It seems that last week, if analysts are to be believed, a new war of technology titans, Hewlett-Packard and Cisco, is on the horizon. The two established players had only recently competed against each other with a few products at the edges of their product portfolios, but now the gloves are off.
Prepared by: Vanja Figenwald
This, claims Fortune magazine, can be read between the lines of HP’s announcement that it will acquire telecommunications equipment manufacturer 3Com for $2.7 billion in cash. With 3Com in its arsenal, HP’s head Mark Hurd will be able to more effectively attack one of Cisco’s most profitable business segments, the delivery of equipment for managing and securing data traffic for companies. Perhaps this aggressive move from HP was inevitable after Cisco decided to enter the server business, or did HP start the whole thing long ago by launching its ProCurve product (the HP division that develops and manufactures wireless access points, WAN routers, network switches, etc.)? Either way, they are now definitely at war.
‘This creates the largest competitor to Cisco in quite some time,’ comments Alan Weckel, director at Dell’Oro Group. Likewise, ‘this expands the range of products that HP can present to the market, and it also brings 3Com back to the U.S., where they have not been successful before.’ For 3Com, the sale will mark a sort of return home. The company was founded in Silicon Valley 30 years ago and became a networking heavyweight until Cisco outpaced them in the 90s, since when the company has been struggling to regain its place. In the meantime, they moved from California to Massachusetts, transferred their entire engineering operation to China, and recently began gaining traction among clients in Asia.
