On Wednesday after the bell, HP (HPQ) announced that they had acquired former tech big shot 3Com (COMS) for $2.7 billion in cash. This is only the most recent move in what has become large-scale square off between the likes of HP, Cisco (CSCO), IBM (IBM), Oracle (ORCL), and Dell (DELL). For many years these companies maintained themselves within their particular areas of strength, but “amid shrinking tech spending over the past year, these giants have pursued new growth by spilling into each other’s turf, sparking new competition and undoing what had been friendly relationships.” (WSJ)
With 3Com in tow, HP can now compete for sales of networking gear, an area normally dominated by Cisco. This, however, comes after Cisco moved into the server business, normally that of HP and Dell. According to Oracle CEO Larry Ellison, “The goal is now to sell complete systems made of chips, computers, storage devices and software.” He hopes that this approach will “appeal to corporate customers tired of assembling technology from multiple vendors.”
Looking to the future, CNBC’s Jim Goldman believes that both Brocade (BRCD) and Juniper Networks (JNPR), both of whom are competitors of 3Com, are prime targets to be taken over, most likely by IBM.
Disclosure: No positions in the companies mentioned.
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