Cisco ends direct contract with Dell

Cisco ends direct contract with Dell

Dell has incurred the wrath of yet another major vendor partner upset over its plans to extend its product lines beyond the PC and server.

Cisco has decided to end its five-year direct relationship, in which Dell purchased various Cisco connectivity products to resell with its computers. While neither vendor is prepared to comment on why the relationship was terminated, reports suggest that Cisco executives were concerned about Dell's move into the networking space.

In late July, Hewlett-Packard pulled a similar move on the PC vendor. The new HP created an opportunity in the market where certain lines of handheld and imaging products would be discontinued. The merger prompted speculation, and eventually confirmation, that Dell was planning on making its own moves into PDAs and printers either through acquisition or through products of its own branding.

Such plans forced the hand of HP, which informed Dell it would no longer be supplied with printers, digital cameras, PDAs or other HP imaging products in a direct relationship. Analysts said the move would cost HP in terms of product sales, but would not be a major problem for Dell, which would work with channel partners for customers that still wanted HP peripherals with their Dell computers.

A spokesperson for Cisco Australia said the impact on Australian operations would be minimal.

Dell Australia spokesman Rob Small said the direct relationship between Cisco and Dell in the US did not apply here in Australia. "All that has happened is that their direct relationship in the US has been stopped," he said. "In Australia, we buy Cisco products, just as we'd buy 3Com or Nortel products, through distributors. In essence we are a Cisco reseller."

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