HP closes 3Com deal, strengthening competition for Cisco

$2.7 billion acquisition still needs to sort through products

Cisco's competition just got stronger. HP this week closed on its acquisition of 3Com, which added about four percentage points to HP's share of the Ethernet switching market.

HP now holds about 10% of the Ethernet switch market, solidifying its position as the No. 2 vendor in that space. Cisco is still far and away the market share leader with 67% of the $16 billion market in 2009, according to Dell'Oro Group.

HP, as expected, paid no more than the $2.7 billion offered initially for 3Com.

HP said it will integrate 3Com's switching, routing and security portfolio solutions with its existing HP ProCurve line. HP said further details on the product integration will be announced at a later date.

But we already did some of the spade work here. And away from the enterprise and data center core, switching overlap in the edge, low-end and SMB spaces is considerable.

3Com's routers, TippingPoint security and VoIP product, however, should complement HP existing offerings.

HP says completing the 3Com deal strengthens its Converged Infrastructure strategy, which involves the integration of servers, storage, networking, management, facilities and services for simplified edge-to-core network deployment and improved IT service delivery. But execution is key - HP closed the deal; now it must deftly combine product lines and clearly articulate a strategy and supporting portfolio to increase market share.

It can't be complacent at 10%.

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