Will HP Pursue Database and Router Acquisitions?

In his column this week at MarketWatch, John C. Dvorak muses about potential acquisitions that Hewlett-Packard might pursue.

Seizing on recent comments from HP CEO Mark Hurd regarding intensifying competition with Cisco and Oracle — proud owner of Sun Microsystems and all of its hardware and software technologies — Dvorak posits that HP might acquire a router vendor and a database vendor to counter its rivals.

The pundit then goes on to cite Sybase as a potential HP database acquisition. He mentions Juniper Networks as a router vendor HP might like to purchase.

My view is that HP doesn’t have to buy either company. Anything can happen (and usually does), but, presuming that HP feels a need to own routers and database software, it has other options. It might not even need to pursue acquisitions to fill the perceived gaps.

Let’s consider database-management software. It’s mostly a mature, slow-growth market in the developed world, where competitive displacement is a daunting proposition. Meanwhile, open-source databases and Microsoft SQL Server are the ascendant offerings in fast-growing developing markets.

Oracle salesmen give prospective customers in China and India — and many other countries besides — a toxic case of sticker shock. Not coincidentally, one of the reasons Oracle was so keen on owning MySQL was so that it could have a cudgel with which to beat Microsoft in developing markets.

Does HP — with its significant professional-services presence — really need Sybase? I don’t think it does. Instead of plunking down good money for database vendor, why doesn’t HP just sell OpenSQL the way it and IBM sell Linux for servers? No muss, no fuss. And it gets a product offering that can be priced affordably, with services as part of the package, for the fast-growing developing world.

More likely, HP could just partner aggressively with Microsoft, bundling Microsoft SQL Server into its solution portfolio, confounding Oracle and IBM in the process. Don’t dismiss this possibility. HP and Microsoft already partner extensively in this area and in others.

With regard to routers, does HP really need Juniper? I think HP would only buy Juniper if it wanted to go head to head against Cisco at carriers and wireless operators as well as in enterprise — and I’m not sure that’s HP’s game. If HP is focused primarily on enterprises, then it’s already (presuming China okays the purchase) got 3Com, which produces a range of cost-effective enterprise routers and could develop higher-end extensions to that product portfolio if given the corporate mandate to do so.

HP doesn’t need routers. It already has them.

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