At long last, it seems as if 3Com has made the right choice

Sputter. Sputter-sputter. Look! 3Com Corp. is going to crash and burn! No, wait! It’s coming out of the tailspin! It’s going to make it!

That was close! Good thing 3Com finally had the sense to replace the pilot. The last thing we need is another IT vendor that becomes an acquisition target due to an inability to compete.

That’s exactly what stood to happen if longtime CEO Eric Benhamou had not announced a few weeks back that he will eject on Jan. 1 so Bruce Claflin can take over. And the timing was impeccable. Benhamou’s descent came as 3Com announced its results for the quarter that ended Sept. 1. The company managed to put a positive spin on the fact that it suffered a net loss of US$41.3 million, only because it had taken a real dive the previous quarter, when it lost US$163.7 million.

That enabled 3Com’s public relations flack to say with a straight face that Benhamou was “not making this transition when 3Com is in trouble and is headed in the wrong direction.” When you consider that for the same quarter last year the company actually made quite a bit of money – $113.6 million and change – it’s a stretch to contend that the company was out of trouble when Benhamou announced his exit.

I never thought Benhamou had any business sitting in the pilot’s seat in the first place. I remember interviewing him eight years ago and being tremendously entertained by the fact that his idea of an interview was showing me a PowerPoint presentation about his company. What kind of a CEO needs to rely on a bunch of PowerPoint slides to convey his thoughts? The same kind of CEO, perhaps, who would abandon his big enterprise users by exiting that market after those same users spent lots of money, which in turn enabled 3Com to report figures way up in the black – US$506.3 million in net income. That’s what Benhamou did in March.

But 3Com can’t be faulted too harshly for the timing of the change at the top. Although Claflin should have become CEO when he was brought on board in July 1998 as president and chief operating officer, at least 3Com didn’t wait until it was too late. That’s the fatal mistake Digital Equipment Corp. made.

Before he made the move to 3Com, Claflin was CEO Robert Palmer’s No. 2 at Digital, heading worldwide sales and marketing. I met with both Claflin and Palmer about a year before Compaq Computer Corp.’s 1998 acquisition of Digital and came away convinced that Palmer would have the decency and good sense to step down so that the much more capable Claflin could take over.

I was wrong. Claflin should have been named CEO the moment he joined the company after 22 years at IBM Corp. But what really hurt is that Digital didn’t correct that mistake in time. Fortunately for 3Com’s users and investors, it did.

Don Tennant is Computerworld’s assistant news editor. Contact him at [email protected].

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