Benhamou likes blaring music and flashing lights:
3Com CEO Eyes Cisco Challenge
(06/12/97; 4 p.m. EDT)
By Kora McNaughton, TechInvestor
SAN FRANCISCO--In his first speech as CEO of the new 3Com, Eric Benhamou told an audience of network managers that the company is mounting a serious challenge to Cisco's dominance of the data networking market.
Benhamou introduced the new 3Com--created from an $8.5 billion merger with U.S. Robotics and made official Thursday-- in a flashy presentation with flashing lights and blaring techno music.
Without ever mentioning Cisco by name, Benhamou portrayed 3Com and Cisco as the only real players in the game.
"Two organizations stand much taller than the others in this landscape, and the gap is widening quarter after quarter," he said. Benhamou dismissed other networking players-namely, Bay Networks, Cabletron and Ascend/Cascade-as a distant third, fourth and fifth, respectively.
It was clear Benhamou had Cisco on his mind when he said 3Com would reach "critical mass" for annual revenues, around $6 billion or $7 billion-roughly where Cisco is now. But Cisco won't be a stationary target.
Despite the merger, which Benhamou claimed will create a 3Com with more than $5.5 billion in yearly revenue, 3Com remains in second place behind Cisco. Analysts' consensus estimates for Cisco's fiscal fourth quarter, ending July 31, are $0.55 per share; 3Com is expected to post per-share earnings of $0.48 for its fourth quarter, which ended May 31.
Benhamou also stressed how the merger would change the nature of 3Com's business. In an industry where the mantra is the "end-to-end solution," 3Com's acquisition of U.S. Robotics gives it a major presence in the remote access and modem markets. The combined company is composed of three business divisions: enterprise, carrier systems and client access, with U.S. Robotics products providing the bulk of the client-access side. "You should no longer think of 3Com as the LAN company," Benhamou said. <Picture> |
