A high-end, software-based IP switch from 3Com Corp. is being tested by four large companies for general release in August as part of the network device maker’s efforts to re-establish itself in the enterprise marketplace.
This week, 3Com CEO Bruce Claflin said the switch will scale to hundreds of thousands of users, compared with the hundreds supported by the company’s existing NBX line. The software switch, or “softswitch,” should help Santa Clara, Calif.-based 3Com woo back enterprise customers that were abandoned three years ago, Claflin said. 3Com declined to identify the companies testing the switch.
The softswitch will handle more than voice traffic, including “applications and services that an IP infrastructure can allow you to deliver that are not possible or practical in a traditional telephone environment,” Claflin said.
“If you try to sell VOIP to an enterprise today and justify it on the value-add features, you are unlikely to be successful, because the CEO is saying ‘hard-dollar payback,’ ” he added. “And the way you get the hard-dollar payback is to displace the basic telephone services cost inside your business.”
Claflin said the softswitch supports both IP and public switched telephone network standards, and he claimed that it offers the same 99.999 percent level of reliability of traditional private branch exchanges. It will also provide emergency 911 support for locating a user based on his desktop phone instead of the nearest wiring closet, Claflin said.
He said that 3Com itself is one of the beta sites for the switch and that the company expects to reduce its annual voice costs by 70 percent, partly by eliminating long-distance phone charges. In addition, the company would save on the expense of adding and removing users and by axing conference call costs, which would mean a 13-month payback, Claflin claimed.
The development of a highly scalable IP softswitch impressed two 3Com customers who nonetheless said their operations are probably too small to deploy it.
“We’d probably benefit from the technology enhancements they’d make in developing it,” said Debbi Pryor, CIO at MountainBank in Hendersonville, N.C. MountainBank has saved US$3,000 per month in long-distance charges and thousands of dollars more in IT management costs with 3Com’s NBX technology and LAN switches, Pryor said.
Jim Maass, director of technology for the Tahoe Truckee Unified School District in Truckee, Calif., has installed 3Com voice-over-IP gear in 12 buildings that house 4,500 students, but he said his operation is still too small for the softswitch. “I am a real 3Com advocate,” he said, adding that he hopes the focus on larger customers “doesn’t mean that 3Com forgets about us smaller clients.”
The softswitch is based on intellectual property developed within 3Com’s CommWorks division, which is being sold to UTStarcom Inc. in Alameda, Calif., for $100 million. The sale lets 3Com focus more on enterprises, since CommWorks targeted network carriers, Claflin explained. To deal with what promises to be an “ugly” economy for two to three more years, he added, 3Com will need to capture market share from other big switch.
3Com CEO Explains Renewed Bid for Corporate Business
3Com CEO Bruce Claflin says his fingerprints are among those on the company’s decision three years ago to exit the enterprise networking market. Claflin spoke with Computerworld’s Don Tennant last week about that decision and about 3Com’s latest steps to try to get the high-end corporate business back. Excerpts from the interview follow:
Your recent announcement of a joint venture with China’s Huawei Technologies is another step back into the enterprise business. How much of a credibility problem do you have with enterprise customers, some of whom told us that they felt betrayed and abandoned?
There clearly were a few customers who felt that way, but let’s make sure we put it in perspective. Our total installed base at the time was 4 percent of the market, so that means there’s 96 percent who didn’t have experience with us. And of that 4 percent — now fast-forward three years — the vast majority kept their 3Com equipment.
We lived up to every obligation we had, and they are one of the customer bases we want to go back to first, because there are quite a few of them who feel very good about their products. All of them? Absolutely not. Are there some who were mad at us? You bet. But I think today, particularly given the fact that almost every competitor now has retrenched to some degree, the actions we took then don’t look particularly unusual.
Did you support the decision to exit the enterprise business?
So in hindsight, you don’t think it was a goof?
That’s a different answer. With the benefit of hindsight, I think that directionally we had to make those changes. I think we had very little chance to succeed on the course we were on at the time.
If I had it to do over, though, I would do it differently. First of all, I would have probably exited some of the fading protocols, like [Asynchronous Transfer Mode], and I would have moved to an Ethernet-only strategy. And I think for those products we did get out, we should have had a much longer horizon for customers to make their decisions than we did.
Do you think Cisco Systems CEO John Chambers is worried about Huawei?
Absolutely. He should be. As the industry becomes more standardized, people can come in with a better cost structure and put his business model at risk. Frankly, I think he’s right to be worried. This is a part of our strategy: to attack him from a business-model as well as a product-competency front.