3Com CEO

Despite years of upheaval that caused some to wonder about 3Com Corp.’s commitment to its enterprise customers, the network gear maker’s executives say their company aims to impress jaded Canadians with new products and a novel marketing mantra. We want to be the leader in secure, converged networks in the enterprise.Bruce Claflin>Text

In an interview at 3Com Live, the network manufacturer’s meeting place for partners and customers (held in Las Vegas from March 9 to 11), CEO Bruce Claflin said 3Com would use its ever-widening product portfolio to impress businesses seeking new connectivity hardware and software.

“We want to be the leader in secure, converged networks in the enterprise,” Claflin said, pointing out that equipment like the recently shipped-to-market Switch 8800 for Terabit connectivity and new business arrangements such as 3Com’s acquisition of intrusion prevention system provider TippingPoint Technologies Inc. early this year should help the company reach that goal.

But it’s going to take some work to convince people that 3Com should be their go-to vendor for secure voice, data and wireless equipment, noted James Freeze, the firm’s vice-president, global marketing. He said one of 3Com’s major challenges has to do with getting the message out that the company offers much of the networking equipment required for secure, device-agnostic connectivity.

“We could do a better job of educating all constituents,” he said, adding that “a fairly substantial re-branding campaign is on the way” this fall in order to spread the word that 3Com offers wireless, wireline, data and voice technologies, as well as a mix of any of those network offerings.

If 3Com’s execs sound sure of themselves, it contrasts mightily with the way the firm conducted business over the past few years. 3Com’s history is full of ups and downs stemming from one oddball decision circa 2000.

Back then the firm announced it would pull out of the enterprise arena and focus on the small- to mid-sized business (SMB) and carrier markets. It discontinued its CoreBuilder switches, which were meant for enterprises.

The pullback annoyed some customers. “When we had upgraded the [CoreBuilder] 9000s, we anticipated that 3Com would be in this business for a long time,” said Tony Crognale, a network technician at Arizona-based Scottsdale Insurance, during an interview in 2001. “It wasn’t but 30 to 60 days after we switched over…that 3Com announced their plans. This threw a wrench in the works.”

(The decision also profoundly impacted a Canadian institution, although it seems there are no hard feelings. See accompanying article.)

But since then 3Com has been working to re-establish itself in the enterprise sector. In 2001 it created the Business Connectivity Company to serve all sizes of businesses with LAN, wireless and IP PBX technology.

In 2003 it introduced the Switch 7700 as an upgrade for CoreBuilder customers.

It sold pieces of its carrier equipment division – something of a surprise from a firm bent on impressing network service providers just three years earlier.

In 2003 3Com entered a joint venture with Huawei Technologies, a network gear maker in China, to further develop enterprise equipment. And there’s the TippingPoint acquisition, which provides the crucial embedded security element of 3Com’s secure convergence play. “It’s probably a smart move, given the attention security as a whole is getting with enterprise customers,” said Roberta Fox, senior partner of Fox Group Consulting, an IT advisory firm in Markham, Ont.

But last year 3Com laid off its Canadian country manager less than six months after hiring him. This March 3Com laid off 220 employees in an effort to cut research and development costs and product management expenses.

Regardless of the undulations, 3Com’s execs say the business is on track.

Claflin said the enterprise bailout is “ancient history.” So much has changed since then. 3Com has beefed up its IP phone platforms to keep abreast of new networking standards. Its wireless gear is coming on strong too. In all the company has more to offer now that it did before, and it’s dedicated to the enterprise, according to Claflin.

And now 3Com’s former fans are returning for network upgrades. “The CoreBuilder customers are the leading cause of business today,” Claflin said.

Fox pointed out that 3Com might have been prescient to exit the enterprise when it did, in around 2000. “In the last four or five years people haven’t been doing massive infrastructure projects anyway. If there were ever a time your absence wouldn’t be noticed, it would probably be then.”

Bill Farkas, co-ordinator of Sheridan College’s Telecommunications Technology Program in Oakville, Ont., said 3Com had its fortune-telling goggles on, and sidestepped the telecom equipment market bubble burst of 2001.

“Everybody was growing at an almost terrifying rate. The mergers and acquisitions were almost every day in the papers. Stocks were going up. All of a sudden 3Com says they’re pulling the pin on it. It was almost anti-corporate. But in some ways, it was bright. They managed to avoid the pop.”

But with no Canadian country manager on the payroll now, how does 3Com expect to convince Canuck customers that the firm is committed to this country?

Claflin pointed out that Nick Tidd, 3Com Canada’s former leader, continues to play an important role here, even though he now runs the vendor’s partner program.

“I am sensitive to the Canadian market,” Claflin said.

3Com’s executives also said the workforce reductions announced earlier this month wouldn’t impact actual R&D output. They said some R&D duties have been ported over to the Huawei team – shuffled but not gone.

“I see us pushing up the pace of product introductions leveraging the [3Com-Huawei] joint venture,” said Hilton Nicholson, 3Com’s senior vice-president, product operations.

Perhaps it’s no surprise that 3Com, over the course of five years, changed its mind so drastically about where it should focus its efforts – twice. Fox said vendors are quick to switch tactics these days – enter new sectors, abandon old ones, amend their selling methods, etc. “It used to be a vendor would stick to the plan for three to five years. Now it’s maybe one year, or one to three years.”

But sometimes it’s important to stay the course, she said. After all, “it takes time to see the results of the strategy.”

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