10 Keys To The HP-3Com Integration
HP + 3Com = Powerhouse?
HP's completed its acquisition of 3Com on April 12, and earlier this week, offered the first round of details as to what VARs, integrators, channel observers and customers can expect from combined product portfolios and channels. But the move means much more than that: it places HP's rivalry with Cisco again front-and-center, and, in the words of one VAR, suggests that Cisco might finally have a competitor ready to topple its networking dominance.
Here's a look at some of the integration's fundamentals -- including new information on what happens to 3Com's executives -- and what VARs should expect going forward.
Meet HP Networking
HP has a new group, called HP Networking, that will include all 3Com products acquired in the deal and also products from HP's existing ProCurve networking line. Its leader is Marius Haas (left), senior vice president and general manager, and HP Networking will appear within the tech titan's Enterprise Servers, Storage and Networking business unit on HP's flow chart.
HP has not eliminated any products from the existing 3Com line. According to HP, no products will be dropped in the short term, although the company is expected to phase out older products as part of regular improvements and technology upgrade cycles.
Target: Cisco
HP didn't even need to come out and reference Cisco by name during Monday's integration conference call -- the message was clear as a bell.
"It starts and ends with one message," said David Donatelli, executive vice president and general manager of HP's Enterprise Servers, Storage and Networking business unit. "HP will transform the networking industry by offering clients choice where there was none before."
Donatelli proceeded to reference a market share leader that has "limited IT clients' ability to grow" and also carries a "high cost" while being "slow to innovate."
"They have wanted a better choice in networking," Donatelli said. "HP is that better choice."
You Too, Juniper
HP, of course, isn't Cisco's only rival in the networking space. But when asked about whether HP could also stave off potential competition from the likes of Juniper and Brocade, HP's Donatelli suggested that HP "stands apart" because of its heft, breadth and depth.
"The data center is a place where customers really want to buy not only your technology and your roadmap but also make sure you're a company of size that's going to be around for a long period of time," Donatelli said. "If you compare HP to the other alternatives in the networking space, clearly that's an area where we stand apart. We're No. 2 in the space for a reason."
Eating Own Dog Food
On the conference call, HP executives said the new networking portfolio was already seen in use by several enterprise customers, including BMW. But HP is also making sure it sets the example, and along with the 3Com integration announced that one of its new data centers is entirely "Cisco-free." That is, it runs on the HP-3Com architecture, from 3Com core routers to ProCurve switches, with which it's hoping to entice new users.
"We're not locked into proprietary protocols that many in the IT industry are familiar with and this gives us more flexibility to change as our business grows," said Ken Gray, vice president, infrastructure, Global Information Technology Organization at HP, in a statement. "We're Cisco-free in this data center and a have a plan to extend this freedom across all of our internal IT data centers next year."
Product Sets
The HP Networking portfolio breaks down into four series of products.
HP's A Series includes products related to large and complex data center deployments -- such as 3Com H3C switches, routers and wireless gear and ProCurve edge and blade switches -- and is the product line that will compete most directly with Cisco and other vendors in the converged data center. Next is the E Series, which includes midmarket-centric products, wired and wireless LAN gear, and 3Com's voice portfolio, including related switches and VoIP products. The third category, V Series, is for wireless firewalls and other switches and network security products designed for small businesses lacking a large IT staff.
Tipped Off
The fourth of the new product series is HP's S Series, which includes the intrusion detection and prevention products that comprised 3Com's TippingPoint line. TippingPoint products are also now part of Secure Advantage, HP's existing data security portfolio.
According to Haas, all HP-3Com products, from the A Series to the S Series, will be supported by both HP Services, HP's integrator arm, and through its 40,000-or-so solution providers worldwide.
Partnerships Remain
HP's strategic vendor partners can breathe a sigh of relief; according to Donatelli, HP will continue to work with the storage networking and voice partners it's traditionally worked with, even as it develops products for converged Ethernet and Fibre Channel Over Ethernet environments. It will not be diving headlong into development of the larger or more significant storage products many of its major storage partners offer.
"We believe, in storage, partnerships are the way to go," Haas said.
No Pressure, Really
If HP is planning to turn up the heat on partner loyalty toward its new HP-3Com portfolio, it isn't saying so publicly. Asked about whether partners who sell both HP and Cisco networking and/or data center products will be pressured to choose sides, Donatelli (left), said there would be "no pressure exerted."
"We've always had a view that it's a heterogeneous world and customers want choice, and we offer our VARs the same opportunity," he said. "There will be no pressure exerted to do it other than us offering great products."
HP In China
HP's acquisition of 3Com gives it a substantial stake in the rapidly developing Chinese market -- something which Donatelli said will help expand the visibility of its networking products thanks to the fact that 3Com already bests Cisco for Chinese market share.
As 3Com detailed in a recent 10-Q filing with the SEC, however, HP's increased strength in China will also bring it new competitors that are strong in the Chinese market, such as Huawei.
What Becomes Of 3Com's Chiefs?
HP didn't offer many details on what happens to 3Com's current leadership team. In January, a filing by 3Com with the Securities and Exchange Commission indicated that CEO Robert Mao (pictured), COO Ron Sege and other top executives would be in line for multimillion dollar severance packages if the company was sold. According to an HP spokesman, Mao and Sege will be staying on with HP in consulting roles for the short-term. HP offered no further clarification on other executives and what the extent of Mao's and Sege's involvement would be.
The Story Continues
Further reading on HP-3Com:
HP Details 3Com Integration With Sword Drawn Against Cisco
VARs Applaud HP's 3Com Swagger But Cautious On Channel Effects
HP: New Internal Data Center 'Cisco-Free'
VARs Warn HP Not To Ignore 'Hidden Gems' in 3Com Portfolio
Q&A: 3Com's COO On HP, The Channel And Insider Training