Ethernet equipment

HP/3Com Battles Cisco

9:15 AM -- ORLANDO, Fla. -- While I'm running around at TelcoTV, everyone back home is... well, they're asleep right now, but they will be buzzing about the pending HP Inc. (NYSE: HPQ) acquisition of 3Com Corp. (Nasdaq: COMS).

It's obviously a play against the data-center aggression of Cisco Systems Inc. (Nasdaq: CSCO), including the Unified Computing System (UCS) that got Cisco into selling servers. (See Cisco Dreams of Data Center Unity.)

Analyst Michael Genovese of Soleil Securities Group Inc. says this is a black mark for Juniper Networks Inc. (NYSE: JNPR) in two ways. It adds heft to a competitor in the data center space, which Juniper is trying to crack into. And it means HP probably won't buy Juniper, which some investors apparently considered possible in the long term.

As for what the $2.7 billion deal actually means to HP, Nick Lippis of Lippis Enterprises says it broadens HP for battle against UCS -- but possibly not enough. Cisco has IP expertise, a bigger unified communications arsenal, and security products, he noted in an email to Light Reading just a couple of hours after yesterday's announcement.

But HP gains access to the Chinese market and some engineers in Latin America, he adds.

And further on the China front, analyst Catharine Trebnick of Avian Securities LLC writes in a note today that HP has already set up "an excellent retention package" for 3Com's team in China.

— Craig Matsumoto, West Coast Editor, Light Reading

Pete Baldwin 12/5/2012 | 3:52:42 PM
re: HP/3Com Battles Cisco

Here's the stock market reaction to the news so far:

HPQ - basically nothing (down .22%)

COMS - up 32%.  Party!

As for who's hurt the most by the deal....

CSCO - down 1.8%

JNPR - down 3.8%

BRCD - down 11%  (loses a potential Ethernet partner in HP, Catharine Trebnick notes... also has a Fibre Channel partnership with HP that shouldn't be affected)


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