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 Channel Futures

Leadership


HP-3Com: What’s Wrong (And Right) With This Deal

  • Written by The VAR Guy 1
  • November 11, 2009

As he sat at the Cisco Partner Velocity conference in Paris, The VAR Guy pondered news of Hewlett-Packard buying 3Com for $2.7 billion. Does the HP-3Com combo make any sense? And will Cisco Systems return fire by working more closely with Lenovo? Here are some answers.

First, let’s start with some glaring challenges facing the HP-3Com combo. Alas, 3Com doesn’t have much of a channel story. Many VARs abandoned 3Com’s networking business as 3Com itself abandoned its channel chief in March 2008.

Some pundits say the HP-3Com combo creates a networking giant. But let’s keep the spin under control. It takes Cisco Systems about two weeks to match 3Com’s annual revenues ($1.3 billion).

Still, HP’s ProCurve networking team gets some key technology and international reach from the 3Com buyout. For starters, 3Com has a range of IP telephony, routers, switches, network management, security and wireless offerings. But perhaps more importantly, 3Com’s H3C business unit has a strong presence in China.

As Yankee Group told The New York Times in May 2008:

“H3C is their growth path, not traditional 3Com stuff in the U.S.,” said Zeus Kerravala, network equipment analyst at Yankee Group in Boston. “Their brand has really been tarnished here.”

Calling In Reinforcements?

Now, for the ultimate irony: Lenovo, China’s largest PC maker, is quietly negotiating a potential networking and PC partnership with Cisco Systems. Did Cisco call Lenovo or did Lenovo call Cisco? The answer doesn’t matter. The potential partners have a mutual enemy here in Hewlett-Packard.

Ultimately, Cisco (with a potential assist from Lenovo) and HP-3Com will be locked in a battle to dominate China. That’s the real story here.

Follow The VAR Guy via RSS; Facebook; Identi.ca; Twitter; and via his Newsletter; Webcasts and Resource Center. Plus, check out more channel voices at www.vartweet.com.

Tags: Cloud Service Providers Digital Service Providers MSPs VARs/SIs Leadership

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5 comments

  1. Avatar Presents For Men November 12, 2009 @ 9:56 am
    Reply

    China market is a big market, don’t worry it will be enough for everybody.

  2. Avatar The VAR Guy November 12, 2009 @ 10:42 am
    Reply

    Presents: Sure, China is a big opportunity. But will HP also manage/mend some of 3Com’s broken businesses? The company that invented Ethernet (or at least took it mainstream) has nearly imploded a few times over the past decade… …

  3. Avatar moonjumper's admin blog November 12, 2009 @ 1:52 pm
    Reply

    HP kauft 3Com und Cisco ist an Lenovo dran…

    Wow was geht denn bei HP ab?! Jetzt wollen Sie schon wieder einkaufen. Nachdem ja schon 2008 der IT Dienstleister EDS gekauft wurde wollen Sie nun 3Com kaufen. HP würde durch die 3Com-Übernahme zum weltweit zweitgrößten Netzwerk-Spezialisten hinter…

  4. Avatar Dave Martinez November 13, 2009 @ 9:47 pm
    Reply

    I think even in the US we are going to see a big shift and not just from the HP addition of H3C. I think HP routing and security (TippingPoint), along with H3C are going to turn HP into a strong competitor (but not equal) to Cisco.

  5. Avatar The VAR Guy November 16, 2009 @ 12:36 pm
    Reply

    Dave: Keep The VAR Guy posted in the months ahead. Are you a VAR? Consultant? IT manager? Tell our resident blogger more when time permits and thanks for reading.
    -TVG

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