HP to buy networking giant 3Com for $2.7 billion

Hewlett-Packard has announced its intention to acquire network equipment manufacturer 3Com, a move that has been perceived as a shot across the bow to market leader Cisco.

The computing giant has offered $2.7 billion for 3Com, continuing a recent spate of billion-dollar deals in the IT industry.

The acquisition will bolster HP’s position in a number of ways. Most immediately, it will enhance the company’s existing ProLiant line of networking products.

It will also strengthen HP’s systems portfolio. The growing use of virtualisation within enterprise architectures has driven demand for more sophisticated network switch functionality, such as the ability to move virtual machines across physical servers without dropping network connections.

Earlier this year, Cisco announced the forthcoming availability of a new data centre platform – the Unified Computing System – that brought that company in direct competition with the likes of HP. That Cisco could contemplate such a bold move is testament to the pivotal role of the networking layer in data centre systems.

The scale of Cisco’s ambitions in the IT space was further emphasised this week as it announced a new suite of office communication tools that places it in competition with Microsoft, Google and IBM.

HP also announced today it preliminary financial results for the final quarter of its financial year. Revenues for the quarter were $30.8 billion, down 8% from the same quarter of last year. Profit, as measured by earnings-per-share, grew 17% year-on-year.

Pete Swabey

Pete Swabey

Pete was Editor of Information Age and head of technology research for Vitesse Media plc from 2005 to 2013, before moving on to be Senior Editor and then Editorial Director at The Economist Intelligence...

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