service overlap.

No monitoring of performance with appropriate metrics

Both the HP and Cisco alliance teams agreed that developing a joint business plan and
metrics were critical to the success of any strategic alliance.

no formal authority over either companys executives or sales personnel for alliance

Non availability of

compelling business plan which is important when dealing with BU

heads to address their perceptions with facts, since BU buy-in is critical.

Ineffective sales compensation plan for the sales force

Sales situations that commonly led to disagreements included when a Cisco team was
selling servicesperhaps with another partner that competed with HP, or when HP was
selling a product (their own or someone elses) that competed with Cisco.

What does the customer want? is not clearly defined

When field issues escalate, no procedure in place to sort out.
Sales engagement model needed to be specified for each target market and included in any
formal contract.

HP and Cisco alliance teams did not meet in person on a regular basis, although once every
two weeks the two teams had an hour-long conference call to discuss channel issues.

Governance processes not properly defined.

The business concept in alliance with clear metrics missing.

No formal authority for alliance team members.

Low trust levels among alliance members. .

Incomplete Understanding and influencing his or her own company by alliance members.

Two sides not agreeing on basic business terms.

Considerable time has passed since they began working on the agreement.

People involved in negotiations have changed, and in others, BUs have changed their
strategies.

Cultural disconnect among the alliance members in decision making

Both sides were frustrated in October.

Both CEOs Fiorina and Chambers scheduled for meeting in January,2003

Pressure of the top management on both sides

Summarize the understanding

Executive Summary
Despite HP- CISCO top management intentions and senior and middle management commitment to
renewed alliance stalemate has reached, due to lack of clearly defined ground rules, absence of detailed plan
of action, cultural disconnect in decision making and non availability explicit financial integration plan.
Hurdles for the formal agreement between the two organizations

Change of management team

Both teams assuming that they are middleware spanning horizontally across Bus and vertically
between top management and sales forces

Alliance team asking BUS to do activities , which might be beneficial to the organizations whole but
a loss proportion to the unit

Multiple interdependencies and potential for conflicts

Incentives stopped for HP sales staff for selling Cisco products

Training needs of managers to understand both technologies

Organizational changes for persona reason of employees

Absence of dedicated sales teams

Product overlap beyond limits

Non availability of performance metrics for individual business unit initiatives

Absence of clearly defined metrics for customer requirements

Alliance team members not meting regularly for lack of interactions

Demand for high level of management skills in the absence of formal authority

Positive points

HP ands Cisco are largest and third largest companies in Silicon Valley

CEOs of both companies are willing for the synergy benefits of alliance

HP has a very strong service network with 65000 employees and Cisco has 1400 technical staff in
the services group

HP has 15000 sales representatives

HP CEO Fiorina joined the Cisco board

HP strategy is very sales driven

Cisco strategy is long term

Good financial performance of both organizations

Two alliance initiatives SWTS and HA are already successful

CISCO customer test driven

Clear understanding of the design,oragnazational structure by both HP-Cisco

Clarity on the business model and technical expertise with both HP-Cisco

Willingness of both to reorganize the structure for better focus

Clear focus of the top management on the alliance growth

Step 5
List factual information

Change of Management team the summer of 2002, Fontana was promoted, and Jim Heal
was named HPs general manager for the Cisco global alliance. In February 2002with a
formal contract to expand the alliance now being negotiatedThomas took over as director
of Ciscos HP alliance,

both the HP and Cisco alliance teams think of themselves as company middleware
spanning horizontally across the Bus and vertically between top management and the sales
force

The role of the alliance manager In both HP and Cisco, the primary responsibility for the
management of the alliance fell on an alliance manager. Alliance managers had a developing
a compelling business case and strategy for the alliance, the manager had to understand the
strengths/weaknesses and opportunities/threats of both the managers and the alliance
partners companies.

Thomas explained, About 25% of the time, we need executive team help getting BU heads
to do what needs to be done. At times, the alliance managers were asking BUs to do
something that, while benefiting the company as a whole, did not benefitor perhaps was
even detrimental toa particular BU.

why should we care about another company? The alliance manager had to ensure that
everything necessary was done to motivate the sales force to promote the alliancethe
most important part of which was selling the alliance partners products or services. In the
sales arena, the alliance managers role was the ultimate boundary spanner,.

There were multiple interdependencies and potential for conflicts of interest at every turn.

In technology companies such as HP and Cisco, the alliance manager had to understand
both his own and his partners technologies, given that joint product development.

Because HP was a Cisco reseller and service partner, there were teams in both Ciscos
channel and customer advocacy groups dedicated to interfacing and working with HP.

Development of joint marketing materialsrequired a sound understanding of both

partners technical capabilities.

Organizational structure The location of the alliance teams in their respective

organizations had changed over time. At HP, alliance manager Fontana had initially reported
into the HP marketing organization.

In August 2002, a few organizational changes were made, and Ciscos HP alliance team,
which had previously reported into the technology partners unit, began reporting into the
services partners unit.

One element absent from the HP-Cisco alliance in both companies was a dedicated alliance
sales force.

Processes: Choosing partners Both the HP and Cisco alliance teams were pushing to
change some of the alliance-related processes. The primary motivations for this were
twofold. First, more formalized processes might help save time; in addition, better aligning
the processes of the two companies could lead to a more effective and efficient alliance.

The process undergoing the least change was that of choosing alliance partners. Both
HP and Cisco had fairly stable criteria against which they measured potential strategic
partners

The alliance team also had to be committed, which meant being held accountable to certain
metrics

There had to be an appropriately high level of investment in people, capital, and

intellectual property. A higher level of investment brought additional complexity, which
could be handled better by a central strategic alliances group than by a BU.

There should be minimal product/service overlap.

Ciscos rule-of-thumb was that a portfolio overlap of more than 20% of revenue or a direct
distribution channel conflict made it difficult to be strategic.

Cisco and HP did have some limited product overlap. HPs Pro Curve product line, which
resided in the Enterprise Systems group and overlapped with certain Cisco switches and
hubs, was estimated to bring in approximately $260 million of HPs total $82 billion in
annual revenues. In addition, Cisco offered certain services to its customers, and some
services related to the installation and maintenance of Cisco products were also offered by
HP.

If the business propositionwhich needed to be developed from the point of view of the
customer as well as both partnerswasnt monitored by appropriate metrics

Both the HP and Cisco alliance teams agreed that developing a joint business plan and
metrics were critical to the success of any strategic alliance.

the alliance manager and alliance team had no formal authority over either companys
executives or sales personnel, it was important that everyone agree up-front on the business
model and success metrics.

Non availability of

compelling business plan which is important when dealing with BU

heads to address their perceptions with facts, since BU buy-in is critical.

They need a joint business plan, and a template for each individual business initiative.

Alliance managers sometimes try to boil the ocean. They attempt too much with their
initiatives, which can be counterproductive. Its imperative to work in small agile groups,
staying focused and getting some quick wins, as this builds the momentum necessary for big
wins. But of course all of this needs to be done in the context of an overall strategy.

Several executives on both sides of the partnership believed that joint metrics were critical

At one point, a few salespeople sold a very large dealprimarily made up of Cisco gear
and made their quota. Although this was not a representative deal, it garnered much
negative publicity at HP. As a result, the compensation system was changed in 2001, and
Cisco products no longer counted towards reaching quota; instead, rather than being paid a
commission, sales reps could receive a bonus at the end of the year if they met certain goals.
Both HP and Cisco alliance team members believed that this change had led to a decline in
sales of Cisco gear by the HP sales force. Russell commented on the importance of
developing the right sales compensation plan:

There isnt much debate in HP over whether teaming up with Cisco intuitively makes good
sense, but we have to develop the right metrics and compensation plans to know if what
were doing is paying off for both of us.

The most relevant issue for the HP-Cisco alliance is how the HP consulting services
organization gets measured, because a lot of the Cisco business is leveraged by what our
network consulting people do.

Develop joint rules of engagement so that the alliance was not dependent on any one
individual. For example, he was developing an escalation process that would delineate how
and when sales force

Sales situations that commonly led to disagreements included when a Cisco team was
selling servicesperhaps with another partner that competed with HP, or when HP was
selling a product (their own or someone elses) that competed with Cisco.

What does the customer want?

There will always be field issues since we have some product overlap, but you have to
know when to escalate something and when to try to fix it yourself.

Sales engagement model needed to be specified for each target market and included in any
formal contract.

Both alliance teams had some concern about product overlap, primarily because it was an
ongoing field issue.

HP and Cisco alliance teams did not meet in person on a regular basis, although once every
two weeks the two teams had an hour-long conference call to discuss channel issues.

Governance processes needed to be more formalized.

include a review of performance to date, the status of the business pipeline, key issues to be
resolvedwith a lot of staff work having been done on such issues beforehandand action
items.

Each alliance needs to be run like a business, with its own dashboard and clear metrics.

You can run an alliance like a business even if there is limited formal authority, but you have
to have a clear view of how to measure performance from both partners perspectives.

Because the alliance managers and their team members had no formal authority over the
majority of the people with whom they worked, their jobs were very demanding, timeconsuming, and sensitive.

Developing trust at all levels of the organization.

Past relationship breakdowns can create huge hurdles in the field.

Sometimes negative visibility stems from perceptions rather than reality, but that doesnt
matter. Unfortunately this can result in making decisions based on just one situation, and we
need to fight against that.

Just telling people what to do doesnt work. You have to rely on personal relationships a
great deal.

Alliance manager has to approach meetings with senior executives just as one would
approach any other strategic selling opportunity.

Figure out the executives spheres of influence, which can be particularly tricky in a
company made up of several merged companies.

Finally, both HPs Heal and Ciscos Thomas emphasized that an effective alliance manager
must first focus on understanding and influencing his or her own company rather than the
alliance partner.

Contract had stalled because the two sides didnt agree on basic business terms.

One issue is that some time has passed since we first began working on the agreement.

In some cases the people with whom were negotiating have changed, and in others, BUs
have changed their strategies, so the value propositions have gotten cloudier as a result.

Ciscos Rudolph believed that part of the reason the contract was taking so long to finalize
was cultural. He noted that we are a conservative company and we want to use words like
may and intend to, whereas HP prefers to use shall.

On the HP side, Russell characterized the contract negotiations as having stalled,

commenting that the contract had become unsignable.

Steinhilber noted that the market position of the new HP in the systems integration market
is very important, plus we have some alignment in key market segments that gives us many
areas of possible collaboration in the future. Also, HP has one of the largest groups of Ciscotrained network engineers in the world. HP executives also saw several areas of
opportunity; Russell believed there might be significant new opportunities for the two
companies to extend collaboration in areas such as OpenView10 and UDC (Utility Data
Center solution).

Despite the mutual optimism regarding market opportunities, both sides were frustrated in
October.

CEOs Fiorina and Chambers had a meeting scheduled for January, and both alliance teams
wanted to be ready to they continued their discussion about ways in which the two
companies could break the logjam

HP-Cisco Strategic Alliance Description of the Six Initiatives as of October 2, 2002

Priority 6 : Optical Technologies
The Cisco and HP Optical Solution is a complete IP+Optical solution. It provides service providers who are
engaged in the development and delivery of value-added management, OSS/BSS, and incremental revenue
generating services built on an optical infrastructure
with a network management solution based on HPs Integrated Service Management and Ciscos optical
product portfolio.
Priority 5 : Storage

HP and Cisco provide storage solutions and services that transform storage into a business asset. Cisco and
HP storage solutions are based on interoperability between Ciscos network infrastructure and storage
products and HP storage solutions.
Priority 4 : Utility Data Center
Together HP and Cisco transform data center economies with Service- Centric Computing by providing
virtual provisioning and costeffective IT infrastructure reconfigurability and virtual resource allocation. Utility
Data Center (UDC) is an integrated software and hardware solution that enables virtual provisioning of
application environments to optimize asset utilization, reduce operational costs and increase service levels.
With HP Services handling the design, delivery and support of virtualized datacenters using Cisco networking
infrastructure, the UDC solution creates a flexible architecture that is
less expensive to operate, delivering a significant return on investment.
Prioroty 3 : Mobility/ Wireless Infrastructure
Cisco and HP Mobility Solutions allow mobile professionals to be productive anywhere on the globe,
whether in a hotel room or airplane or at a special event. HP Services develops and delivers joint mobility
solutions that incorporate Cisco technologies like wireless LAN and Aironet cards. HP also uses these
technologies in next generation HP WLAN products. Cisco and HP offer a broad range of flexible IP
communications solutions that maximize employee productivity and deliver a significant return on
investment.
Priority 2 : I P Telephony
Cisco and HP Telephony Solutions, enabled by Cisco AVVID (Architecture for Voice, Video and Integrated
Data), provide a seamless migration to full IP Communications by interoperating with existing systems and
protecting a companys technology investments. With Cisco and HP IP Telephony, companies have the
flexibility to choose from a suite of IP-based hardware and software solutions and
services that scale to meet their needs. In addition, HP Services provides IP Telephony solution services,
support services, and remote monitoring and performance reporting services.
Priority 1: and network management:
HP Open View and Cisco collaborate to create and deliver innovative, customer-driven service management
solutions. HP Open View Smart Service Management for Cisco Environments (SSMCE) is for network
managers who want to simplify management of their growing network environments. Integrating HP Open
View Network Node Manager and Cisco Works, network managers can easily manage configuration and
availability of their Cisco environments through the Web, while supporting the demands of a complex
environment .SSMCE gives companies the ability to fix and identify problems quickly, as well as assess the
business impact of network faults.

Step 6
Proposed solutions with Defense and logic
Five years have gone by, since the alliance formed. The progress of the alliance is not up to the defined
level/to the potential as believed by both teams. This is the high time for the formal agreement. The draft has
to be ready before CEO meet jan-2003.Abscence of clearly defined guiding principle and and ground rules is
causing the conflict, despite the top managements willingness for intervention.

Prepare guidelines and ground rules.

Detailed action plan providing nuts-and-bolts guidance to the conflicts at the formal structure level

Roles ,responsibilities and authority commensurate with accountability for the alliance managers to
be established to act and deliver

Create necessary environment to be established between alliance members, teams, cross functional
teams with in the organization, across the alliance members and inter group members of HP and
Cisco

Periodic education, training and development exposure t the alliance managers and team members
to cope with the demanding needs such as developing strategy for sales, technology and
dissemination of the strategic process upwards and percolation of the same down the line

Defining responsibilities of cross functional teams and fixing the boundaries for the functional and
administrative authority

Alignment of Business unit goals with HPs, CISCOs and alliance organization to avoid conflict at the
execution stage

Periodic training to the sales force, technical support team to deal with joint products from the
customer point of view

Organization restructure has taken place. People involved in the initial stage during negotiations have
changed. Strategic priorities of Bus have changed. Merger of HP with Compaq added to issues.
Operational philosophies have also changed.

Reorientation of the teams is necessary to understand and assimilate the changed scenario

View of the earlier members can be taken to understand the genesis of the alliance for the
benefit of the new members as to know what issues were discussed , debated and agreed upon

Resolution of conflict between BUs and alliance organization

Provision of dedicated sales force for the alliance organization to cater to the needs of customer
requirements and also in line with individual organization and Bus goals

Utilization of channels of communication established at levels

Effective use of data and its analysis for the decision making on both short term and long term
view

Alliance to adopt the best practices of CISCO in strategy and HPs sales driven competence- a
tactical approach. Synergy of this shall happen for achieving the intended goals of the alliance.

Learnings of successful models of HP and CISCO with other alliance partners shall be also
input for the benefit of the HP-CISCO alliance

The criteria for the alliance partners have to be same as HP and CISCO have different approach and
expectations for the alliance.

CISCO prefers to have minimum generation of revenue to the tune of $ 500 m and half the stake for
both partnerships where as HP client centric and would like to add the value to the customer, merge
this goal.

Emotions in the alliance are to be kept away for the professional approach. This needs to be aligned
with CISCO philosophy of higher manpower productivity where individual performances have to at
the best (high level of individual performance are associated with lot of emotions)

HP feels the absence of Performance metrics and CISCO makes it further clear by preferring to have
accountability at the CEO and SVP levels. Both mean the same and expressions are different. This is to
be aligned and goals have to be charted and documents at the highest level to bring in commitment.

Business models to be established for the performance monitoring of alliance, Bus and individual
organizations performance (as it may be affected by the aggressive alliance product range and overlap
with individual products)

Both members of the alliance are believing in having the mutually agreeable business plan keeping in
view of the BUs are critical in the execution stage. This needs to be addressed. Cultural disconnect of
HPs formal approach to CISCOs informal approach in designing and developing products needs to be
addressed.

It is surprising to note that HP, tactical and sales driven in sales deployment, yet believes in formal
design approach where as CISCO has a long term and strategic approach in sales deployment but
believes in informal approach in design and development of products. This difference approach can
be taken to a great advantage and is a good platform for co-creation through co-opetition. Joint
metrics to be developed with transparent Performance management system in place. Trust level
among team members would improve with actionable points.

Sales have been the grey are for success of alliance. Change of sale quota system for selling CISCO products
by HP sales force is a set back to the trust levels off alliance members

HP has large sales force where as CISCO has minimum manpower but highly skilled with technical
back up CISCO is able to effectively use the HP networking. This is causing discomfort in HP circles.

This can be overcome having a common and joint metrics for the sales force of alliance. This sales
force can focus on individual products as well

The fear of loosing/or gaining less advantage of the synergistic benefits is the negative force acting.
This needs to be eliminated joint performance metrics. If not addressed this might turn into the
danger of breaking the alliance.

Governance of the alliance organization is an issue to be addressed

Periodic meetings at field level, team leader level and alliance manager levels to be established with
review mechanism in place by the at least one level up managers

Formal authority and responsibility shall be commensurate with accountability.

Level and frequency of interaction between alliance members and BUs to established with effective
communication channels.

Integration of financials explicitly. This is very critical factor for sustainable business proportion.
Both alliance partners should feel the equity, other wise discomfort and distrust begin and may
finally lead to stalemate. If not addressed in time it might eventually break the alliance

Defining ground rules

Formal design of alliance
Organizational structure
Processes: Choosing partners, Developing business model/plan and metrics and sales force compensation
Step 7
Defend solutions
Alliance initiatives are clearly defined with maturity levels of them. Based on the maturity levels they can be
prioritized. Alliance has seen fair amount of success in the market by providing unique solution example
being HA specifically and SWTS.
By defining proper guideline principles and setting basic ground rules as discussed above can prove very
successful. Details action plan s with objective metrics and their transparent implementation will result in
mutual trust. Alignment of the individual strengths in R&D, technology, sales and customer reach is essential.
Explicit financial integration and their effective communication at level of management and operation is very
critical
Managers interventions at the CEO level followed by structure reorganization to ensure the adaptability of
the team members could be combined strategy for effective alliance progress.
Step 8

Write the case analysis

Case Analysis H P Cisco Alliance

Executive Summary

Despite HP- CISCO top management intentions and senior and middle
management commitment to renewed alliance stalemate has reached, due to lack of
clearly defined ground rules, absence of detailed plan of action, cultural disconnect in
decision making and non availability explicit financial integration plan.
Problem statement:

Summary of the problem:

Despite being convinced and committed for the

alliance, HP, the largest and

CISCO the third largest Silicon Valley IT Company, their alliance organization could not reach to a formal
agreement on how to move ahead with the progress of the alliance origination even after five years of
association, despite their success as alliance partners with themselves and partners with other companies
HP the largest and Cisco third largest Silicon Valley IT Companys f formed an alliance in early 1997 for that
focused on Technology collaboration, product integration, professional services, and customer support. It
took five years for the two companies to realize that they can further formalize and expand their Alliance
activities to gain synergistic advantages for both companies. The timing coincided with HP Compaq merger
and the alliance agreement further delayed by 6 months. Finally it started taking shape in October 2002. The
top managements of both organizations are willing and committed to the alliance. To this effect that CEOs of
both companies are expected to meet in Jan-2003.

Many events have taken place in five years since the alliance inception
HP and Cisco have excellent examples of alliances for them with other alliance partners
Widely respected technology companies in the worldHP and Cisco both appeared to be very
desirable partners. Indeed, both management teams believed that forging a stronger, more formal
alliance would produce benefits for both sides. Like all partnerships, however, the strategic alliance faced
some challenges, and it was the job of the alliance teams to solve these issues to the best of their ability. As
HPs Russell and Heal prepared to meet with Ciscos Steinhilber and Thomas, they made some notes about
actions they believed the two companies could take to create an even more productive alliance in the future.