H-P Recruits Alcatel for Cisco War

Cisco forged its own technology integration deal with Alcatel way back in 1997, although Cohen feels that H-P's move could spell bad news for the networking giant.

"This is another effort from H-P to establish footprint within Cisco's customer base, such as the carriers, and aggressively pursue a new market opportunity for the carriers," he wrote.

There has even been speculation that hardware giant IBM may join forces with Cisco's networking rival Juniper(JNPR Quote). For IBM, a deal to sell Juniper networking gear would mark a further step away from its one-time buddy Cisco and could boost its data center revenue.

Networking giant 3Com(COMS Quote) has also cranked up the pressure on Cisco, recently expanding its Chinese H3C subsidiary into the rest of the world.

Even switch maker Voltaire(VOLT Quote) is getting in on the act, overhauling its product strategy in the wake of Cisco's entry into the server market.

In its recent fiscal third quarter, Cisco saw its sales slip more than $1.5 billion compared to the prior year, although the firm remains the dominant force in networking and foresees new opportunities in areas such as home entertainment.

Cisco shares fell 21 cents, or 1.1%, to $18.99 Thursday.