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HP Shakes Up Market With 3Com Acquisition

Networking vendor HP has announced a definitive agreement to purchase 3com. The $2.7 billion purchase is expected to close in the first half of 2010. The deal will bring 3Com, TippingPoint and H3C into the HP stable, as well giving the company greater depth in the Chinese markets. The acquisition is transformative for HP and 3Com. Whether it is transformative for the networking market remains to be seen.

Networking vendor HP has announced a definitive agreement to purchase 3com. The $2.7 billion purchase is expected to close in the first half of 2010. The deal will bring 3Com, TippingPoint and H3C into the HP stable, as well giving the company greater depth in the Chinese markets. The acquisition is transformative for HP and 3Com. Whether it is transformative for the networking market remains to be seen.

While Marius Haas, HP ProCurve Networking senior vice president and general manager, and Ron Sege, 3Com president and chief operating officer, both spoke about how this acquisition will bring big changes to the networking space, it is unlikely to do more than mix up the competitive landscape a bit. It will certainly be a big change for HP and 3Com/H3C, but the networking space is continuing unabated. The campus LAN is still locked up by Cisco and there is no sign of anything in the near term shaking up that market. In the data center, however, the market is much more fluid, and that is where Cisco does not dominate. Cisco has articulated a sweeping vision with Data Center 3.0, including servers and a unified fabric.  A joined HP/3Com has all of the components to be a threat to that vision, including components Cisco lacks, such as SAN hardware and the advanced management software needed to orchestrate today's data centers.

Ultimately, the key to the success of this acquisition will ultimately be how quickly HP can integrate 3com's products -- as well as the personnel and teams that support those products -- into the fold. Enterprise customers seeking out the one-stop shopping that HP will be able to provide are looking for more than the same logo everywhere. They will expect every component that HP sells to integrate seamlessly.

While there is arguably a great deal of overlap between 3Com and HP/Procurve products, particularly in the SMB market, the acquisition of 3Com fills in a number of large holes in HP's product line. This is most notable in the data center, where HP has lacked a core router/switch. H3C, which began as a partnership with Huawei, and is now wholly owned by 3Com, bridges that gap in the network core. The S12500 and  SR6600, which debuted in May, 2009, compete directly with Cisco's Nexus 7000, 5000 and Catalyst 6500 network core products.

H3C designed and built their core and data center switches from the ground up, which means they weren't shackled by existing hardware and designs. Steve Schuchart, Principal Analyst with Current Analysis notes "3Com/H3C refreshed its datacenter and core product line in May. All of H3C's products are new. 3Com's S12500, 3Com's core switch stacks up against the Catalyst 6500, Nexus 7000, which gives HP Service something other to sell than competing products." In addition, 3Com brings with it the TippingPoint intrusion prevention appliances and their corresponding vulnerability research teams, filling out security offerings.   View Full Bio

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