H3C to Continue After HP’s 3Com Integration

Now that 3Com’ has been fully and legally acquired by HP, the latter is working urgently to integrate the former and to streamline operations and field-sales efforts.

According to sources familiar with the situation, 3Com’s U.S. operations will be integrated into HP by the end of this month. The remainder of 3Com’s worldwide operations are expected to be subsumed within HP by early June, though labor laws and regulations could slow the process in some countries.

For an unspecified period, 3Com’s H3C unit will retain its name and corporate identify in China, Hong Kong, and Macau. Some rumors suggest H3C will continue to operate as a standalone entity for two years.

Shusheng Zheng, an executive VP at 3Com and CEO and COO of H3C, apparently will lead sales efforts in H3C’s territories, and he will also retain responsibility for a significant portion of H3C’s research and development in China.

Last week, an all-hands integration meeting was hosted at 3Com’s worldwide headquarters in Marlborough, Mass., by Ron Sege, 3Com’s chief operating officer, and Marius Haas, HP Networking’s senior vice president and general manager.

While 3Com’s engineering staff in China are likely to see little change in their roles and responsibilities, 3Com’s executive team in Marlborough anticipates a different fate. Some personnel at 3Com’s headquarters might receive favorable transition offers, but many others will not be required after the handover is complete. Some 3Com executives had the foresight to design rich acquisition-triggered severance provisions (also known as “golden parachutes”) into their employment contracts with 3Com. As such, they stand to do rather well even if HP cannot find a place for them.

At the all-hands-meeting, Haas apparently conceded that HP must develop a stronger enterprise-networking sales team to compete effectively against Cisco Systems. HP is said to espouse an ambitious five-year plan to topple Cisco as the market-share leader in enterprise networking. Insiders say HP believes the seemingly grandiose goal is realistic.

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