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HP's 3Com Buy Adds To Its SMB Networking Arsenal

Consolidation is the watchword in the data center marketplace. Companies are collapsing their network, storage, and server equipment into single-function devices. The consolidation theme also applies to vendors, as one noteworthy networking supplier leaped into HPs arms today.HP plans to pay $2.7 billion to purchase 3Com and eventually fold its networking products into the HP ProCurve business unit. The move could be the first of many in the highly competitive, rapidly changing data-center equipment market.

At one time, 3Com was one of the networking industrys leading suppliers. However, the vendor has muddled along the past several years unsuccessfully trying to find a viable market niche. With the marketplace moving to new integrated data center devices, 3Coms future was in doubt because the company did not have sufficient clout to be anything but a bit player in the next market phase.

Jumping into HPs embrace may be a best-case scenario for 3Com. While the company has not been able to garner more than a few percentage points in the overall networking market, 3Coms products were well received among small and medium businesses. Customers could have been growing nervous lately as market shifts were casting doubt on the long term viability of the vendors product line. Their worries should now be assuaged.

While the 3Com products are probably nearing the end of their lifespan, businesses have a clear migration path. HP is solidly entrenched in next-generation data center products and should be able to move current 3Com customers to it.

Even if 3Coms future is now clear, however, the fates of networking companies such as Avaya, Brocade, Enterasys, and Extreme Networks are not, which has to be a concern to their small and midsize business customers.

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