This morning, HP and 3Com announced that HP will acquire 3Com for about $2.7 billion. Obviously, with HP's Procurve unit currently the only company other than Cisco to enjoy a spot in Gartner's leadership quadrant for enterprise LAN and 3Com's focus on all things networking, there is quite a bit of overlap between HP's current offerings and those provided by 3Com. At the same time, this acquisition will help HP expand their share of the networking market. But there is a distinct possibility that HP's expansion in enterprise LAN and the resulting product changes that will probably have to take place could change HP's current approach, which have been very customer-friendly, to policies that might not be quite as beneficial to the customer but that would improve the bottom line for HP.
At Westminster College, we're committed HP Procurve customers; we jettisoned our Cisco infrastructure back in the Spring of 2007 and have been extremely happy ever since, both from a functional standpoint as well as from a financial standpoint. Frankly, I'm a pretty big Procurve fan. As far as 3Com is concerned, the company, in my opinion, hasn't exactly made particularly good decisions over the years. Back in 1999, I had just completed the installation of a 3Com CoreBuilder 9000 core switch when 3Com made the surprise announcement that the company was exiting the enterprise networking space. Part of me is happy to see HP acquiring 3Com and I hope that the merger goes smoothly. There are, however, a few items I'll watch for. Note that the items on my list are considered as an existing HP customer.
- Continuation of HP's lifetime warranty. From a value perspective, one of the best things about Procurve is the lifetime warranty that accompanies most of their networking equipment. The lifetime warranty is included in the device purchase price and is a true lifetime warranty; it's in force for as long as you own the equipment. No expensive annual contract necessary. As HP's Procurve line grows in popularity, will this lifetime update eventually go away in favor of a more limited warranty?
- Ability to download free software updates. As is the case with the warranty, HP currently provides software updates free of charge. Other networking companies require customers to have a support contract in place to get software updates. Software updates can extend the life of the equipment by adding capabilities that were not available at the time the equipment was purchased. Like the lifetime warranty, if HP hits critical mass and decides that software updates make a good profit center, customers could lose out.
- Maintenance of excellent pricing. Frankly, Procurve equipment is priced very well. I won't say it's cheap because it's also of high quality so perhaps a better word is that HP brings a great value to the table. Unfortunately, as companies - and units within companies - grow, sometimes it becomes easier to start charging more. As things stand now, HP is the value proposition when compared with offerings from companies such as Cisco. As the company's networking unit grows and becomes more entrenched in the market, HP may not need to maintain current pricing in order to stay generally competitive.
- Seamless integration of product lines. Although I'm a fan of HP Procurve, the line is not complete, which is probably why the company made the 3Com acquisition. For example, even though HP offers higher-end networking equipment, some of it is simply rebranded offerings from other companies. With the 3Com acquisition, HP can develop and sell native equipment and fill in the gaps in the Procurve line. Obviously, since HP and 3Com have different lines, there is likely to be a transition period in which customers may need to obtain equipment that might not yet be fully integrated, but I do look forward to quick compatibility issue resolution as well as quick turnaround on bringing 3Com's products under HP's Procurve Manager management umbrella.
As a CIO focused on selecting products that meet both my need and my budget, seeing the results of this merger prior to our next network refresh in 2011/2012 will help to inform us on future direction as it pertains to our infrastructure. The four items above will play a key part in a decision as to whether or not to continue with Procurve at replacement time.
Since 1994, Scott Lowe has been providing technology solutions to a variety of organizations. After spending 10 years in multiple CIO roles, Scott is now an independent consultant, blogger, author, owner of The 1610 Group, and a Senior IT Executive with CampusWorks, Inc. Scott is available for consulting, writing, and speaking engagements and can be reached at firstname.lastname@example.org.