3 COM’S ACQUISITION BY HP

Dear Friends!
I call this ‘a news of the decade’. The pecuniary value of the transfer of the office may not be astonishing ($2.7 Billion) which is much less than HP’s acquisition of Compaq ($26 Billion), HP’s acquisition of EDS ($13.9 Billion), Oracle’s acquisition of PeopleSoft ($10.3 Billion) or Oracle’s acquisition of Sun Microsystems ($7.4 Billion). But the tactical take-over of 3Com by HP carries wider ramifications for the entire IT ecosystem the world over. The acquisition harbingers a new phase where companies would increasingly try to offer end-to-end solutions IT solutions to large enterprises.
However, the quest is not confined to selling total solutions to customers but integrating more and more products developed in-house. Companies like IBM, HP, Sun Microsystems (Oracle), Cisco and to some extent Dell have been trying their best to weave solutions using maximum number of products from their own makings (brands). Yes, ‘technology partnership’ has been a pragmatic guiding principle, but the self-reliance is the ultimate goal that has been a constant aspiration of these companies. Taking into account this subterranean quest towards attaining self reliance of the highest degree, the latest acquisition of 3Com by HP triggers an avalanche of competition that would rapidly change the very façade of IT industry.
The Technology Solutions Group (TSG) of HP caters to the huge markets for Storage, Servers and Technology Management Software (HP OpenView). The Server part of TSG takes on IBM, Sun Microsystems (Oracle) and Dell. Whether it is Tower Server, Rack Mounted Servers or Blade Servers, HP’s capability knows no mediocrity. On the server front, there is a decent degree of parity among these players. Interestingly, Cisco, the $36 Billion networking major, has also ventured into Blade-Server space, signifying a heightened desire for offering end-to-end data centre solution using own brands.
The Storage Division of TSG offers best of the breed products and solutions to the global IT markets. Yes, in this space again, IBM, Sun Microsystems (Oracle) and Dell offer comprehensive range of storage products and solutions. It is to reminded that Dell acquired Equallogic, a storage company (virtually ending long term relationship with EMC, a storage-only biggie). Dell’s acquisition is seen as an effort towards getting the same self-reliance.
The area of technology management software has become very important component for the well being of data centres. HP offers a comprehensive range of technology management software. In fact, HP offers some of the toughest competition to players like IBM Tivoli and CA (Computer Associates). In the sphere of technology management software the aspirants in Sun Microsystems (Oracle) and Dell look weak (Yes, they offer element managers for their respective products, but the sweep is not so expansive as HP OpenView, IBM Tivoli).
However, the $13.9 Billion acquisition of EDS by HP has emboldened the company (HP) into offering a wide spectrum of services to large enterprise. The EDS factor gave a distinct prowess to HP in terms of handling large IT projects where services aspect holds much larger importance. With EDS, HP began to resonate with IBM wavelength.
Enjoy the reading!!

Md. Qaisar Alam
qaisar@digitaledge-india.com