November 12, 2009 by USA Post
Leading the call: Dave Donatelli, EVP of H-P’s servers and networking business.
5:34 pm Jim Burns, vice president of investor relations, notes that this deal won’t have the same financial impact as H-P’s acquisition of EDS. The company has bought more than 30 companies since CEO Mark Hurd joined and has a strong track record of acquisitions and integration — “Integration is every bit as important as who you’re buying” — he says.
5:29 pm What happens to 3Com’s brand–will it disappear? We’ll discuss after the acquisition closes, H-P says.
5:29 pm Every customer I speak to has asked us to do more networking, Donatelli says.
5:26 pm Shannon Cross at Cross Research asks how we should judge the success of this deal. First step is getting it approved, H-P says, but longer-term you can evaluate based on market-share gains.
5:23 pm Ananlyst asks why 3Com has been so successful in China and less so in other markets. “Their challenge is having the scale in the go-to-market space,” the ability to show up at deals in enough places, Donatelli says–something H-P can assist with.
5:22 pm Donatelli declines to say who else H-P looked at but says that 3Com’s new products were key. “We think they have a long runway ahead of them,” he says. The company’s work in China was also important–H-P sees it as a critical IT market in the years ahead. H-P also tested 3Com products itself, and Donatelli admits that its data-center staffers were skeptical initially but have since become fans.
5:18 pm Q&A starts. Bill Shope from Credit Suisse asks what synergies we can expect. “We bought this to grow, and there’s no two ways about that,” Donatelli says. H-P values 3Com’s engineering expertise, so synergies will be “typical” and come up in things like G&A.
5:15 pm Today’s acquisition is part of H-P’s larger strategy around what it calls “converged infrastructure,” Donatelli says.
5:13 pm In May, 3Com introduced a new product family of data-center switches that increases performance and uses less energy and won plaudits from industryanlysts Yankee Group, Gartner and IDC, he says.
5:10 pm H-P networking customers have been asking the company to do more in that market, he says.
5:09 pm 3Com has 32% of the enterprise switching market in China, he points out.
5:08 pm H-P looked around the entire networking sector, he adds, and chose 3Com for its products, open-industry standards, “a ton of innovative technology” and its R&D center in China.
5:07 pm This deal creates “a new global networking leader,” he says, and will make H-P No. 2 in enterprise networking world-wide, “a very important space for us.”
5:06 pm “We think today is a very exciting day for our customers and the industry,” Donatelli says.
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