From Today's Computer Reseller's News re: BAY/NT and 3COM:
3Com Seeks Its Place In A Changing World
By MargieÿSemilof
New York
12:50 PM EDT Fri., June 19, 1998
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While one of his primary competitors has found solace as a division of Northern Telecom Ltd., Eric Benhamou, chief executive of 3Com Corp., said his company is not for sale.
In an interview at PC Expo here this week, Benhamou said convergence of voice and data networks is driving mergers like last week's union of Bay Networks Inc. and Nortel. But he said that he believes a combined Bay Networks and Nortel gives neither company a market advantage.
"Bay [Networks] does not bring to Nortel any real expertise in the ISP or carrier area, and Nortel does not bring to Bay [Networks] much expertise in the enterprise or in small businesses," Benhamou said. "There is no synergy."
3Com prefers to remain independent and align with strategic partners, he said. In 3Com's case, that partner is Siemens Rolm Communications Inc. Benhamou said 3Com is strategically intertwined with Siemens on all levels. Both have selected the same platform and make similar architecture choices.
The fruit of this union? Not much yet. Recently, at CEBIT, 3Com demonstrated voice over IP using a Siemens carrier switch, and at Networld Interop, 3Com showed off a Siemens PBX integrated with 3Com's Superstack remote-access system.
Benhamou said he chooses not to make incursions into telecommunications manufacturing, as Cisco Systems Inc. has done. Rather, Santa Clara, Calif.-based 3Com will build access products that complement switches built by companies such as Lucent Technologies, Nortel and Siemens
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Benhamou said Bay Networks had become too similar to Cisco and that it had, in effect, been on a collision course with the giant switch maker. Cisco, San Jose, Calif., is emphasizing carrier-class networks in addition to its traditional focus on the high end of the enterprise.
Cisco appears to want to remain independent too. The company recently approved its own shareholder protection plan to guard against an unfriendly takeover. Some financial analysts said a company would have to come up with about $100 billion to buy Cisco. But 3Com is another story, and it remains to be seen whether 3Com has the fortitude to remain independent.
Benhamou said the success of converged voice and data networking for small to midsize businesses depends on having a critical mass of resellers trained to work with data and voice. But Benhamou also said 3Com has not done much to train VARs to sell voice gear.
"That's a skill that Siemens will help provide," he said.
When it comes to picking 3Com's strengths and weaknesses, analysts said 3Com is all over the map. The company is first or second in terms of remote-access servers but second or third in providing enterprise gear. It also is just recovering from the difficult digestion of U.S. Robotics Inc.
Overall, it is still struggling to figure out where to dominate.
"[3Com's] biggest challenge is where to take the company, and its competitors are only getting bigger," said Maribelle Lopez, an analyst at Forrester Research Inc., a Cambridge, Mass., consulting firm.
"They used to be looking at the Ciscos and Bays, but now it's the Lucents and Nortels," she added. "It's high-stakes poker. How much do you need to stay in this game?" |
