Re: OT: 3Com to be sold to HP for $2.7b

This is in response to UCS. The server market will die if HP and the others
do not adapt or find a way to put the server right on the backplane of the
switch. Cisco kind of pulled the rug out of their feet now the server
companies a scrambling to purchase companies. It will take a little time but
this is the way it is going with VM. It wont be long I think.

Tony

On Wed, Nov 11, 2009 at 10:49 PM, Shaughn Smith <shaughn.s_at_cvnnet.co.za>wrote:

> Found this interesting
>
>
>
> 3Com to be sold to HP for $2.7b
>
> Computer giant takes aim at Cisco's network business
>
> Computer giant Hewlett-Packard Co.
> <http://finance.boston.com/boston?Page=QUOTE&Ticker=HPQ> will buy
> network equipment maker 3Com Corp. of Marlborough for $2.7 billion in a
> head-on challenge to Cisco Systems Inc.
> <http://finance.boston.com/boston?Page=QUOTE&Ticker=CSCO> , which
> dominates the network business. The deal will position HP to attack the
> heart of Cisco's market, and it comes only a week after Cisco teamed up
> with data storage titan EMC Corp.
> <http://finance.boston.com/boston?Page=QUOTE&Ticker=EMC> of Hopkinton
> to invade HP's stronghold in server computers and storage.
>
>
>
>
>
>
>
> "This is going to rock the networking world,'' said 3Com's president,
> Ronald Sege, adding that HP's global sales force could quickly expand
> 3Com's market share.
>
> 3Com is the second major Massachusetts tech company in the past month to
> be acquired by a Silicon Valley firm, as the tech sector reacts to
> decreased business spending with a wave of consolidation deals. In
> October, Cisco said it will pay $2.9 billion to acquire Tewksbury-based
> Starent Networks, a maker of network gear for cellular telephone
> systems.
>
> Just last week, Cisco teamed up with EMC in a joint venture to combine
> their computing, storage, and networking products in a play for HP's
> core business, enterprise computing equipment. Cisco just started making
> server computers this year.
>
> Tech giants are using mergers and alliances to quickly offer one-stop
> shopping to companies looking to save money by buying all their network
> products from a single vendor, instead of assembling corporate data
> centers one piece at a time. "It improves the efficiency, it improves
> the speed of deployment, and it drives costs down,'' said Abner
> Germanow, a networking analyst at IDC Corp. in Framingham.
>
> The 3Com purchase lets HP fill holes in its product mix far quicker than
> it could by developing its own product line from scratch. Although it is
> one of the world's leading makers of computer servers for big business,
> HP has offered only a limited range of networking hardware. Most of that
> has been at the "edge'' of the network, like the switches that connect a
> roomful of PCs and printers to a corporate system. Cisco dominates the
> "core'' market - switches and routers that distribute the massive
> amounts of data streaming into the network. With 3Com, HP gets a
> ready-made line of core network products to sell.
>
> Buying 3Com "gives us critical mass in a very important market,'' said
> David Donatelli, a former top EMC executive who made a surprise move to
> HP in April. Donatelli will oversee 3Com in his new role as HP's
> executive vice president of enterprise servers and networking, and is
> slated to take over HP's storage operations in April, when his
> noncompete agreement with EMC expires. That will put him on the
> frontline of HP's rivalry with the Cisco-EMC joint venture.
>
> The deal illustrates 3Com's return to prominence after a dramatic
> decline earlier in the decade. 3Com was cofounded in 1979 by Bob
> Metcalfe, one of the inventors of Ethernet, a networking technology that
> has since become a global standard. 3Com was originally based in Santa
> Clara, Calif., and its line of Ethernet products made it one of the most
> successful technology firms of the 1990s, employing as many as 12,000
> workers at its peak.
>
> Tough competition from Cisco and the 2001 collapse of the first Internet
> boom devastated 3Com. The company ceded the enterprise networking market
> to Cisco and slashed thousands of jobs.
>
> 3Com now employs about 5,300 workers worldwide, including about 300 in
> Massachusetts. Sege said he did not know how the HP acquisition would
> affect local 3Com workers.
>
> In 2003, a much diminished 3Com relocated to Marlborough. At about the
> same time, the company launched H3C, a joint venture with Chinese
> networking company Huawei Technologies.
>
> H3C's stable of Chinese engineers developed new high-end networking gear
> that was embraced by fast-growing Chinese companies, and has since
> attracted customers in Europe and Latin America. 3Com claims that 300 of
> China's 500 largest businesses use its products, along with US
> institutions like the National Aeronautics and Space Administration and
> the Massachusetts Institute of Technology.
>
> In 2006, 3Com bought out Huawei's stake in H3C. The following year,
> investment firm Bain Capital teamed up with Huawei on a $2.2 billion bid
> to acquire 3Com.
>
> But federal regulators blocked the bid because 3Com owns TippingPoint, a
> maker of network security gear used by the US Department of Defense.
>
> The regulators noted Huawei's close ties to the Chinese government and
> worried that Huawei might help Chinese intelligence officials circumvent
> TippingPoint technology.
>
> After the Bain-Huawei deal fell apart early last year, 3Com focused on
> developing a new line of core switches and routers that it claims will
> outperform Cisco gear while using much less electricity.
>
> HP's Donatelli said that once the deal is completed, his company's
> 300,000 workers will exclusively use 3Com gear for networking needs.
>
>
>
> CCIE # 23962
>
>
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Received on Thu Nov 12 2009 - 07:50:33 ART