Now Hear This!

Hewlett Packard Monday announced that it has signed a definitive agreement to acquire Colubris Networks, a privately-held provider of wireless networks for enterprises and service providers.

PCs have been lauded by both the SIA and Gartner in the last week as a key driver of semiconductor sales growth and as a surviving buffer against the economy’s lower consumer spending. But that, of course, won’t hold out forever and Gartner has suggested that the semiconductor industry needs to turn more to IT departments as drivers for business growth.

The move to bring more wireless capabilities and hardware into HP’s house signals a stronger push for the top PC OEM into office wireless, a growing market, and a move that will presumably make that market (as well as HP) less dependant on Wi-Fi chipmakers as HP merges the Massachusetts-based company’s technology into its ProCurve Networking product portfolio portfolio.

Further, with the acquisition – which HP said will extend its ProCurve's reach into vertical markets such as hospitality, transportation, healthcare, manufacturing, and education – HP has Cisco in its cross hairs. If HP takes business from Cisco, that could be hard on the distribution market, which Cisco employs and which openly celebrated Cisco’s recent better-than-expected quarter.

So, in short, the acquisition is a good one for HP, especially as it continues to become more services driven, but a bad one for the semiconductor industry, as HP edges some of its players out. Agree or disagree? Comment below.

--Suzanne Deffree, Managing Editor, News