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Technology Stocks : 3Com Corporation (COMS) -- Ignore unavailable to you. Want to Upgrade?

To: Stockman_77079 who wrote (15450)	5/6/1998 10:01:00 AM
From: Finder	Read Replies (2) \| Respond to of 45548

This stock seems perpetually stcuk at 35 +/-1. This has really been a lousy investment for those of us who have hung on, the rest of the market has soared and this dog has just done nothing.

To: Stockman_77079 who wrote (15450)	5/6/1998 10:29:00 PM
From: joe	Read Replies (2) \| Respond to of 45548

Stockman_77079, About your post on first tier-ed network ... Sorry about my quick response. I was tired and I didn't really understand your question, or if there was a question. I think the miscommunication is my "classification of a 1st and 2nd tier network company" - I didn't try to define it or state what it is. I meant to say it in a very general term; that there are roughly 3-6 major players, and the rest are sort of minor players in the Network sector. I also wasn't trying to group them, or name them in my post.... About 3Com not concentrating on Fortune 500, that's basically true, and that's the plan in a sense. First, I'm not saying that none of 3Com products are in Fortune 500 companies since F-500's use all kinds of products. Also, we saw a few days ago that a very important European Bank in Spain (Banco Santander I think) is putting in place a 3Com gigabit ethernet system. But COMS is not trying to make the F-500 space their main focus. The main point is that COMS is going after the SME (small and medium enterprises) space. CISCO competes on the Fortune 500 space. The very first thing I ever learned about COMS was that they are not in direct competition with CISCO's products (otherwise I would sell my COMS immediately!!). CISCO's much more high end stuff. But this is fine, because I think there is a tremendous market in the SME space, maybe (probably IMO) more than in the FORTUNE 500 space. (Plus I also own CSCO but wanted more diversification). CISCO's products don't overlap much with COMS's products, and their goals are different - so CISCO'S network superiority in relation to COMS is meaningless. Another reason I bought COMS is because I know they are working on the higher end market, but they'll get there by making products cheaper. CISCO'S products are tremendously expensive and will eventually be price shredded. But CISCO's plan anyway, is to go to even higher end stuff, and the carrier business eventually. So, COMS's real future is being like a CISCO, but selling to the thousand's of companies outside the FORTUNE 500 space (and after prices come down, I'm sure the F-500 companies will seriously think about buying COMS's products). One of the things that makes CSCO so good, is it has end-to-end service. These F-500 companies need massive hand-holding with the incredibly complex network products. There aren't enough network engineers to maintain these things. So F-500s are addicted to CSCO ALL BECAUSE IT'S THE ONLY ONE WHO HAS END-TO-END SIMPLICITY. John Chambers is a smart dude because he learned this at IBM. He has the connections with the F-500 and he knows what they want, and he's sold them lots of complicated mainframe equipment where the F-500 where addicted to IBM handholding.... John Chambers is just extending the IBM way to the Network industry. Anyway, COMS is the only other company that I know of who has planned to offer an end-to-end solution. (Another main reason I own COMS). This is very hard to do and a company needs at the very least, large market cap size. If all the F-500 companies need hand-holding, then just think how lost the small and medium size business's are going to be, installing a 100-200+ node network. All this great technology, and nobody knows how to use it. Well, COMS has been thinking through this plan, and one of the great things it has is a GREAT relationship with its VARs and DISTRIBUTERS. These guys will provide the hand-holding for SME's, plus COMS tries to make products as user friendly as possible...so you don't have to be a network engineer to maintain your netork. What's interesting, is that CISCO sees this happening, and they are trying to move into COMS lower end-product space, and trying to block COMS at it's game plan. But, to me, it's not too good a strategy for them, because that would make CISCO a lower margin player. CISCO's not made to be that way - that's why the carrier market should/will be their focus. COMS on the other hand is made to be very profitable with 20% margins. (Which will probably go up anyways, once their higher end stuff starts selling). To say that COMS is a bad company because it doesn't try to grab all the Fortune-500 market share, is to say that one doesn't know COMS. So, that's the COMS strategy as far as I understand it. Anybody who wants to clarify/add please do. I know that the above is just a rough sketch. Anyway, the real question that I think we should be asking ourselves is: CAN COMS EXECUTE IT'S GAMEPLAN? Any ideas anybody? joe