Nov/092
HP takes out 3Com- what is the next consolidation step?
HP-3Com - ushering a wave of tech consolidation?
People have been asking me for a while what the next 'shot' would be in the tech titan border-clash. Cisco entered the server market with UCS, and everyone was wondering what the response would be.
I didn't think 3com would be taken off the market this quickly, I figured everyone would wait a year or so to see if 3Com could be successful in breaking back into the global marketplace, outside of China, with their current and new product lines. HP, taking some risk in that department, made an aggressive move knowing that HP has the global footprint and 3com has strong roots in China that HP can leverage. I have to say it's an impressive bit of M&A.
But what is next?
The real question is how will others respond to this move. What will IBM do? What will Dell do? I have postulated for some time that we are in a phase of consolidation where the tech-titans, in order to have competitive portfolios, will acquire or build these capabilities.
Neither IBM, nor Dell have data center networking presence, both have partnerships with Juniper and with Brocade. A lot of people were betting on an HP-Brocade acquisition, as evidenced by the share price impact on Brocade today. And who can count out Oracle/Sun? They also do not have a networking footprint.
I think the major players will wait for a quarter or so, through the holiday season - evaluating their options and also seeing how HP rolls up the 3Com acquisition. If it creates competitive advantage for HP then IBM, Dell, and Oracle will follow in HP's footsteps. I can't say who will acquire who, but there is only a small universe of potential acquisition targets as well.
Does this spell the end of independent networking?
dg
Author: Douglas Gourlay
high-tech executive with interests in networking, virtualization, cloud computing, and IT/Tech government policy. VP of Marketing at Arista Networks - this blog reflects Doug's personal views and opinions and not necessarily those of Arista Networks.Additional comments powered by BackType
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November 12th, 2009
One thing we should should be concerned about is the lack of diversity in the Networking Ecosystem. That is, a marketplace thrives and flourishes when there is a diverse range of vendors and stagnates when there are only a few players.
Without that, where are the new technologies, the new products, and the new initiatives ? Will VC fund enough new ideas to keep our market moving ? Or will the market stagnate while the ‘titans’ take profits ?
I’m not sure I can see the answers for these questions.
Etherealmind
January 13th, 2010
Time flies. I thought this was a contemporary post and realized we are post 2 months, so this is almost an archive.
The HP acquisition, IMHO, is all about their market share outside of North America. The last 24 months brought some insight into their IO position in the ROTW and 3Com had a strong position.
Whatever partnership exists with Huawei provides some access to markets and technologies not previously addressed by HP, which leaves us to watch what comes next.
I believe there is more diversity in the network space now than ever. So much so, that the industry is ripe for isolation, starvation and consolidation. What does the following mean and where does it apply?
Isolation. Brocade, Juniper, Extreme….. HP has Pro-Curve and now 3Com. They have little to no interest in giving business to Brocade, Juniper or any other IO provider. They will leverage them to keep Cisco busy and to sell servers, services and software, but… only in a have-to situation. Juniper, while a relevant provider in networking, has a reducing set of partners (read my HP comment above, and now the other partners are IBM and Dell – but they also have their feet in camp with Cisco). The question will be how do they continue to move forward. My sense is it will be with an isolation of market segments (i.e. routing core, versus campus access, versus dc access).
Brocade – what do they do when the major storage vendors release FCoE targets in arrays. The options are file, iSCSI, FCoE – all over Ethernet. FC is interesting, but it is an inertia-based market. So where does Brocade get help? Not HP, as they have an Ethernet business to grow. Not Juniper, not Arista, not Extreme, not Cisco, not EMC… so where? What happens when each Ethernet vendor provides FCF and FIP support to speak directly to the FCoE target on Ethernet… hmmm, no need to have the FCF transition to FC, as the lease is up on the array and the new stuff gives me 3 10G options for target access on Ethernet.
Those who do not grow revenue starve – anyone do Brocade’s financials lately? They starve to the point that they expire or become cheap enough to have the intellectual property purchased, or consolidated. Not to mention with IDC showing that physical server growth between 2008 and 2012 grows at a clip of approximately 5%, but the virtual counts going through the roof, the number of physical IO ports are not increasing, but the performance associated with IO in a virtualization instance is increasing – at least in importance. These are DC related comments of course and have nothing to do with campus or VoIP deployments.
There are multiple access strategies within the data center, but data center IO in my opinion, is a more interesting topic in the area of processor to memory and processor to IO. The relationship between the VM, the memory, the processor and the adapter card is becoming tighter than it used to be and there are even more technologies coming from PCI Express v3 with IO accelerators and other enhancements. I believe this is where the systems are going to start closing or becoming more implementation specific (aka within the compute chassis). This contrast can be drawn at many levels, blade versus rack, SR-IOV versus MR-IOV, monolithic vs rack or module vs POD, etc.
Glad to participate in your blog Doug, hope all is well.