3/2/2010 -- It's been a long time coming, but Cisco Systems Inc. and Hewlett-Packard Co. have finally unfriended one another, reseller-wise.

Cisco last month declined to renew HP's reseller contract. The immediate upshot, industry watchers say, is that HP can no longer resell Cisco gear.

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Over the last few years, HP has positioned its ProCurve networking unit to compete more directly against Cisco in the enterprise. More recently, ProCurve has attacked Cisco in the SMB segment, as well.

On top of that, of course, there's HP's pending acquisition of networking giant 3Com, which competes with Cisco.

Cisco isn't an entirely blameless party, either. Last year, it took dead aim at HP -- to say nothing of steadfast partner IBM Corp. -- in the commodity server segment, announcing its Unified Computing System (UCS), an ambitious effort to develop and market a Cisco-branded line of datacenter compute resources.

The breakup of Cisco and HP was seen by many in the analyst community as long overdue.

"[T]he relationship has been on thin ice since Cisco's decision to enter the x86 server market," wrote Steven Schuchart, an analyst with market watcher Current Analysis.

Schuchart saw HP's bid to acquire 3Com as the proverbial last straw. "HP is in the process of purchasing 3Com and the two companies are clearly competitors," he noted. "The latest move by Cisco to not renew HP's systems integrator contract is simply the tombstone on what was already a dead relationship."

Nor does Schuchart see Cisco's decision as retribution -- deserved or undeserved -- for HP's planned acquisition of 3Com. The simple fact of the matter, he said, is that HP's bid to acquire 3Com, as well as its agenda with ProCurve, helped exacerbate a longstanding conflict of interest.

"[A]s a Cisco Certified Channel Partner, HP had access to Cisco's product roadmaps. That would be a huge advantage for HP and it is clear that had to end," he said.

While HP customers who prefer to purchase their Cisco networking gear through HP are undoubtedly at a nonplus, the dissolution of the HP-Cisco partnership won't exactly send a shockwave through the networking segment, Schuchart said.

"Everyone knew this was coming and the effects will only really be felt at Cisco and HP," he concluded. --Stephen Swoyer