HP Plans To Drop $2.7 Billion On 3Com

Here’s another big buy from HP. The word on the street is that they plan on buying network gear maker 3Com. Why? This is what their press release said:

This combination will transform the networking industry and underscore HP’s next-generation data center strategy built on the convergence of servers, storage, networking, management, facilities and services. The resulting business outcome will help customers simplify the network, deploy a unique and innovative edge-to-core network fabric for the enterprise and improve IT service delivery capabilities, all delivered with best-in-class price-performance.

“Companies are looking for ways to break free from the business limitations imposed by a networking paradigm that has been dominated by a single vendor,” said Dave Donatelli, executive vice president and general manager, Enterprise Servers and Networking, HP. “By acquiring 3Com, we are accelerating the execution of our Converged Infrastructure strategy and bringing disruptive change to the networking industry. By combining HP ProCurve offerings with 3Com’s extensive set of solutions, we will enable customers to build a next-generation network infrastructure that supports customer needs from the edge of the network to the heart of the data center.”

This must be a shot across the bow at Cisco who recently announced a server product with very strong networking abilities. The potential loss of server income to Cisco must have freaked HP out. Thus they went out and got 3Com as HP must have come to the conclusion that they can’t compete against Cisco as they stand right now with their ProCurve stuff. 3Com was pretty much on life support anyway having falling for being the king of networking in the 1980’s and early 1990’s (3c503 or 3c509 network cards anyone?),  so HP spending $2.7 billion to scoop them up was easy.

The question is, will it work out? The jury is out on that one.


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