Hewlett-Packard's announcement that it plans to buy networking pioneer 3Com in a deal worth about $3 billion is more than just a shot at platform giant Cisco Systems. The deal is also a signal that HP, long a leader in a wide variety of enterprise computing platforms as well as a small but well-regarded line of networking infrastructure products, is planning to round out its presence in the data center, and around the world.
HP is a highly diverse company with a presence in everything from ink-jet printers to blade servers. The company already sells a line of enterprise networking infrastructure in its ProCurve products, and a full line of computing platforms for the data center.
So why 3Com? The Massachusetts-based company is huge in China thanks to a partnership with Huawei Technologies, it also has a significant presence in the data center, and it includes a securty services company, Tipping Point.
HP was one of the primary targets when Cisco announced its Unified Computing System, which included an integrated blade server system designed to be tightly integrated into its switching and network management products. At the same time, Cisco began dropping support for HP's blade devices which had previously used a dedicated version of Cisco's routers.
The clear intent was to take over the data center by offering a single, unified system that would make it easy to choose Cisco, in the process freezing out IBM and HP. So far, that hasn't happened, but the other major players in the data center market are making sure that Cisco's plans don't go unchallenged. The HP-3Com deal is a significant response by HP to make sure it remains a major player in IT and in the data center. With 3Com, HP gains a stronger global presence, an expanded product line, an additional services company, and a presence in more places in the enterprise.
For its part, 3Com finds a buyer. Previous attempts to deal with its financial issues led the company to abandon data center products nearly a decade ago, and to sell that portion of its business to Extreme. After diving back into the data center pool again, the company tried to swing a deal with a Chinese suitor, but that fell through. HP was basically its only other good option.
So why should you care? For the immediate future, none of this will matter to a CTO who is simply trying to make sure that the IT operation keeps running smoothly. The deal has yet to close, and it might or might not get the approval of the various entities that have to bless a big merger like this, whether it is the stockholders or the government. Even if the sale does go through, it'll take a while for anything to happen. When HP bought Compaq and Digital, the integration took years. The more recent purchase of EDS is still being digested.
Eventually, if all goes according to plan, you will find that your data center options become simplified. You may find that you have a broader range of options from HP. And you may find that you have a higher level of integration in running your data center. You also many find that you don't need to depend on Cisco for your infrastructure-which may or may not be something you care about.
But right now, this move only means something to you if you hold investments in HP or 3Com stock. It may mean something if you invest in Cisco or IBM, but that's not clear yet. In your data center, even if you're heavily based on 3Com or HP, it doesn't really mean anything until the next upgrade cycle starts. So you have time to see how this all shakes out before you need to start planning.