Johannesburg, 22 Jul 2010
HP's $2.7 billion acquisition of hardware networking vendor 3Com means the IT giant will gain market share in the African region against its top rival, Cisco.
This is according to Derek Wiggill, HP Networking country manager for Africa, who adds that none of the 3Com employees will be retrenched. The full integration of 3Com's staff and products to form HP Networking took place on 1 July this year, after HP entered into an agreement to acquire the networking company in late 2009.
Wiggill notes that HP is aggressively taking a bigger piece of the global enterprise networking pie.
“HP in terms of scale has a stronger competitive backing to take on Cisco,” states Wiggill. “3Com had great products but it lacked the scale and financial backing to take its product aggressively into the market by itself. In five years' time, HP Networking expects to be the number one player in the networking market.”
Lorna Hardie, HP Networking country manager for HP SA, says the combined company will spur true convergence in the networking market, both locally and internationally. HP Networking plans to roll out a complete offering through the convergence of servers, storage, networking, management, facilities and services.
She says: “With the acquisition of H3C, TippingPoint and now 3Com, it was a natural progression and complementary relationship between all of the organisations. There has also been an increase in uptake of networking products within HP itself.”
Hardie adds that it's a dynamic time for the networking market, with the industry starting to see healthy competition; which she notes, benefits both vendors and customers.
HP bought out 3Com at a price of $7.90 per share in cash, or an enterprise value of approximately $2.7 billion. 3Com's network switching, routing and security solutions have been fully integrated into HP Networking.
The tech giant claims its expanded portfolio following the 3Com acquisition, as well as the addition of TippingPoint and H3C, has solidified HP's converged infrastructure strategy.
HP ProCurve, 3Com, TippingPoint and H3C branding has disappeared to become HP Networking. According to HP, it's expected the 3Com acquisition will bring HP's worldwide networking market share to around 20%.
The integration means HP's customers will be able to simplify their networks, deploy an edge-to-core network fabric for the entire enterprise, and improve IT service delivery capabilities, the company says.
The enterprise switch market is, by far, the biggest of the networking markets at about $18 billion. Just prior to the HP/3Com acquisition, Yankee Group research shows Cisco at number one position, with 54% of the ports shipped, HP ProCurve at number two, with 11% share, and 3Com at number three with 9%.
According to Gartner, the combination of the number two and number three players in the market results in a new network powerhouse that collectively shipped more than 36% of the medium and large enterprise LAN ports during 2009.
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