HP’s Extreme Rumor

There’s a rumor making the rounds that HP might be interested in acquiring Extreme Networks.

It’s easy to understand why Extreme would be willing to sell, but it’s less obvious as to why HP would want to buy. Still, this rumor has intensified recently, and one would be remiss not to at least deal with it.

Unless something is wrong at HP Networking, I don’t see HP making this deal. While there are differing interpretations as to why HP acquired 3Com (H3C) back in 2009, the fact remains that HP now offers a relatively extensive array of networking gear from its 3Com acquisition and from its preexisting HP ProCurve product portfolio. The combined offerings now run the gamut, from branch-office and campus offerings to data-center switches.

At least nominally, HP has the networking bases covered, though some could contend (and have done so) that HP Networking might want to consider unifying its product portfolio under a single network operating system, most likely Comware.

Considering that HP arguably hasn’t finished integrating its networking operations, and also taking into account that HP already has an extensive networking portfolio, what could be the motivation, if any, for a rumored acquisition of Extreme Networks?

Maybe there’s nothing to this rumor, and HP has no motivation to acquire Extreme. If so, that puts the story to bed. If HP does make an Extreme move, though, questions will be asked, and rightly so.

8 responses to “HP’s Extreme Rumor

  1. no way. brocade for the fibre channel and data center fabric assets – possibly, but even that is quite remote.

  2. I agree. I don’t see any compelling logic or urgent need for HP to make this move. By the way, the rumor suggests that HP’s latest networking shopping excursion initially involved vendors other than Extreme.

    I asked a very senior executive at one of those companies about it, and got a firm “no comment.”

  3. Pingback: Twitted by RivkaLittle

  4. As a recent Lippis report points out HP does not have a competitive fabric strategy.for data center and cloud services. Extreme Networks announced its strategy at Interop – using a combination of its x670 and x8 switches. It delivered its Summit x670 switch in July and its X8 switch begins customer trials in October. This combination puts the 3com 10K and 12K series switches to shame. Extreme’s Linux based operating system (XOS) would be an ideal OS to unify HP’s networking equipment under.

    Extreme will also be delivering new backhaul routers this quarter.

    Couple HP’s strategy needs with Extreme’s shareholder pressure to create
    shareholder value – Starboard threat to challenge the Board in a proxy fight – and I believe a deal will be announced by mid-Nov. In fact the deadline for shareholders to file a proxy issue has been extended twice from July 15 to Nov 14,2011. The timeline between Interop 2009 and HP’s Nov 11, 2009 announcement of the 3com acquisition might be the template for an HP puchase of Extreme. Read the 3com merger background section in its DEFM 14A document dated 12/15/09 filed with the SEC beginning on page 12. History might repeat itself. back

    • What do you think of the departure of Gordon Stitt from the board?

    • What do you think of Gordon Stitt leaving the board?

      • It might signify something or it might signify nothing. 🙂

        What do you read into it?

      • My read is activists now have control of the board, and could look for strategic alternatives. Mr Steele (the earlier comment) himself has filed a proxy asking that the Rights issue be withdrawn. Myself i dont think the Rights poison pill has ever been a roadblock for a friendly deal. With a strong product set in 2012, perhaps the best time for Extreme to look for a buyer.

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