HP Buying Palm for $1.2 BillionHP Buying Palm for $1.2 Billion

Can the acquisitive HP breathe new life into a mobile company that has seen better days?

HP continues its buying spree, announcing today that it would acquire Palm for $1.2 billion.Rumors about Palm being on the block have been flying for a couple of weeks now (Michael Finneran blogged about it here), but I don't remember hearing HP mentioned prominently before today's announcement.

I'm out at Interop this week, and much of the talk here has been about the escalating HP-Cisco battle, with each appearing to want to one-up the other, get into a market where the other plays, and generally go toe-to-toe.

So now, with Palm, HP has a mobile-device play for public wireless networks, something that Cisco lacks, although there had been rumors about Cisco developing a tablet along the lines of the iPad (interestingly, this article speculated that Cisco would enter the tablet market by being the one to acquire Palm).

So score one for HP in the Cisco rivalry; they beat Cisco to the mobile-device play. Will Cisco follow? Does it need to? Before the HP-Palm deal, this blogger was suggesting that Cisco should acquire RIM.

So where does all this shake out for enterprise communications? It's still not clear to me where HP plays as a strategic communications vendor--we have yet to get a clear indication of what HP's doing with the 3Com VOIP portfolio, and now comes Palm. Will HP position Palm primarily in the consumer space?

Oddly enough, HP right now stands as--in theory--potentially the most complete end-to-end communications vendor. They own a VOIP portfolio with 3Com; data lines with ProCurve/3Com; and now mobile devices and OS with Palm. This is backed up with datacenter and also a strong security play with Tipping Point, the security subsidiary of 3Com.

That's in theory. In practice, of course, "moribund" would probably be a generous way to describe the 3Com VOIP product line. If HP wants to be a voice vendor, it may not have to start from scratch, but it'll certainly have its work cut out for it. Likewise, Palm itself was, to quote the title of Michael Finneran's post linked above, at the fork in the road--"Up for sale or down for the count?"

It may take "Extreme Makeover: Corporate Edition" for HP to bring all these products and technologies to new, robust life.Can the acquisitive HP breathe new life into a mobile company that has seen better days?