Channel Insider content and product recommendations are editorially independent. We may make money when you click on links to our partners. Learn More.

Looking to create a “networking industry powerhouse” and up the ante in its
growing rivalry with Cisco, Hewlett-Packard (NYSE:HPQ)
has announced it will acquire networking vendor 3Com (NASDAQ: COMS)
in a stock deal estimated to be worth about $2.7 billion.

HP says the acquisition of 3Com, a provider of network switching, routing and
security solutions, will add to HP’s next-generation data center
strategy. Both HP and Cisco have created converged solutions that include
networking, servers and storage, as well as simplified management to help ease
the data center management burden and increase efficiency.

announces preliminary fourth-quarter results. Click here for more.

It’s part of a larger move among several big technology vendors to create a
set of solutions that are designed to work together rather than leaving
customers and reseller solution provider channel partners to assemble their own
best-of-breed solutions that can add complexity to data center design and

Last week Cisco announced its Vblock
and channel program, a set of reference designs and a
go-to-market strategy to help partners sell and deploy Cisco data center
converged architecture into companies. In a direct shot against the networking
giant, HP executive Dave Donatelli says customers are looking for another

“Companies are looking for ways to break free from the business limitations
imposed by a networking paradigm that has been dominated by a single vendor,”
says Donatelli, executive vice president and general manager of Enterprise
Servers and Networking at HP, in a prepared statement. “By acquiring 3Com, we
are accelerating the execution of our Converged Infrastructure strategy and
bringing disruptive change to the networking industry.

What does that mean for HP’s own ProCurve line of networking products?

“By combining HP ProCurve offerings with 3Com’s extensive set of solutions, we
will enable customers to build a next-generation network infrastructure that
supports customer needs from the edge of the network to the heart of the data
center,” Donatelli adds.

The companies say that HP’s acquisition of 3Com will expand HP’s Ethernet
switching offerings, add routing solutions and strengthen the company’s
position in China
via the H3C offerings.

HP says it will retain 3Com’s networking research and development team in China.
The 3Com acquisition also provides HP with network security capabilities via
3Com’s TippingPoint portfolio.

The boards of both HP and 3Com have already approved the merger agreement. The
acquisition is subject to customary closing conditions, including the receipt
of domestic and foreign regulatory approvals and the approval of 3Com’s
stockholders, and is expected to close in the first half of 2010.

HP anticipates that the transaction will be slightly dilutive to fiscal 2010
non-GAAP earnings.