Considerable Product Overlap in HP-3Com Combination

An article over at Network World written by Jim Duffy, who has been covering the computer-networking industry for many years, reinforces much of what I wrote previously about significant product overlap in the switching-product portfolios of HP and 3Com, which the former bought earlier this week for $2.7 billion.

HP is trying to downplay this aspect of the deal, but it is significant. HP is saying that because of the open, standards-based technologies on which the switch families are based, customers will have no trouble adopting whatever products avoid the chop in the post-merger integration. That’s true, I suppose, but the same logic does not apply to product developers and managers connected to the offerings that are not carried forward.

Regardless of whether individual HP or 3Com products survive, it’s reasonable to conclude that cost-cutting HP will be looking to do more of its development in China, where it gains access to 2,400 3Com networking engineers.

Two areas where HP gets new products from 3Com — and where no overlaps exist — are routing, both at the enterprise edge and the core, and core switching. As Duffy says, those are ingredients that will further the networking aspect of HP’s converged data-center strategy.

Other areas where HP gains new products are in intrusion prevention systems (IPS), where it now owns 3Com’s TippingPoint subsidiary, and in VoIP PBXes, where it gets an outdated 3Com product line with negligible market share. I really cannot envision HP eschewing its unified-communications partnership with Microsoft simply because now owns 3Com’s VoIP products.

Regarding TippIngPoint, it has an impressive installed base, and it represents a solid franchise.

In recent years, however, product quality has seemed to slide as some members of the original development team have left the company. I don’t think TippingPoint was a critical factor in HP’s decision to pursue 3Com, but HP needed to strengthen its security capabilities and this represents a first step in that direction.

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