When Hewlett-Packard Co. (HPQ) announced the $2.7 billion purchase of 3Com Corp., it let the world know that H-P intends to compete fully with Cisco Systems Inc. (CSCO) in the corporate data center.

With its strength in Ethernet, 3Com (COMS) gives HP a major piece of the pie, but it still needs a few more slices if it wants to be a one-stop-shop for data centers. One such slice it might go after next is application acceleration, said Catharine Trebnick, a senior research analyst with Avian Securities.

Application acceleration appliances speed up the delivery of programs from a data center to the people using it, using methods such as balancing the workload across machines.

Prior to HP’s announcement yesterday, many analysts speculated publicly traded F5 Networks Inc. (FFIV), a leader in this space, was a likely acquisition target, but most now have soured on that idea.

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Technology companies are launching big advertising campaigns as they wager on a pickup in business spending and jockey to have their products stand apart in an environment where new customers are hard to find and competition is intensifying.

Companies such as Google Inc. (GOOG) have recently embarked on major ad pushes. This month, Google rolled out globally an ad campaign to flag its Gmail service and Google Docs word processing and spreadsheets. It’s an unusual move for the Internet giant, which has done little traditional advertising.

On Thursday, Juniper Networks Inc. (JNPR), a maker of networking gear, is starting its first-ever global campaign to raise awareness of its brand. Its bigger rival Cisco Systems Inc. (CSCO) last week launched new radio, print and online campaigns promoting a line of products for small businesses and a new system for corporate computer rooms.

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Raising estimates on expectations of stronger spending by telephone companies, Barclay’s Capital analyst Jeff Kvaal today raised his rating on Cisco Systems (CSCO) to “Overweight” from “Equal Weight” and raised his price target to $28 from $24. Cisco shares are up $1.12, or 5%, at $23.75.

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Cisco Systems CEO John Chambers was one of the first tech executives to predict that the recession–then limited to the financial sector–would spread to the rest of the economy. Now he’s among the first to say it’s on the way back.

The economy has started a “gradual recovery,” Chambers said Wednesday during a meeting with Wall Street Journal reporters and editors, echoing optimism he expressed when discussing Cisco’s fourth-quarter results in August. Chambers said that he bases his assessment of the economy on several factors, including the stock market, conversations with customers and the rate at which Cisco (CSCO) receives orders. Based on these criteria, he believes that the U.S. is coming out of the recession. He added that Asia seems to be picking up as well, but that he expects Europe to lag behind.

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Microsoft Corp. (MSFT) and Nokia Corp. (NOK), once bitter rivals in the mobile market, formed an alliance to strengthen their positions at a time when other competitors have become far more troublesome.

The deal between the two companies will bring Microsoft’s Office programs and other software to Nokia phones. It is aimed squarely at the professional market that Research In Motion Ltd. (RIMM) targets so successfully with its BlackBerry line of smart phones.

For Microsoft, the deal is an attempt to increase the appeal of Office–a lucrative franchise that includes Word, Excel and other productivity programs–to a business audience that is being courted by competing products from rivals that range from Google Inc. (GOOG) to Cisco Systems Inc. (CSCO). Financial terms of the deal weren’t disclosed.

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Cisco Systems (CSCO) on Wednesday held a news conference with Warner Music (WMG) to promote software to create and manage Web sites, one of nearly 30 new businesses the tech-equipment maker is getting into that it says has the potential to someday reach $1 billion in revenue.

Cisco still makes most of its money from sales of networking gear, such as routers and switches. But in the last several years, Cisco has expanded into new areas, some as far flung as consumer video cameras and big-screen TV systems for sports stadiums. The Journal wrote about the new businesses and the management structure necessary to manage them last week.

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It’s a terrible day to be some big tech company, folks. Following disappointing quarterly reports by Microsoft (MSFT) and Amazon.com (AMZN) that sent their shares down eight percent this evening, Juniper Networks (JNPR), a $14 billion (market cap) competitor to Cisco Systems (CSCO) this evening reported sales and profit for its Q2 that beat estimates, and a better-than-expected forecast, but it wasn’t enough for the stock.

Juniper shares fell $2.30, or 8.7 percent, to $24.25 in after-hours trading, after rising four percent during the regular session.

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Internet traffic will increase fivefold over the next five years, driven in large part by a jump in the amount of video transmitted across the network, according to Cisco Systems (CSCO).

The finding highlights a study of the demand on communications networks between 2008 and 2013 that the computer-equipment maker plans to release Tuesday. Along with the study, Cisco is also releasing an application that lets people track how much bandwidth their day-to-day activities consume, and another one for iPhone and BlackBerry owners that tracks how fast the devices connect to the Internet from different locations.

(You can download the apps here.)

By 2013, Cisco expect Internet traffic–in this case a broad category that includes delivery of content to televisions and mobile phone–to reach about 56 exabytes per month, up from about nine exabytes per month in 2008.

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Cisco (CSCO) on Monday announced an initiative to sell high-tech gear to utilities, a market the company says could be a $20 billion-a-year market by 2014.

Political junkies may have heard the term “smart grid,” which is one of the areas that the Obama administration has targeted with its stimulus package. The government is committing billions to facilitate building a next-generation electrical grid that’s more energy efficient.

Cisco looks at all this talk about green and sees, well, green. In order to improve their networks, utilities will need to buy routers and switches and other gear that Cisco just happens to sell. Cisco introduced energy-management software in January, and it will no doubt come out with other products that it will package together for utility companies.

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As I noted earlier this month, the recent Cisco Systems (CSCO) decision to to move into the server business came with the risk that it might irritate both IBM (IBM) and Hewlett-Packard (HPQ), both of whom control big pieces of the server business while also reselling Cisco networking gear. In my previous piece, I noted that there was a growing belief on the Street that IBM was likely to partner with Brocade (BRCD) and possibly others in an effort wean itself away from selling Cisco switches to its customers.

Well, today IBM made it clear that is is pressing ahead with its anti-Cisco strategy.

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The rumor mill has been swirling for months now that Cisco Systems, the giant maker of networking hardware, is going to start selling computers, too. The big reveal is almost here: Cisco (CSCO) on Monday plans to tell the world what it has been working on in secret for the last two years.

Though the company is still holding back details, it has not disputed speculation that points to a kind of “blade” server, the compact back-office machines that power corporate data centers. The blade design uses hardware modules that are arranged vertically–-like books on a shelf–-and plug into a chassis. People who have seen the hardware describe a refrigerator-sized chassis that can accommodate computing blades–powered by x86 microprocessor chips from Intel (INTC)–as well as networking blades.

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Amid a recession that has many families cutting back on their spending, sports teams are trying to find new ways to lure fans to their stadiums and off their couches. One part of the strategy will be on display this weekend at the NBA All-Star game in Phoenix.

Fans in the city will get a behind-the-scenes look at the festivities and be able to interact with some of the league’s stars–thanks to a high-definition video-conferencing system. The system, called TelePresence and made by Cisco Systems (CSCO), uses giant screens to create an experience as close to a face-to-face meeting as possible. (Cisco is one of the NBA’s “official partners,” so it gets to use league events to promote its products.)

“When people come to a major event like All Star they want to feel like they have something special and not just sit in a seat,” says Steve Hellmuth, executive vice president of operations and technology for NBA Entertainment. “This technology lets fans have a special in-person experience with a player.”

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Cisco (CSCO) CEO John Chambers just might be one the most careful executives in the Valley about talking to the press; in a brief chat with Tech Trader Daily at a media reception last night, he didn’t give away much about his views on the state of the economy or the current quarter. But he did have a few things to say. Here’s a summary.

• On the state of the economy: “I’m going to pass on the economy question,” he said. But he did say that in the current environment, “companies with cash are king, queen and the royal family.” Cisco has close to $27 billion in cash and short-term investments, and the total continues to climb.
• On acquisitions: Chambers says Cisco is always aggressive in making acquisitions during downturns. He says the best time to make acquisitions is during downturns.

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Nortel Networks (NT) the once multibillion-dollar telecom vendor now trading as a micro cap, may be considering offers of as much as $1 billion for its product portfolio of gear that lets phone companies string Ethernet networking to homes and businesses, according to a report in the Toronto Globe & Mail. Avian Securities’ analyst Avi Cohen argues the most likely bidders are Ericsson, Huawei, Nokia’s (NOK) Nokia Siemens, and Cisco Systems (CSCO), with Alcatel Lucent (ALU) and Motorola (MOT), less likely because of their own titanic problems.

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Here’s the latest theory from Trip Chowdhry, the tech analyst at Global Equities Research: Silicon Valley is headed for a four-day work week in 2009.

His notion is that the recent layoff spree in the Valley will slow down; but that companies trying to hold on to their talent while awaiting a recovery will shift to a four-day work week instead. Save money, but keep your talent. At least that’s the theory.

Chowdhry contends that National Semiconductor (NSM) will adopt a four-day work week for all of 2009, and that Cisco Systems (CSCO) is considering the same idea. He says his contacts believe almost every Silicon Valley company could adopt the idea, including Oracle (ORCL).

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