But just how much pressure is another matter, and one that according to VARs will depend on how HP leverages what it's buying -- and how the channel gets to benefit from that leverage.
Interviews with solution providers for Cisco, HP, 3Com and other competitors have yielded some pretty big questions indeed. VARs agree, however, that if HP can leverage 3com's portfolio to its advantage, overcome years of 3Com channel strife and stay focused on boxing out other competitive threats, it will go head to head with Cisco like never before.
1. What Does HP Gain From 3Com -- And What Will It Keep?
At the outset, the $2.7 billion proposed acquisition would give HP access to 3Com's H3C core and edge switches -- an immediate bolstering of the lower-end HP ProCurve portfolio -- and also TippingPoint, 3Com's highly regarded network security brand.
Buying 3Com also instantly extends HP's reach into some of the most explosive growth markets in the world, namely China, and while there are portfolio integration concerns, most VARs and analysts agreed that HP and 3Com wouldn't have too many cultural differences impeding that integration. Furthermore, HP and 3com are both strong in key verticals like education and state and local government -- combined, they're a powerhouse.
But beyond the H3C cores, TippingPoint intrusion prevention and potential overlap concerns with HP's existing portfolio, there are two other areas where HP also stands to compete: 3Com's voice/IP products and the low-end switches and routers it provides through OfficeConnect.
Both areas give it new fronts against Cisco and other telephony and networking gear players, VARs acknowledged.
"They [HP] had nothing in voice and now they're going to have something. Whether they treat it with respect or let it dangle like 3Com has for a while is the question," said Glenn Conley, president and CEO of Metropark Communications, a St. Louis, Mo. solution provider. "HP is definitely not a telephone company, and for that matter, it took 3com a long time to step up to the plate and say yeah, we are a voice company from when it acquired NBX 10 years ago."
"We've been a 3Com reseller since they bought NBX, and since we're also an HP reseller, we're absolutely excited about what can happen," said Mark Essayian, president of KME Systems, a Lake Forest, Calif. solution provider. "3Com's voice stuff is fully virtualized and runs on off-the-shelf servers. HP is huge into virtualization. Why on earth would they possibly throw that out? I mean, if they really wanted a big voice player, maybe they should have looked at Nortel or Mitel or something, but 3com's underlying architecture for full virtualization is outstanding. That they've divorced the call processing software from the hardware is genius."
Another solution provider who requested anonymity said that 3com's voice portfolio was "perhaps the most underrated in networking."
"It's an unpolished jewel. Not a diamond, but a jewel, yeah," said the solution provider. "Their [3com's] marketing has always kind of sucked. That's why you never hear about it. This is a jewel for HP if you look at it the right way. There's a lot more in that 3com portfolio than a lot of its critics will give it credit for."
Added Essayian: "I'll bet M&A experts from HP took a good long look at that and said hmmm, they don't even know what they have here, do they?"
Less mentioned are 3Com's low-end products through OfficeConnect. But should HP decide to keep OfficeConnect, the line gives HP direct competition with Cisco's Linksys brand for small businesses.
"That stuff works pretty well," said Essayian. "It remains to be seen whether HP wants to compete, but if they keep it, they're up against Linksys and D-Link and a few others. HP isn't dumb, so they're definitely giving it some thought."
2. How Will HP Overcome 3Com's Channel Strife?
3com has spent much of the year trying to convince U.S. solution providers and customers that it could overcome a rocky 2008 and also reclaim the enterprise presence it once dominated and then lost back in 2000, when it discontinued its CoreBuilder switch line.
3com's makeover started in May 2009 when the company brought its H3C line from China to other parts of the world. Since then, 3com has also focused heavily throughout the year has been reworking its channel strategy, and in August said it would integrate its H3C products and TippingPoint security tools to create a new network security fabric.
The memory of 2008 -- which saw the exit of 3com channel chief Nick Tidd and the bust of 3com's planned merger with investment firm Bain Capital partners -- is still writ large in the eyes of many solution providers, however. And HP will need to integrate 3com seamlessly and quickly if it doesn't want that taint to follow 3com into HP's channel-centric technology empire.
"It's still tainted," Conley said. "If HP's trying to expand this presence, well, maybe it's looking for diversification in other parts of the world. In North America it's just still not a good story. 3com has dragged their tail and slowed things down here in North America with their focus clearly elsewhere. We've saw virtually no new product releases here for the longest time, and then all of a sudden they poke their heads out of the sand and said we're coming back. It makes you sad sometimes, actually. 3com back in the 70s and 80s was an R&D engineering feat. It was gorgeous. What's HP going to do with that now that those memories are so old?"
"That CoreBuilder story is so old now, but IT directors still remember it. They all remember it," Essayian suggested. "Some people got burned hard on it. HP's challenge is how to take what they have and scale it."
Next: The Competitive Response