Home HP and 3Com: The Cloud, China and $1 Billion for the New Enterprise

HP and 3Com: The Cloud, China and $1 Billion for the New Enterprise

The quarter begins today for the business world, and for Hewlett Packard it is the start of a new race. Especially as today officially marks the day it can start integrating 3Com into the company.

3Com’s fiscal year ended May 30. Until now, the two companies have had to perform one of those elaborate dances that comes before the ceremony is official.

It also marks another point in HP’s challenge to Cisco. HP has been catching up to the networking giant in the past year, preaching about a simpler network for the enterprise. Now we’ll see if the merger can help the company achieve that goal.

Today marks a point in HP’s efforts to adapt to the changing nature of the enterprise. The company announced it would be spending $1 billion in restructuring to gear itself to provide enterprise services.

Eyes on Cisco

Taking a look back at the past year, you can see HP’s focus on Cisco. This is what HP Senior VP Marius Haas had to say in his opening keynote at Interop in May of last year:

“Users are saying their networks are overly complicated, proprietary, expensive, and they are held hostage with no choices,” Haas said. “There’s no reason there can’t be change driven by industry standards that puts customers back in control. There needs to be a catalyst though, with the willpower to make that change in the industry. HP is going to be that driving force.”

3Com saw the same seam in the market before being acquired by HP. It too talked about offering simple alternative to the complex, proprietary technology offered by Cisco.

HP has HP ProCurve, its Ethernet switching product that has helped it become the number two vendor behind Cisco. 3Com is a long-time Cisco rival. Prior to the merger, 3Com offered three brands: small business gear, H3C enterprise equipment and Tipping Point security tools.

So, where does this bring things today? HP is positioning itself for the changing nature of the data center and all the networking technologies that will be increasingly required as the stack moves to the cloud.

Increasingly, we see vendors that are trying to assemble a soup-to-nuts portfolio that includes networking, servers, storage, virtualization and automated management. HP is undoubtedly restructuring, thinking how it can adapt and win in this period of massive disruption. 3Com fits into that plan.

So, can they do it?


First things first. One of the biggest challenges for HP will come with H3C, the alliance between 3Com and Huawei.

From Twilight in the Valley of the Nerds:

“One major part of 3Com that will be slower to digest than others is H3C, the former China-based joint venture between 3Com and Huawei that evolved into 3Com’s R&D engine. H3C was a prime attraction for HP in its pursuit of 3Com, both for its relatively inexpensive engineering personnel and for its account presence and market share in China.

One reason for H3C’s success in China was that it was viewed as a Chinese company by China’s government. In China, that distinction is not insignificant. As China continues to pursue a policy of “indigenous innovation” that will see it favor companies and products of demonstrably Chinese provenance, HP’s ownership of a “Chinese company” might prove critical in allowing it to compete effectively for customer patronage in the country and to qualify for cost-saving government programs.”

The reality is that every one of the tech giants has assorted challenges with its mergers. HP has its own challenges in China. How that will play out in the cloud is too early to tell.

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