Why Cisco Cius Survives While HP's TouchPad Fails

Competition between HP and Cisco has reached epic heights in the past few years, from data center wares to tablets. Here's why Cisco Cius survived even as HP pulled the plug on its TouchPad tablet.

With the TouchPad experiencing one of the shortest product lifecycles in IT in the last few years (some argue the Microsoft Kin had a shorter lifespan, but it did get a temporary resurrection), analysts are pointing the finger for its untimely death at a major switch in HP’s strategic focus, product launch delays and confusing marketing. With the TouchPad officially on the chopping block seven weeks after launch, what’s in store for other business tablets, most notably the Cisco Cius?

The simultaneous announcement that HP would be selling off its PC unit really shows a difference in the vendor’s focus since the days of Carly Fiorina and Mark Hurd, both of which were focused very much on the PC business. Current CEO Leo Apotheker, however, is a different kettle of fish, said Charles King, principal analyst at Pund-IT. King noted that Apotheker is a data center and software guy, and with terrible sales of the TouchPad in the first few weeks after launch, there was clearly a willingness to abandon the product.

“Certainly patience wasn’t the order of the day,” King said.

According to Rob Enderle, president and principal analyst of Enderle Group, HP’s acquisition of Palm delayed the release of the TouchPad. Designed to compete with the first generation of the Apple iPad, by the time it hit the market in July, it already seemed out of date and the consumer market had already spoken. Meanwhile, other tablets being released right now were designed to compete with the iPad 2.

Mixed marketing messages also may have contributed to the early demise of the TouchPad, Enderle said. Was it a consumer tablet or a business tablet?

“The TouchPad was kind of a mixed beast. It didn’t have a lot of business attributes to it. The advertising was clearly focused on the consumer. It got lost,” Enderle said.

It seems clear that mistakes were made, but what does this mean for business tablets entering the market, most notably one of HP’s biggest rivals, Cisco and its Cius tablet?

It’s likely to be good for Cisco, said Michelle Warren, president of MW Research & Consulting. Although there has been a lot of iPad adoption by executives in the business world, IT departments are struggling with managing and securing the devices. They’re looking for an alternative, and the Cisco Cius, which was designed specifically for enterprises in mind (Cisco’s own messaging is not aimed at the consumer at all), is getting some notice. Warren said the Cius is becoming a popular choice, even though it hasn’t even launched yet. When the Cius does launch, it will have one less competitor in the business tablet space, and it’s unlikely Cisco will drop the Cius product line, she said.

“There is a need for it in the enterprise space,” Warren said. At the very least, it was designed for enterprise apps and will be easier to manage and secure.

However, the question regarding all tablets that sell at or above the iPad's price point is whether they can be viable in an Apple-dominated business, King said. There is likely more leeway for business tablets like the Cius, he added.

“Apple is very clearly consumer-focused, although the company insists the iPad and iPhone are ready for the enterprise. I think that’s arguably incorrect, but it may have been a problem with the TouchPad because HP was trying to market it as being used by both businesses and consumers,” King said.

To its credit, Cisco has been very clear about its intentions for the Cius, he said. Its primary strengths are in enterprise computing and collaboration.

“The environment right now for tablets is extremely challenging, but I think Cisco is obviously in a place where they’re working very hard to curtail costs and reduce red ink,” King said. “If the Cius was really bleeding money, it could be destined for the boneyard, but I think what the company has done to date, at least, is get rid of those products that weren’t within the purview of its enterprise focus, like getting rid of the Flip and some of its other consumer-centric product areas. I think the Cius probably resonates enough with the company’s overall enterprise-centric mandate that it would make less sense for Cisco to put down production on that than it would on something on the more consumer-centric side of the business.”