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Network World - HP's news that it would lay down $2.7 billion to acquire network switch maker 3Com not only causes industry watchers to look ahead at what could come of such a deal, but also reminds many of the IT vendor's long history of billion-dollar acquisitions.
HP announced on Nov. 11 it would pay big bucks to add 3Com's Ethernet network switches, routers and security products to its ProCurve business. This way HP will also be able to run its next-generation data centers on 3Com networking equipment. The deal also strengthens HP's converged data center product portfolio vs. that of Cisco and its partners.
"It gives HP a core switch -- a brand-new core switch," said Steve Schuchart of Current Analysis of 3Com's H3C 12500, which the company is pitting against Cisco's Nexus 7000.
"It gives them a real platform to move forward with," Schuchart said in an interview with Network World Senior Editor Jim Duffy, adding that the HP ProCurve 8212 and 5400 series switches didn't really cut the mustard for core applications. "This is newer, bigger and a much more purpose built switch."
About 18 months ago in spring 2008, HP announced it would invest $13.9 billion in exponentially expanding its global IT services business via the acquisition of EDS. Aiming squarely at IBM, HP's EDS buy pushed the IT vendor quickly up the list of services providers to land behind IBM as the second largest global outsourcing company worldwide. At the time, industry watchers speculated that HP not only wanted to enhance its services business but also potentially sell more data center equipment via outsourcing deals.
"IT services are a big and strategic part of the marketplace and they influence technology purchases downstream," said Ben Pring, research vice president at Gartner, at the time of the deal. He explained that if IBM Global Technology Services is working with a client at the services level, there is more of a chance the customer will buy IBM technology. If HP can get its foot in the door with more services customers, hardware and software sales could follow.
"If HP had a bigger professional services umbrella and footprint, they would get greater access to a very strategic marketplace," Pring said.
In 2007, HP paid what some industry watchers said was too much money for data center automation darling -- and Marc Andreessen offspring -- Opsware. HP's net gain included automation technology that could be applied to configuring and provisioning physical and virtual components across network, system, storage and application components in a data center. The acquisition was one of the first significant moves by one of the four market leading management software makers to incorporate broad automation technologies across their product portfolios.
"The next big step for the big four management vendors [BMC, CA, HP and IBM] is a move into automation in the areas of active configuration management and dynamic resource allocation. It will be a big disruptive play and a defining technology when they move into automation technologies," said Will Cappelli, a research vice president at Gartner, in an interview with Network World at the time of the deal. "It will be more of a challenge for BMC and CA than for HP and IBM because the latter have server and storage technologies from which they can incrementally grow. BMC and CA will have to almost spring into the market with a fully shaped technology through acquisition."