3Com reorganizes Canadian operation

Less than six months after taking the reins at 3Com Canada Inc., country manager Bruce Comeau has been laid off in a company-wide restructuring.

3Com officials said the company remains committed to the Canadian market and that the Canadian operation will continue to run as normal.

“The company’s organization isn’t radically dissimilar to how it was organized before,” said Jim Kennedy, 3Com’s vice-president of sales for the Eastern Region and Canada. With Comeau’s departure, Kennedy will run the Canadian organization as part of his group.

Kennedy said he intends to spend a lot of time in Canada.

“I don’t foresee any major changes,” he said. “Our channel partners will continue to sell to the customers. We’re an indirect company by choice.” If anything, Kennedy said 3Com will increase its commitment to Canada, by making more 3Com personnel available for presentations to potential customers.

“It will be noticeably different in terms of the feet on the street we have,” he said. “We’ll have people and support mechanisms there.”

Dan McLean, an analyst with IDC Canada Ltd. In Toronto, noted that the absence of a country manager in Canada isn’t a new phenomenon for 3Com.

“That’s historically what they’ve done over the years,” he said. “They’ve kind of gone back and forth and I guess it depends on how successful they’ve been in the market up here. I guess if they’re really successful, the tendency is to have an independent Canadian operation, but if it looks like they’re struggling, they tend to pull back their operations to administer them out of the U.S.”

McLean noted that cutting back staff and relying on channel partners isn’t unusual for Canadian network infrastructure vendors. Cisco Systems Inc. is the only one that has a large presence in Canada, he said.

“My sense is no one takes as concerted a focus on the Canadian market as Cisco,” McLean said. “And that has a lot to do with explaining why Cisco is so successful in Canada.”

Canada tends to be one of Cisco’s strongest worldwide markets, McLean noted.

3Com’s global fiscal Q3 figures, released in March, didn’t meet financial analyst expectations. The company lost US$85.6 million in the quarter, compared to a loss of US$79.2 million in the same quarter last year. The most disappointing figure, though, was likely a 21 per cent slide in sales.

McLean noted that 3Com still has a solid base in the small- to medium-sized business market. The company has had trouble making headway in the enterprise market, though. The company has made several efforts to become an enterprise player, only to fail and retrench in its SMB niche.

“I think it becomes an issue of credibility with large business customers,” McLean said. “They wonder if they’re in it for the long haul.”

Enterprise customers are, however, always looking for alternatives to Cisco to help keep prices competitive, McLean noted, so 3Com could have some success in the enterprise.

“It sounds to me like they have a pretty good strategy where they’re looking to penetrate accounts in routing and what they were doing around the embedded security in their prospects,” he said. “It seemed like they had a reasonable vision they were articulating.”

Kennedy said 3Com remains committed to serving the enterprise market through its joint initiative with Huawei Technologies Co. Ltd.

“We see ourselves as a true competitor to Cisco — not as a niche,” Kennedy said.

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