3Com Joins HP

Big news on the technology front, as Hewlett-Packard has said it will acquire networking solutions company 3Com for the sum of $2.7 billion. According to this HP release about the acquisition, both companies' boards of directors have approved the terms of the transaction.

According to TechCrunch, it's possible this acquisition is a reaction to money recently being thrown around by Cisco, a rival of HP. Two of Cisco's bigger recent purchases included a $2.9 billion acquisition in mid-October of Starent Networks, a networking infrastructure provider for mobile operators, and a $3 billion purchase of Tandberg, a video-conferencing company, in late September.

As quoted in the HP release, Dave Donatelli, executive vice president and general manager of enterprise servers and networking said, "Companies are looking for ways to break free from the business limitations imposed by a networking paradigm that has been dominated by a single vendor."

In other words, Cisco has a new competitor. According to this PC World article, "Cisco has operated largely unchallenged in providing routing and networking equipment for data centers, but with the purchase of 3Com, HP is poised to go head-to-head with Cisco." With competition comes, ideally, better products and lower prices.

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