News Analysis - HP Draws a Line in the Sand with 3Com Acquisition: Game on Cisco

On November 11th, HP acquired 3Com for $2.7 billion USD effectively drawing a line in the sand.  HP had long been one of Cisco’s biggest resellers until Cisco moved into HP’s data center server space earlier this year when it introduced the Unified Computing System.  Since Cisco made the clear decision to compete against HP in the server space, HP has made moves to develop and improve its enterprise networking products. HP and its channel partners are pushing ProCurve gear over Cisco, and the game is on.

“John Chambers (Cisco) should be concerned. HP is one of the only competitors that has a chance of making a significant dent in Cisco’s enterprise networking dominance”, said Mark Tauschek, lead analyst for Info-Tech Research Group.  “We hear a lot of our clients talking about HP as they are considering LAN and WAN infrastructure refreshes.”

There is good reason for HP ProCurve’s rise in mindshare; its networking products are good enough for most enterprises, priced very competitively, and carry a lifetime warranty.  With the 3Com purchase, HP ProCurve not only strengthens its product line, it gives it a strong position in China and Asia-Pacific due to 3Com’s joint Venture with Huawei – a market where Cisco has struggled to gain market share due to its premium pricing.

“The HP purchase of 3Com is HP’s way of saying ‘no more Mr. Nice Guy, Cisco,’” said Tauschek.  “The game is on, and with the purchase of 3Com, HP ProCurve is poised to make a significant impact on the enterprise networking market in the next 3-5 years.”

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