HP Heats Up Cisco Rivalry with 3Com Purchase
The gloves are off now in the fight for the data center. Cisco has operated largely unchallenged in providing routing and networking equipment for data centers, but with the purchase of 3Com, HP is poised to go head-to-head with Cisco.
The nearly $3 billion acquisition allows HP to incorporate a diverse portfolio of network switching and routing equipment, as well as 3Com's TippingPoint intrusion prevention products into its inventory. Combined with the growing success of HP's existing ProCurve network devices, purchasing 3Com intensifies the rivalry between Cisco and HP.
The purchase also signals a new direction for HP which has a history of expanding the scope of its products and services through acquisitions. HP bought Compaq in 2001 to extend its market share of server and desktop computers. In 2008, HP purchased rival IT services provider EDS to buy its way into 2nd place in that industry behind IBM. Acquiring 3Com takes HP into data center networking hardware territory and gives it the ability to deliver comprehensive, end-to-end solutions for customers.
HP isn't the only company blurring the lines between traditionally separate markets. The entire industry is going through a convergence driven by unified communications and virtualization. The technologies and how they are being applied have evolved and companies like HP and Cisco have to adapt to those market trends to meet their customer's needs.
Cisco has been stepping on toes for some time now. Cisco essentially drew first blood in this battle when it recently began marketing its own line of server hardware. Cisco has also been engaged against Microsoft, fighting to shape the future of unified communications. Last week Cisco announced the addition of 61 new products to its unified communications and collaboration portfolio.
Cisco has built its reputation in networking and has a solid share of that market, but it has been working diligently to break out of that mold and expand its products and services. Cisco is learning though that competitors are not going to sit idly by. Logitech took a bold step from the consumer side of technology to square off against Cisco for enterprise video-conferencing with the purchase of LifeSize.
What does it all mean? Business is being driven by server consolidation and virtualization. HP was not content to let Cisco dictate network architecture and data center strategy, and with the purchase of 3Com it is in a position to challenge Cisco's inherent dominance and guide the future of the data center in its own unique way.
HP says as much in the official statement regarding the 3Com purchase. "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 executive vice president and general manager for Enterprise Servers and Networking.
Essentially, Donatelli claims that customers are tired of having only one vendor to choose from in the data center and HP is coming to offer an alternative. Donatelli also said "By acquiring 3Com, we are accelerating the execution of our Converged Infrastructure strategy and bringing disruptive change to the networking industry. 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."
Bottom line: the gloves are off and the lines are blurred. HP and Cisco, two companies that have traditionally enjoyed a symbiotic, but separate success, are now treading on each other's ground. They are now arch rivals and the battle is just beginning.