Hewlett-Packard Co's $3.1 billion play for 3Com Corp will help the technology giant expand its product portfolio amid rapid industry consolidation -- and few think HP is done shopping.

HP's deal for 3Com should allow it to better compete with networking leader Cisco Systems Inc, analysts say, as HP pushes to become a soup-to-nuts provider of technology products and services.

Wall Street largely applauded the acquisition as a low-risk move by HP to add a complementary product line, bolster its range of offerings, and get welcome exposure to the China market.

HP's deal-making is expected to continue even though the company is still digesting last-year's $13 billion acquisition of IT services company EDS.

Given Cisco's recent flurry of deals, and with rivals IBM and Oracle Corp on the prowl, the competitive pressures won't wane any time soon.

I don't think this is the end game, said Kaufman Brothers analyst Shaw Wu.

HP is the world's largest technology supplier, so analysts say it is tricky to predict which way it will go next with M&A, be it software, storage or a continued emphasis on networking.

Wu said a software acquisition likely makes the most sense for HP given that software companies have higher margins, but said there is a dearth of attractive names on the market. Because of that, he said HP could continue focus on networking.

Customers are always looking for an alternative to Cisco, he noted.

Wu said Brocade Communications Systems Inc is now an unlikely HP target following the 3Com deal, and Juniper Networks would be expensive. But he mentioned more specialist networking names such as F5 Networks Inc and Riverbed Technology Inc.

JP Morgan analyst Mark Moskowitz said HP could aim to bolster its higher-end server and storage platforms and make a stronger push into software management, data warehousing, and business intelligence.

We do not think the proposed 3Com deal is the last big move, he said in a research note.

Brocade shares fell 13 percent as brokerages downgraded the stock and ruled out an HP deal.

HP, which has bought more than 30 companies since Chief Executive Mark Hurd arrived in 2005, is a major player in personal computers, servers, IT services and printers.

Stifel Nicolaus analyst Aaron Rakers said it was no surprise that HP wanted to establish a bigger presence in networking with the 3Com buy, and said he would now expect them to turn their attention to storage and software.

I think this gives them something to build on, I don't expect them to go out and make another acquisition in that area, he said.

Pacific Crest Securities analyst Brent Bracelin called the 3Com deal a relatively low-cost way for HP to more than double the size of its ProCurve networking business.

Looking at potential M&A targets, he mentioned Avaya-Nortel, if HP wanted to build a presence in telephony, and Polycom Inc in videoconferencing.

I think that would be an interesting second step for HP. he said.

(Reporting by Gabriel Madway; Editing by Phil Berlowitz)

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