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3Com acquisition confirms HP-Cisco battle for China

Hewlett-Packard's 3Com acquisition heightens the HP-Cisco battle for the enterprise networking market, particularly in China. With the new buyout, 3Com's data center core routing and switching may make HP the No. 2 vendor.

Hewlett-Packard Development Company, L.P. (HP)'s 3Com acquisition may pose the most serious threat Cisco has ever faced in the enterprise networking market, heightening the HP-Cisco battle.

If the $2.7 billion acquisition of 3Com announced Wednesday is approved by regulators, HP-3Com will have formidable geographic and technological strategies with which to battle Cisco and to address the demand for these converged networks.

HP-3Com technology strategy

On the technology front, the company would have what executives called an "edge-to-core" portfolio, complete with data center servers to take on Cisco.

"One of the biggest [concerns] we've had from customers has been 'We like your edge product, but we need you to be able to play across our entire networking infrastructure,' and this acquisition enables us to do this -- adding core switching, routing and security products to us," said Dave Donatelli, EVP and general manager of enterprise servers and networking.

HP networking senior vice president Marius Haas promised barely any overlap between the two product lines, though that is unlikely to be the case since both companies have extensive and similar switching lines.

A more likely scenario is that HP -- which has the most successful edge switch in terms of sales -- will scrap its own core switching line, replacing it with 3Com's H3C product.

"ProCurve built its own core switch a few years back, but it wasn't gaining a lot of traction. With 3Com, they get a much more scalable switch that is a better fit for high-end data center and cloud networking initiatives," said Forrester Research director Robert Whiteley.

3Com will also bring a router story to the table.

"ProCurve never really had routers, so the H3C assets will help here again. I don't think this is as big a deal, since the majority of enterprise refresh is on L3 switches, which are more relevant in the data center, and where Cisco doesn't have quite the stranglehold it does on routers," Whiteley said.

The companies would not say Wednesday which, if either, of the ProCurve or 3Com H3C labels would be shuttered. Either way, the core and edge networking components would obviously be coupled with HP's data center servers, giving Cisco a run for its money on that front too.

3Com also brings its Tipping Point security line to the table, which brings HP in line with Cisco and Juniper on threat management, intrusion prevention and data center security solutions.

Promising networking interoperability

In addition to promoting the idea of a converged networks portfolio, HP and 3Com preached interoperability and compatibility -- clearly striking at Cisco, which has been heavily criticized for selling proprietary systems that promote vendor lock-in.

During the HP to acquire 3Com conference call, 3Com president and COO Ron Sege promised that all products from both companies are built on standards that enable multi-vendor networks. Sege reminded the crowd that the 3Com name stands for "computers, communication and compatibility."

Yet Sege also said 3Com's networking components were all engineered in-house and therefore function on the same operating system. It is difficult to promote a network with components all running on the same OS without selling the idea of a one-vendor network.

That said, Sege's mention of the unified operating system was also a clear swipe at Juniper Networks, which consistently sells itself on cost efficiency in network management with all of its components running on the Junos operating system.

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