HP buying 3Com to take battle to Cisco

Cites single vendor dominance in data centers as reason for $2.7 billion buy

HP is acquiring 3Com for $2.7 billion to fill out its data center product portfolio and customer base, a move that clearly has Cisco in its gunsights. The companies hope their combined entity will give Cisco a run-for-the-money in data center networking and convergence.

"Companies are looking for ways to break free from the business limitations imposed by a networking paradigm that has been dominated by a single vendor," said Dave Donatelli, HP's executive vice president and general manager, Enterprise Servers and Networking, in a statement. "By combining HP ProCurve offerings with 3Com's extensive set of solutions, we will enable customers to build a next-generation network infrastructure that supports customer needs from the edge of the network to the heart of the data center."

3Com recently re-entered the North America large enterprise switching stage after years of focusing on China. The company boasts a wide array of switching platforms - from workgroup, to wiring closet edge to deep data center core - after acquiring the whole of a joint venture it had with Huawei called H3C.

HP, meanwhile, has been lacking a core data center switch for some time. Its data center-optimized switching lineup consists of a top-of-rack 24-port 10Gbps Ethernet switch called the ProCurve 6600.

It had been speculated that HP was sizing up Brocade and its Foundry switches to fill the data center bill. Today's deal throws cold water on that speculation.

HP is so confident in the capabilities of the 3Com switches that it will run its entire global business and next-generation data centers on them, the company said in its acquisition announcement. The companies expect the transaction to close in the first half of calendar 2010.

Acquiring 3Com will also immerse HP in China, one of the world's fastest growing markets; and give HP some credible security products with 3Com's TippingPoint posrtfolio. TippingPoint intrusion prevention systems are installed in 30% of the Fortune 1000, the companies say.

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