Quick Facts The HP 3Com Deal
Quick Facts: The HP 3Com DealStalwart technology leader HP has completed its acquisition of 3Com. Combined, these companies have 110 years in the technology business and offer resellers a huge portfolio of compute, networking and security technologies to go after Cisco’s Unified Computing initiative, among other markets. Here are the quick facts around the deal, the partner programs, and the product lines.
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The Money FactsHP paid $7.90 a share in cash for 3Com in a deal worth about $2.7 billion. 3Com reported revenue of $1.32 billion in revenue during its most recent fiscal year ended May 31, 2009. Net income was $114 million.HP reported revenue of just under $115 billion for the fiscal year ended Oct. 31, 2009. Net income was $7.7 billion.
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ChinaWhile Google is getting out of China, HP is expanding there through the 3Com acquisition. 3Com started a Hong Kong-based business unit, initially a joint venture with China’s Huawei Technologies until 3Com bought it out in 2006. Called H3C, the business unit makes high-end switches, routers and other networking equipment, and has been a strong contributor to 3Com’s revenues.
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China, Part II3Com has noted that China has recently accounted for more than half of its consolidated revenue. The region has been a profitable one for 3Com.
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“China Out”3Com has been working to take its H3C enterprise networking products beyond China to the global marketplace, leveraging the strong market position it has built in China for the design, manufacture and sales of the large-scale projects there. 3Com recently created an invitation-only reseller program to bring this enterprise product line to markets beyond China.
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Focus Partner ProgramWith the acquisition just completed, HP hasn’t announced any deep details on product integrations (although some information is in the slides ahead). But here’s a look at the channel partner program that 3Com offered to its resellers.
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Focus Partner Program, Part II3Com’s Focus Partner Program offered 5 percent MDF on all 3Com products to Gold Partners — those who did $1 million in annual sales. Silver partners, those doing $250,000 in annual sales, got 2 percent proposal-based MDF. All partners got to participate in the rebate program offered on voice and enterprise LAN products.
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Partner Programs, Part II3Com has said that a majority of its enterprise sales go through two-tier distribution, and it also works with systems integrators, service providers and direct marketers. In addition the company does offer some direct sales. HP could not comment on the number of partners in the 3Com partner programs. HP has 150,000 partners around the world and 25,000 partners in the United States.
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3Com’s PatentsStarting with its founding by Ethernet inventor Bob Metcalfe in 1979, 3Com has shown a dedication to innovation, with a staff of 2,400 engineers. The company holds more than 1,400 U.S. patents and 400 Chinese-issued patents, as well as more than 1,300 pending Chinese applications.
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HP/3Com: Networking IntegrationHP says it will integrate 3Com’s network switching, routing and security solutions with HP’s ProCurve switches to create a more comprehensive portfolio.
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HP/3Com: Network SecurityHP now has a major foothold in the network security space with 3Com’s TippingPoint and network security line of products including firewalls, intrusion protection, unified threat management and wireless security.
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HP/3Com: Converged InfrastructureHP also says that 3Com’s products adds to HP’s Converged Infrastructure strategy, which is HP’s version of Cisco’s Unified Computing. Both approaches to data center infrastructure focus on the integration of servers, storage, and networking.