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HP, 3Com deal not without product overlap headaches

Jim Duffy | Nov. 13, 2009
Fortunately for HP, the overlap should be a minor distraction to what the company views as the real big game

Specifically, will there be a fit for both HP's ProCurve 8212 and 5400 series switches, and 3Com's S7500E and S7900E? How about the ProCurve 2910 and 3500 vs. 3Com's 4500G and 4800G, which all support comparable port densities and price?

Would HP really be willing to part with any of its ProCurve line?

"It will be interesting to see what HP keeps because the 3Com portfolio has been developed over the last 18 months, it's more recent," says Zeus Kerravala, an analyst at the Yankee Group. "I expect to see most of the 3Com portfolio live."

HP says the integration issue will be an easy one due to standards compliance and what it views as little to no overlap.

"These are open products that can interoperate with any other product that is already available in someone's network," said David Donatelli, HP's executive vice president and general manager of Enterprise Servers and Networking, during a conference call this week on the acquisition. "And again, due to the fact that there is very little overlap, these products complement themselves very well. So we are ready to go to market day one with the portfolio."

Another area of direct HP/3Com overlap is in wireless LANs. That product rationalization should be much easier, however.

3Com has an OEM arrangement with Trapeze Networks but HP bought Colubris last year. Naturally, HP is expected to continue on with the Colubris product line.

But there are also product synergies in addition to core switching and edge routing. HP inherits a VoIP product line in the 3Com NBX and VCX IP PBX and handset portfolio.

3Com has less than .5 per cent share of the total $16 billion enterprise telephony market however, according to Dell'Oro Group; but that's still more than the 0 per cent HP has, which up to now addressed the market through partnerships with Avaya and Microsoft, among others.

"I think they'll continue to partner with Microsoft and Avaya, but I think they should keep [the 3Com VoIP products] and refresh them," Kerravala says.

And 3Com's TippingPoint business gives HP security products it either had to partner to obtain or could not offer customers at all. TippingPoint's product line consists of threat management and intrusion prevention appliances installed in 30 per cent of the Fortune 1000.

"This is huge for HP, it gives them legitimate network security," says CurrentAnalysis' Schuchart.

The enterprise edge routers HP obtains from 3Com are those in the MSR line. MSRs feature a Linux-based server blade for running open source applications like IP PBX, security and WAN optimization, much like Cisco's wildly successful ISR series platforms.


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