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With Cisco's acquisition of TANDBERG, and its own acquisition of 3Com now complete, HP continues to set the stage for its competitive alignment vis-a-vis Cisco and announced at InfoCom its plan to OEM software from Vidyo to create a complete video conferencing product portfolio for rooms and PCs.

The new video product line breathes a shot of seriousness into its otherwise stagnant HALO Telepresence offer, something that several other analysts agree on. However, one analyst in particular (Wainhouse) went too far in assuming that once HP OEMs the Vidyo line, it will be the end of the HP Enterprise Services (formerly EDS)-Polycom relationship. Nonsense.

HP's problems in video conferencing and telepresence markets are not about product. One thing I know about Systems Integrators and managed services organizations like HP Enterprise Services - they are more loyal to their customers than they are to their equipment divisions. These services organizations have large teams skilled in selling and supporting the market leading vendors equipment as part of their solution. Adding the OEM offering will be totally dependent on what sales HPES can actually generate. My sense is that customers will choose Polycom product and HPES services and HPES executives will do whatever they can to make sure that HPES services are always part of the customer purchase equation regardless of the endpoint brands they may choose - even if HPES sells them.

HP is still missing an enterprise channel

Although a positive step forward, HP will have to address its weakness in channel somehow. Cisco has defined its dominant position in telepresence and video conferencing by acquiring the leader in the duopoly market (PolyBERG), but not before experiencing the limit of what their direct sales force and sales champion John Chambers can actually achieve. Cisco bought TANDBERG for the channel.

HP reached its direct sales limitation shortly after launching the HP HALO business and has done little serious innovation since except engage with TANDBERG to enable some mechanisms for interoperability that customers no doubt were insisting on.

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