More news on our beloved 3COM:
FOR THE RECORD
Where Is 3Com Headed?
<Picture>By Robert Faletra
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With last week's announced buyout of Bay Networks by Northern Telecom, one of the questions that pops up is: Where does all this leave 3Com as it continues its turnaround?
It is no secret, of course, that Eric Benhamou, 3Com's chairman and CEO, has had his challenges, especially since 3Com's acquisition of U.S. Robotics last year.
While 3Com has held its own against Intel's aggressive network-card pricing, margins have been hurt on the low end of its business. On the other hand, Cisco's aggressiveness on the high end has proven formidable in that market.
There are some strong bright spots that are only now coming under attack in which 3Com has solid leads.
One of those bright spots is the handheld arena, where 3Com's PalmPilot is now the de facto standard. The PalmPilot is becoming so ubiquitous I'm somewhat embarrassed when I pull out my Windows CE handheld that is bulkier and somewhat more capable, but which I essentially use to do the same things as the PalmPilot.
What 3Com has yet to do, however, is turn the PalmPilot into an enterprise device that complements the network. While there clearly are a number of third-party solutions that add value to the PalmPilot, it still seems to be too heavily positioned as a personal device that, while connected to the desktop, is not part of the network. To me, 3Com has to change that position and has the tool to do so in its channel base.
Another area where 3Com has a very strong position is in the small and midsize accounts serviced by the vendor's channel.
Cisco now targets this market and is attempting to design channel programs and product sets to meet the needs of this arena.
Fortunately for 3Com, Cisco shows no signs of having a clear channel strategy in this market.
In the small-business market, Cisco is close to launching a plan to bundle vertical-market solutions and recruit resellers to sell those offerings. Several conversations I had with Cisco executives recently left me shaking my head, however, at the plan.
Resellers, in my opinion, sell into vertical markets they know a great deal about. It's all about selling solutions, and in order to do that, you have to understand your customers and the different problems they face. However, Cisco is not taking that into consideration. Why?
Because just like many other large manufacturers that historically have sold to large accounts, Cisco looks for large volumes from the outset.
But the Cisco plan is a subject for a future column. My point here is that 3Com is the leader in the small and midsize area and very likely will remain so.
The Bay Networks-Nortel deal makes you ask whether we are headed toward a period of consolidation among data-network suppliers and voice-network suppliers. I believe we are, and 3Com over time has to make a play to take a very big stand in incorporating voice into its future. Convergence is real, and the data-network suppliers like 3Com are best positioned to take advantage of it.
The question is: When does 3Com do so?
ROBERT FALETRA can be reached via telephone at (516) 733-8612; Internet: rfaletra@cmp.com or MCI: 585-5795.
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Computer Reseller News
June 22, 1998
Issue 795 |
