HP to acquire 3Com (updated)

Combined company will "transform the networking industry"

HP has signed a definitive agreement to acquire 3Com Corporation for approximately $US2.7 billion. The acquisition is subject to customary closing conditions, including the receipt of domestic and foreign regulatory approvals and the approval of 3Com's stockholders, and is expected to close in the first half of calendar 2010.

The combined HP/3Com company will, according to HP, transform the networking industry and underscore HP’s next-generation data centre strategy.

“The transformational combination creates an IT company that can deliver a complete solution built on industry standards and innovative technology through the convergence of servers, storage, networking, management, facilities and services,” an HP Australia spokesperson told Computerworld. “By acquiring 3Com, we are accelerating the execution of our Converged Infrastructure strategy and bringing disruptive change to the networking industry.”

In a media statement, HP US said the acquisition of 3Com would dramatically expand its Ethernet switching offerings, add routing solutions and significantly strengthen the company’s position in China via the 3Com’s H3C offerings.

“In addition, the combination will add a large and talented research and development team in China that will drive the acceleration of innovations to HP’s networking solutions,” the statement reads. “3Com also brings to HP best-of-breed network security capabilities through its TippingPoint portfolio.”

Until the acquisition closes, the two companies will continue to operate independently and there would be no change in the respective company's interactions with partners, according to the company.

“After closing, we will work with 3Com and HP partners to determine how to combine and leverage our collective strengths and best leverage our respective partner ecosystems. Information will be available at that time,” the HP Australia spokesperson said.

The spokesperson did not comment on the likely impact on staff across both companies as a result of the acquisition.

update

Jamie Jin, market analyst, network technologies at IDC said the HP acquisition of 3Com would not have a major effect on the Australian networking market as the company estimated that 3Com would bring only another two to three per cent of the enterprise switch market to HP's existing nine per cent market share.

"The strategy behind the acquisition does make sense," Jin said. "3Com will bring the complete suite of enterprise communications solutions to HP's strong data centre and services capabilities. IDC believes the real attraction for HP is the booming China market where 3Com has a strong presence."

"HP has made no secret of it's views on Cisco's dominance in the networking market and this acquisition will help HP match Cisco's holistic ICT networking strategy which is being driven by server virtualisation, switch and storage consolidation."

Jin said that while the acquisition had a number of benefits the integration of 3Com into HP's business could present a challenge.

"It will be interesting to see how fast and how well HP cou integrate 3Com into it's existing capabilities," Jin said. "Cisco are already several steps ahead of the game and are making inroads into HP's data centre server market."

A webcast on the acquisition is also available.

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Tags HP3ComNetworkingdata centresacquisition

More about 3Com Australia3Com Australia3Com AustraliaCiscoHewlett-Packard AustraliaHPIDC AustraliaTippingPointTippingPoint

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