HP launches trade-in promotion to poach Cisco customers

Hewlett-Packard on Monday launched its most aggressive assault on networking giant Cisco: A trade-in promotion to rip and replace existing gear.

HP's promotion, dubbed "A Catalyst for Change" to play off the brand name for Cisco's switches, is aimed at networking gear that will be nearing the end of its useful life at the end of 2011.

Under the terms of the trade-in promotion, HP will shave 20 percent off the list price of its A-Series and E-Series switches for customers who trade in Cisco equipment. The minimum deal size is $100,000 list price. Specifically, the savings requires a trade-in of Cisco Catalyst 2960/S Series, 3560/E Series/X Series, 3750/E Series/X Series, 4500 E Series, 4900 Series or 6500 Series, as well as Cisco Nexus 5000 Series or 7000 Series switches.

HP will also provide migration services from Cisco gear and guarantees interoperability.

In its literature, HP said it is trying to "break free from the Cisco lock-in," but be sure to read the fine print.

While it remains to be seen whether this pitch will find any willing participants, it's likely that Cisco customers may evaluate HP's wares. One thing is certain: Hardware vendors will complete on price if they can sell more of the technology stack. If HP can break into Cisco's upgrade cycle it can squeeze its rival's profit margins. HP has a similar program aimed at Oracle Sun customers as does IBM.

Cisco Vice President Enterprise Switching, Rob Soderbery, said:

Many competitors offer trade-in programs. Customers and partners have shown that they value sustained investments in innovation and in an architectural approach that extend beyond point offerings or incentives. Consistently investing in R&D at levels above 10% of revenues – including investments across the Catalyst portfolio in 2010 - tells you where Cisco is focused.