The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.



) --The increasing adoption of cloud computing and penetration of mobile devices are the two biggest trends shaping the IT industry.

While much has been said about the rapid pace these technologies are being embraced by consumers and enterprises, networking is another industry that is growing as much as, if not more from these two trends.

Networking benefits from increased demand for bandwidth capacity and wireless network architecture that cloud computing and mobile devices generate. As a major player in the networking business,


(HP) - Get Report

would gain significantly from these developments in 2012 along with other networking companies such as


(CSCO) - Get Report


Juniper Networks

(JNPR) - Get Report





We currently have a

$42 Trefis price estimate for HP, which is significantly above the current market price.

See our full analysis of HP


The workload demands are increasing Wi-Fi networks because smartphones and tablet devices are usually equipped to connect to the Internet via Wi-Fi at a user's home, workplace, or in public places rather than just the carrier's network. In addition, these devices are also becoming more powerful and capable of sophisticated applications such as videoconferencing that requires even more bandwidth.

As more employees are equipped with such mobile devices, network administrators in enterprises are forced to invest more in wireless networks and less in the traditional wired networks. This will boost wireless networking solutions' demand, with HP and other large players likely to benefit.

Demand for higher-capacity networks is also driven by cloud computing, be it on public or private clouds. As more devices communicate with the cloud to access raw data and applications (which are getting more sophisticated by the day), bandwidth capacity of existing networks will be put to test.

Enterprises will have to invest more in upgrading their network architectures. Again, HP, with its wide range of networking products and solutions, can expect to be a preferred choice for many, especially given its strong client base.

As a result, we estimate HP's networking revenues will increase from around $2.6 billion in 2011 to nearly $3 billion in 2012.



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This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.