Business

HP Paying $2.7 Billion for 3Com?

HP is gung-ho to go after Cisco. It’s going to take too long to R&D better switches for the price than Cisco sells. 3Com has those switches for cheaper. Core routers for data centers are pretty complicated as well, so throw in a few extra bucks to get those from 3Com while you’re at it. There is overlap in the entry-level switches and already a lot of competition out there, so I would expect whichever product HP considers inferior to fall to the wayside. There’s also overlap with a number of other products, such as wireless and then a number of synergistic (how 90’s of me) aspects, such as what VoIP, TippingTpoint, IP PBX and Trapeze. Overally, it’s an interesting merger. It feels more like HP’s answer to Cisco releasing their own iron than HP’s best strategic move though. Although the network engineers that work for 3Com are likely going to be the most long-term acquisition to speak of being that they’re supposedly more wicked smart with engineering the flow of electrons in enterprise routing/switching than the average guy ya’ meet on the street, meaning that HP is immediately going to have a better core to edge story immediately and assuming that the talent isn’t lost and that HP and former 3Com employees can work together, an even better story over time…

It’s funny, Reductive Labs just got $2 Million in VC and to me that’s actually a more compelling cost justified move…