Enterprise commitment and 3Com don

The enterprise networking vendor community could use some healthy competition.

Merely on principle, customers should have a multitude of options when considering a choice of suppliers. And competition is good — for customers and suppliers — because it drives low price, high quality, technical innovation, and keeps the market leaders from feeling too comfortable and complacent.

And if it were a company other than 3Com Corp. looking to compete more forcefully in the large business customer space, there might be reason to feel pretty excited. That it’s 3Com attempting to claw its way back into the Canadian enterprise market is a stated commitment that, from a customer perspective, probably needs to be absorbed with a large grain of salt. The word came during 3Com Live — a partner/customer event in Las Vegas last month, where among other things, the company announced a plan to reassert an enterprise vision, proclaiming yet again a commitment to be an legitimate enterprise player.

It’s a promise that’s been given on many occasions. 3Com has been in and out of the enterprise more often than Mr. Spock.

The 3Com push began in early March with an announcement of the Switch 8800 as the company’s core offering for large enterprise networks. That’s all fine and nice, but given past history is anybody convinced that 3Com should rightly be considered a strategic enterprise partner? Who’s ready to hitch their enterprise communications wagon back onto the 3Com train? Anybody? Somebody?

This is a company that jukes and jives a whole lot. Its enterprise dabbling goes at least as far back to 1995 when it acquired high-end hub maker Chipcom Corp., which vaulted 3Com to the lofty position of Number 2 player in data networking. Even at that time, the hub market was drying up while switching was well positioned as the future. But the acquisition did bring some enterprise legitimacy, if not enterprise customers, to 3Com.

Since that time, the company has been back and forth in both its enterprise and Canadian market commitment, proclaiming at various times a greater and lesser core enterprise focus through a parade of Canadian country managers that have come and gone. Truth is that 3Com has always known how to be highly effective in the smaller business space. Arguably the company’s all too indirect approach was not nearly as effective with big business.

Some of the acquisitions made over the years have been confusing. Two years after acquiring Chipcom, 3Com went the other extreme and purchased modem-maker U.S. Robotics, a deal that seemed to suggest a stronger commitment to SMB was taking shape.

Enterprise appeared to be a periphery focus at best until 2000 when there came the “official” word that 3Com was backing away from enterprise LAN and WAN switching, and instead focusing on IP telephony, broadband access, home networking and wireless. Around that time, in its fiscal 1999, 3Com reported earnings of US$5.8 billion annually — and, according to IDC at the time, approximately $184 million in Canada. The most recently reported worldwide quarterly total amounted to a mere US$161 million and 3Com is clearly a shell of its former self.

3Com in Canada has a less than proud heritage. There’s a head office in Oakville, but seemingly no country manager — and there hasn’t been for more than a year. Prior to that, Bruce Comeau, a nice guy and the last top executive in Canada stayed on the job for about six months. In 1998, IDC Canada reported 3Com Canada employed more than 120 people. Today, you’d be hard pressed to find anybody and 3Com has more than once refused to say how many employees there are here.

3Com’s business credibility took a serious hit during the “grey market” scandal of December, 1999, where the Canadian company’s president was fired and legal action launched against him as a result of 3Com Canada products that had been sold in other regions around the world and below market price.

What’s a Canadian enterprise customer to do? Does anybody understand the company’s Canadian market strategy? Yes, reselling partners are key in the distribution and support of products. But is there a 3Com throat to choke in Canada?

Clearly, for a company with aspirations of becoming a Canadian core enterprise player, 3Com simply doesn’t look like it can handle the job. A year ago, during a press/analyst conference in Boston, as the company was revealing its strategic targets for concerted market focus in the coming year, Canada was not among the regions deemed worthy of such effort, although Mexico was.

In a later conversation I had with 3Com senior management executives where they were confronted with that fact — and reminded that Canada was the 7th largest IT market in the world — their response to me was to suggest that maybe the Canadian organization simply hadn’t petitioned hard enough to gain the extra effort and investment by the company. Truth was that there wasn’t much of a Canadian organization left to lead that charge.

There are a whole lot of enterprise customers here who’d like to seriously consider alternatives other than the current market leader. Unfortunately there’s little to suggest that 3Com is an option.

– McLean is editor-in-chief of ITWorldCanada and can be reached at dmclean@itworldcanada.com

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