The implications of HP's acquisition of 3Com overnight are significant – and not just in terms of increased competition for Cisco. Ovum, for example, makes the point that HP had already started to encroach upon Cisco's market with its Procurve product line. But acquiring 3Com provides "a serious boost to its data centre credentials," says the analyst.
Adam Jura, senior analyst based in Sydney comments: "One aspect of the market to watch will be Cisco's response, and while they acknowledged HP's move as a verification of their network-centric strategy, there will no doubt be a few murmurs internally"
He believes the marriage is extremely significant – and arguably more interesting than the last few months' speculation about the intentions of Cisco with respect to EMC and VMWare.
"While 3Com has had difficulty entering, and staying within the North American market, it will likely be able to leverage HP's strong presence as a more direct way into accounts," observes Jura.
"HP will be keen to offer the extended network capabilities and products of 3Com amongst its existing customer base in an effort to increase its share of wallet. Conversely, 3Com's strong position within the Chinese market will be a critical element of HP's acquisition decision," he adds.
Jura believes that HP will hope to "leverage 3Com's market presence to align its own technology offerings" – referring in particular to its data centre technology.
"One aspect of the market to watch will be Cisco's response," he emphasises. "Cisco is currently holding around $4.7bn in cash and equivalents on its balance sheet although this figure has dropped in recent quarters...
"The logical choice would be EMC and, as such, market rumours continue to abound. Regardless, Ovum expects the competition between HP and the network-dominant Cisco to continue to intensify – particularly as network-centric technology solutions, such as cloud computing, continue to emerge."
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