Autopsy found: 3Com's not dying anytime soon!
upside.com
Breakfast of Also-rans
February 08, 1999
What's so bad about being merely good?
Last week analysts and industry-watchers had a feast on 3Com. Those Tech Data reseller numbers are down, old pal. We can deductively reason that your sales are floundering. You never could beat Cisco anyway and, well, we had this casket prepared a few years back and we're getting pretty itchy to use it.
You shouldn't have.
High tech has been begging for 3Com's death. 3Com didn't appreciate the glory days of Bob Metcalfe. It couldn't touch Cisco's remarkable success. And with the U.S. Robotics acquisition, its inevitable demise is upon us.
We look good in black.
Why does 3Com have to kick Cisco's butt every day? I don't get it. Some say America doesn't allow heroes. It crumbles away their reputations stone by stone, until only the pitiful human desires remain. We like larger than life.
And so we have Phi Slamma Jamma Final Four dreams. We cheer for the long bombs in football, praying for endless offense, whistle to whistle. We don't really mind Mark McGwire's flexing. We get the chills over a 4'10" nymph's double back flip on the floor routine.
Hey, could you cut out the tear-jerker on her mom's life traveling from one trailer to another and cut to a few more release moves on the uneven parallel bars?
We like our Wheaties cut-and-dried.
Outrageously enough, somewhere behind the firestorm of glory and triumph of the big winners, there is a more subtle success being had. The Midwestern kids who work hard for a thoughtful career of unflagging work. The walk-ons. The people toiling away out of the frame of the record book's glossy color photos.
The 3Coms.
As a company, 3Com has managed to avoid death by immobility. It owned Ethernet, and soon that became a commodity, something preinstalled on your PC. Most of 3Com's products are following the same path.
Modems are now built into computers, no chance for brand-building there. Palm Pilots--acquired though the USR buy--are quickly devolving into the realm of hair accessories. Color LCD screens are the hot advance, a leather carrying case maybe, or even a flip-top screen. Software advances?
Going down.
But Eric Benhamou is one of the smartest guys around. Sure, he didn't take the super-nitro-burning high end like Cisco, which is currently enjoying the pleasure of selling monster equipment to telcos. While Cisco showed the freakish natural ability of a No. 1, turning routers from software to hardware, finding a home for supergalactic ATM technology and now leaping into the voice-over-IP market, 3Com is a respectable No. 2.
But 3Com's had its days as a hot stock. Yeah, its margins have never been fat, and they are consistently dropping weight in 3Com's newer products. But it's been an adept competitor in thin-margin markets. It's not dying anytime soon.
Why are we so freakishly obsessed with the Himalaya-mimicking charts of Internet stocks? (Don't believe we will vilify them all when the sheer downhill cliffs of their charts fall in place.) Why does every company have to experience nonstop whiplash-spurring growth? Why can't 3Com just be good?
Oh right, the whole engine of economic progress would suddenly fuse into a burning metal mass of scrap.
Tish Williams is senior writer/editor at UPSIDE.
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