Alliances Must Be Evaluated Constantly

By Chris Preimesberger  |  Posted 2010-02-19 Print this article Print

Art Canter, president and executive director of the Association of Strategic Alliance Professionals, told eWEEK that in many cases like this, "particulars of proprietary information and processes for working with common customers are negotiated up front" when the alliance is first negotiated.

"Strong, alliance-minded companies-of which HP and Cisco are prime examples-examine, re-evaluate and alter these details throughout the lifespan of a partnership to ensure the alliance meets changing market dynamics," Canter said. "In general, companies that perform the due diligence both up front in the negotiation stage as well as on an ongoing basis should be able to work out an equitable agreement in relation to common customers at the end of the alliance and beyond."

The two companies likely will be providing "cutting-edge solutions" based on their different visions of how to deliver value to customers, he said.

"One of the benefits of an alliance as opposed to a merger or joint venture is that they offer firms greater flexibility in winding down their joint activity when it no longer makes sense given their respective strategies. This is critical especially at a time when corporate strategies shift so frequently," Canter said.

Rob Enderle, principal analyst at the Enderle Group, told eWEEK that this situation is "actually rather common, as firms often cooperate in some areas and compete in others."

"It does create tension, though, and the competition clearly makes it vastly more difficult for the two sides to communicate strategically. Care also has to be taken to avoid the impression of price fixing if the two firms compete heavily in any one area," Enderle said.

Charles King, principal analyst at Pund-IT, told eWEEK that "though vendors often do share information and collaborate on individual or specific solutions, much of the work affected by Cisco's decision lies in areas of system integration. That could put a significant bite on HP's efforts to ramp up their services offerings and possibly create opportunities for competing service integrators."

What are the most acute pain points for customers and channel partners in a spat like this?

"Where to start?" Forrester's Staten said. "The customer gets to witness and live with the finger-pointing. And only after they yell, 'Enough! You two get in a room and fix this!' does anything happen. Thus the customer has to be the big-dollar squeaky wheel.

"Look for IBM, Dell and Oracle to jump all over this. Juniper [Networks] and Brocade from the opposite side."

Chris Preimesberger Chris Preimesberger was named Editor-in-Chief of Features & Analysis at eWEEK in November 2011. Previously he served eWEEK as Senior Writer, covering a range of IT sectors that include data center systems, cloud computing, storage, virtualization, green IT, e-discovery and IT governance. His blog, Storage Station, is considered a go-to information source. Chris won a national Folio Award for magazine writing in November 2011 for a cover story on and CEO-founder Marc Benioff, and he has served as a judge for the SIIA Codie Awards since 2005. In previous IT journalism, Chris was a founding editor of both IT Manager's Journal and and was managing editor of Software Development magazine. His diverse resume also includes: sportswriter for the Los Angeles Daily News, covering NCAA and NBA basketball, television critic for the Palo Alto Times Tribune, and Sports Information Director at Stanford University. He has served as a correspondent for The Associated Press, covering Stanford and NCAA tournament basketball, since 1983. He has covered a number of major events, including the 1984 Democratic National Convention, a Presidential press conference at the White House in 1993, the Emmy Awards (three times), two Rose Bowls, the Fiesta Bowl, several NCAA men's and women's basketball tournaments, a Formula One Grand Prix auto race, a heavyweight boxing championship bout (Ali vs. Spinks, 1978), and the 1985 Super Bowl. A 1975 graduate of Pepperdine University in Malibu, Calif., Chris has won more than a dozen regional and national awards for his work. He and his wife, Rebecca, have four children and reside in Redwood City, Calif.Follow on Twitter: editingwhiz

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