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HP To Acquire 3com For $2.7 Billion
An anonymous reader writes "HP and 3Com Corporation today announced that they have entered into a definitive agreement under which HP will purchase 3Com, a leading provider of networking switching, routing and security solutions, at a price of $7.90 per share in cash or an enterprise value of approximately $2.7 billion. The terms of the transaction have been approved by the HP and 3Com boards of directors."
... what happened to 3com. Some of us remember "back in the day" when 3com was one of the top brands for network cards (3c503 or 3c509 anyone?). Then their cards disappeared from the market some years ago, apparently they decided to focus on other areas. I guess it isn't a huge surprise that they would become a target for acquisition.
Damn_registrars has no butt-hole. Damn_registrars has no use for a butt-hole.
Somebody talked. The options market started heating up hours before the announcement.
It looks like it's going to be a good fight, as the traditional tech companies merge transformer-style into a pair of consolidated all-in-one providers. Maybe they'll battle to the death for every server room dollar.
All the while Apple sews up more and more lines in the consumer electronics market and Jobs smiles subtly. It's almost as if he knows what happens once we've consolidated everything in the datacenter.
Help stamp out iliturcy.
As a current HP bastard (who didn't post this, BTW), this pissed me off. We've endured pay cuts, benefit cuts, no raises, mass firings, hell, my local office can't even purchase paper plates & disposable spoons, and somehow there's enough money to purchase another company.
I couldn't wait to find out which company HP would destroy next.
Given what is left of HP after the hurricane Carly destroyed the place.
Shoes for Industry. Shoes for the Dead.
I can't wait for 500MB driver packages, 234454 running background processes and 7 tray icons required to configure the hardware.
from 09 F9 11 02 9D 74 E3 5B D8 41 56 C5 63 56 88 C0
to 45 2F 6E 40 3C DF 10 71 4E 41 DF AA 25 7D 31 3F
And they're selling more of them than ever.
It's starting to look like HP deserves the Borg moniquer more than Microsoft does.
3com, we hardly knew-- ...Well, I guess we did know you. So long.
What happens when there are no companies left to merge? You get China.
I ceased wondering how Cisco ate 3Com's lunch when I had to integrate a couple 3Com switches the company CEO (an avid "bargain hunter") acquired into company LAN. To put it mildly, for manufacturing something that refused to play nice with other networking gears my only question is how they managed to stay in business this long.
ELOI, ELOI, LAMA SABACHTHANI!?
The iPhone is the number one smartphone in the market by the metric that matters most to Apple: net profit.
And they sell overpriced x86 boxes to a niche market segment.
That would be the "profitable" niche - and they appear to have taken over the "profitable" corner of every game board they play on.
Help stamp out iliturcy.
Wow, they paid $7.90 per share, a 39% premium over today's closing price. Earnings are anemic but at least they are in the black. It will be interesting to see what HP had in mind. I'm still trying to comprehend how this was the best use for $2.7 billion in cash.
Started with them in Massachusetts in '93. They had some of the worst and most disorganized upper management ever. The guys doing corporate strategy must have been ADHD. They would buy a new (usually startup) company every year...some good, some bad. Kept the original management for a year, then, after all the developers and original management had gotten PO'd and left, bought another company and did the same thing. Year after year. I'm not sure what they got out of it.
I was laid off after they'd spent several years developing a gigabit enterprise switch, sold the first few, then made s surprise announcement that they were leaving the enterprise business. You can imagine how their major customers, who'd started to build new infrastructure using these switches, took that news.
They did give out great clothing, though. Still have a collection. Great co-workers, good projects, extremely poor corporate management.
Calculators are a small part of HP's business and definitely not driving this merger. Someone was saying that HP might be doing this to better position themselves in the datacenter. I guess that they see the networking products of 3Com as another way to sell HP services. In other words, look at the high margin parts of HP. They are printer refills and various support services. I don't see the 3Com merger selling more printer refills, but it does look likely to open the door to more HP services.
Adding 3com networking know-how to HP computing products may actually produce better products?
Hey it could happen!
HP already has its ProCurve line. It seems they mostly bought 3Com because it's big in Asia? That's what the talk is anyway,
The World Wide Web is dying. Soon, we shall have only the Internet.
I run a one-man PC repair company with about 750 customers. I'll happily sell it to HP for $12 million... or to you for $0.12 million.
As an ex 10 year gold partner of 3Com (left this year), I can say their quality of goods has gone downhill for the past 3 years. There were nice margins in their equipment but their Layer 2 and 3 switches and cores were plagued with problems out of the box or after just a few months of usage in datacenters and enterprise. Numerous port deaths, uplink failures, stacking communication issues, etc...
The NBX100 was revolutionary, and they still run like champs, however the new NBX and V IP series chasis became junk. Numerous VXWorks drive failures and PRI cards were constantly losing chassis connections. Not to mention the RMA process was wretched.
Personally, I believe 3Com's downfall was to go against Cisco by undercutting on price which lead to cost cutting on manufacturing and high deviations. Basically putting them on par with Linksys, DLink, and NetGear.
I hope HP turns them around in certain areas as it would be nice to possibly have decent manageable copper/fabric switching, especially for blades, at a more competitive price for budget concise decision makers that prefer HP in their shops.
My first thought, without RTFA, was:
Cisco: Look our routers can run Linux and look at these x86 modules, we're getting into the server market.
HP: Well screw you, we'll go and buy some networking market share.
No idea how accurate that is, but it felt right.
Here's the thing... The company I work for has a few sister companies in HK and China. I work for the U.S. office.
We recently (last year) upgraded our switches in the U.S. office. Previously, we were running 3Com switches of various types and models (3300's mostly of different kinds, and some 4200's). The decision to replace them was due to the fact they were getting old and the performance wasn't really there when you start daisy chaining 10 different switches to support over 200 ports.
When looking for new switches, I looked at Cisco and HP. Our overseas IIT guy tried to get us to go the 3Com route once again, since that's what they use in the HK and China offices. Actually, they use Huawei branded switches as well as 3Com braded switches. If you don't know already, they're basically the same thing. He really tried hard to get us to go that route, but I would not budge. I did everything to show that 3Com had very little market share in the U.S. and thus very little support.
Anyway, we ended up replacing the aging 3Com equipment with HP Procurve switches (5406 and 5412). We wanted to go with Cisco switches at first, but they were our of our budget. Next to Cisco, HP seemed like the most logical choice.So far, I'm happy with the decision.
I just find it ironic that after the acquisition, that whole power struggle over which switch to use will be moot.
3ComHPaq?
Dear Slashdot: next time you want to mess with the site, add a rich-text editor for comments.
Why is anybody surprised by this? Cisco announces a server product with very strong networking abilities. This is pretty much one of the few large areas of the datacenter (hardware wise) that Cisco hasn't moved into (besides disk arrays). HP sees this as a huge threat to them (bigger than IBM, who makes most revenue from services including running datacenters comprised of non-IBM equipment).
HP now realizing that they don't have the networking expertise to go after cisco directly in the networking space (one area they need to expand into to gain marketshare in the datacenter beyond servers and HDS rebranded storage, or that midrange Compaq based arrays). Well, they could go after the #2 enterprise networking company (Juniper, but they have a market cap of ~$13B), so they pick up 3com and whatever is left of it (remember they used to be partnered a while ago with Huauei, that partnership is gone tho), so they can better fight against Cisco for networking.
For these big companies it's all about expanding your presence and finding new revenue streams. Cisco can't seriously increase it's core routing/switching marketshare very easily any more than HP can increase its server marketshare.
It's not always easy to grow your company organically (from within). Look at cisco, they buy security companies, storage switching companies, WebEx. Hell, when they were a router only company, they bought an ethernet switching company (Crescendo) which later became the bread and butter business for them.
I've found HP's ProCurve Switches to be great with a lifetime warranty and free software updates compared to the Cisco equivilents which need SmartNet (maybe smart on Cisco's part) and cost 2-3 times as much.
However with alot of my clients rolling out the Cisco Voice solutions the idea usually is they standardize on all Cisco kit including the switches. I wonder if this is HP's play to get into the IP telephony market (which 3Com's website indicates they are in) to complete their offerings so a buisiness will go all-HP in a similar fashion?
Back in the Dot.Com era, there were plenty of companies out there that were all hype with little to show for it. I would continuously ask myself "Why does this crap sell?". Then the crash came, the companies that were nothing but hype were the first against the wall, they went away, the world went back to normal, and I said "Oh, now I understand!"
Now, while Apple continues to sell slightly better than mediocre products for 10X what they're worth, on hype alone, I keep asking myself "Why?" With the economy in a slide, and history apparently repeating itself once again, I'm preparing, once again, to understand...
MHO
Slashdot gets worse every day... Pipedot: News for nerds, without the corporate slant
I guess this purchase will free-up 3Com's stock symbol COMS (a pretty cool one).
There is some rather damning (IMO) evidence of insider trading on this deal. Seems like a very short sighted move on HPs part since the market price for 3COM was 5.30/share.
God forbid a government actually trying to stop Monopolies and reduction in market fairness. How would that make sense? Lets live in the country with no basic health care for all its people, that is a great way to live.
Now, while Apple continues to sell slightly better than mediocre products for 10X what they're worth, on hype alone, I keep asking myself "Why?"
Which products were you referring to? I can think of a few of theirs that are a little exxy, but nothing like that much, and most of their products seem quite competitively priced. I can understand that people might want a configuration that Apple doesn't offer - and fair enough if that's you - but if you fall into one of their target markets, they're pretty hard to beat on price.
I know that a few years back at my previous employer the only reason I was able to get HP blades into the DC was due to the inclusion of Cisco switches in the blade enclosures. I wonder if HP will continue offering Cisco switches, and if not how badly will it hurt their sales? I think it's a lot easier for a networking guy to bring in a foreign x86 server than it is for a server guy to bring in a foreign switch to the DC. Round 1 goes to Cisco.
Bob used to answer the phone when I had a problem with the 3com card in my VAX-780. Then he was riding high for a while. I'd imagine he took out lots of cash while the company was a leader.
Bruce Perens.
... would find a way to relate this not in any way to Apple.
Apple simply does not figure in most of the markets where HP moves, while in the other hand HP could encroach into Apple's markets (they compete against each other in all of Apple's computer lines).
IANAL but write like a drunk one.
Simple: You pay for what you need and what you want (if you can). The people buying expensive quality stuff want to buy quality stuff and don't mind if it's expensive. Same as Cisco.
Meanwhile in the real world, Acer is the largest manufacturer of laptops, HP of desktops, and Samsung is a huge consumer electronics company. The US is not longer the majority of the IT goods market. Outside the US, the iPhone is just one of a number of high spec phones. The consumer market has lots of competition and Apple is just one player. Your statement is like saying "BMW sews up lines in the car market". Just because many US geeks prefer BMWs to Mercs doesn't actually mean that BMW is the market leader.
From scarped cliff or quarried stone she cries "A thousand types are gone, I care for nothing, no not one."
I suspect your ability to understand will depend on your willingness to re-examine your axioms.
Not this time. Not with 30 billion cash in the bank.
#6495ED - cornflower blue
Would that be because their employer, Mr. Sauron, had a few problems with the authorities? In Terry Pratchett's latest book, there's an indirect swipe at JRRT: there are only a few surviving orcs after the Dark Wars, and (plot spoiler) the authorities are trying to integrate them back into society.
From scarped cliff or quarried stone she cries "A thousand types are gone, I care for nothing, no not one."
The obvious conclusion that you seem to have missed is that at least for some amount of people, Apple provides value worth the cost. This has been discussed many many many times before so I'm shocked you don't understand.
Or perhaps you're just a troll, I couldn't be bothered to look at your posting history.
3COM = Patents. HP = Patent Troll? Could it happen?
... I'll have a Pan Galactic Gargle Blaster with a side of Plutonium Nyborg
Uh, if they are eating their own dog food wouldn't they already be running Procurve internally? Much better than switching to 3Com, shudder....
There are 4 boxes to use in the defense of liberty: soap, ballot, jury, ammo. Use in that order. Starting now.
You Left out Step 2: ?? and Step 3: Profit!!, but HP may have left those out as well.
I only look human.
My mother is a halfling and my dad is an ogre, so that makes me an Ogreling
People who benefit most from M&As are the wall street fat cat investment bankers. They are always on the prowl for creating marriages where none exist. The Company management usually is a weak defense against the might of these wall streeters, who combine smarts, aggression, money and massive selling skills to unsuspecting and often incompetent management. These guys are masters are discrediting company insiders who know something about the product and market while promoting insiders who spout their line of thinking. I have seen this used by some of the VC sponsored companies that have used these underhanded tactics.
...it's the ghost of 100VG laughing from it's grave!
Comment removed based on user account deletion
To answer the inevitable question: 3Com, huh?
3Com made tape, so they got into backup tapes, then hardware and floppies and crap, and never looked back.
(-1: Post disagrees with my already-settled worldview) is not a valid mod option.
(I threw a U in there and replaced 3 with 133t E, and relies on british spelling apparently)
Cad Copped Moms Cheque
Comp Mod Spaced Cheque
Champ Ceded Cop Mosque
Chap Ceded Comp Mosque
Mac Cheque Comps Doped
Camp Coded Cheque Mops
Camp Comped Cheque Dos
Sod Comped Camp Cheque
Pomp Coded Cheque Scam
Dammed Cop Cops Cheque
Damp Coed Comps Cheque
Damp Codes Comp Cheque
Squad Emceed Comp Chop
Quad Specced Chemo Mop
Quad Specced Emo Chomp
Quad Specced Chop Memo
Quad Secede Chomp Comp
Quad Schemed Cope Comp
Quad Coed Sec Comp Hemp
http://wordsmith.org/anagram/anagram.cgi?anagram=hpedscompaquEcomdec&t=1000&a=n
People said that back in the Dot.Com era, too. Of course it always has to be a nebulous black box... Nobody will dare say WHAT value that is, because it didn't add up then, and it doesn't add up now. The most popular was "adaptive" something-or-other and man-power savings, at a price that would take hundreds of years to pay off...
In short, with a trivial amount of effort, you can find adequate, or even superior products, for a much lower price.
It's a great position to be in during the boom, but it's also the first to go when anything changes, and people are forced to justify their decisions.
Slashdot gets worse every day... Pipedot: News for nerds, without the corporate slant