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To: joe who wrote (16735)7/21/1998 12:58:00 PM
From: Moonray  Respond to of 22053
 
More: 3Com's New President Set to Make 'Big' Work:
Bloomberg Profile - Bloomberg News, July 17, 1998, 11:45 a.m. PT

3Com's New President Set to Make 'Big' Work: Bloomberg Profile

Santa Clara, California, July 17 (Bloomberg) -- When word
got around last March that Bruce Claflin wanted to leave Digital
Equipment Corp., the computer-industry veteran was inundated with
calls from prospective employers. There was one problem.

''They were all start-ups,'' said Claflin, 46.

After 22 years at International Business Machines Corp., the
world's largest computer maker, and almost three years at Digital
heading its personal computer unit and sales and marketing,
Claflin was used to companies that were up and running.

When 3Com Corp., the world's No. 2 maker of computer
networking equipment and the PalmPilot, called about taking over
its daily operations, Claflin jumped. He knew full well that 3Com
was struggling to swallow a big acquisition and trying to boost
its sagging stock price.

''I know how to make 'big' work,'' he said.

On Wednesday, Claflin was named 3Com's new president and
chief operating officer. He will head its four business units and
marketing, sales and human resources. His first task: Sorting out
bloated inventories and pushing sales.

'Big' at 3Com means a $10.9 billion market capitalization,
more than 12,000 employees and 1998 sales of $5.4 billion -- 3.6
percent lower than last year. The company's stock fell from a 52-
week high of 58 3/8 on July 16, 1997 to a 52-week low of 24 on
June 1. It recently traded at about 30.

Claflin will report to Eric Benhamou, 42, the company's
chairman and chief executive, who wants to be free for strategic
planning. Three other 3Com executives, who overseeing finance,
planning, technology and the PalmPilot, will continue reporting
to Benhamou. Claflin won't have a seat on the company's board.

''I'm the No. 2 man, but I'm not the heir apparent,''
Claflin said.

Not A Cakewalk

He's the make-it-work guy, and his job won't be a cakewalk.

3Com faces stiff competition from larger Cisco Systems Inc.,
based in San Jose, California. Claflin's new company is also
struggling to return to the profitability it enjoyed before its
June 1997 acquisition of US Robotics Corp., then the No. 1 maker
of modems linking computers to the Internet.

The $8.54 billion purchase increased 3Com's revenues by 78
percent, but it also doubled the number of employees and
products. Sales slowed, especially sales for US Robotics
products. 3Com's pro-forma profit, including financial results
for the newly acquired company, plunged more than 90 percent the
last two quarters.

''It was a big acquisition they're still trying to digest,''
said Eric Efron, portfolio manager of the USAA Aggressive Growth
Fund, which owns 378,000 3Com shares.

A 'Change Agent'

It's not the first time Claflin has been brought in to firm
up the shaky part of a large technology company. In 1995, he left
IBM, where he led the introduction of its successful Thinkpad
line of portable computers, to take over Digital's PC unit.

His assignment: make Digital one of the top five U.S.
personal computer makers. Claflin eventually assumed all
Digital's sales and marketing, but he never achieved the PC goal.

While Claflin made some improvements, the PC unit was ''a
disaster,'' said Kim Brown, an analyst with Gartner Group Inc.'s
Dataquest market research unit.

''When he got there, (the PC unit) was incredibly
unprofitable and when he left, it was posting some profitable
quarters.'' he said.

The same can't be said of marketing. ''He never got that
turned around,'' he added.

Digital, based in Maynard, Massachusetts, was bought by
Compaq Computer Corp. of Houston in June, and Claflin decided to
take a $1.7 million severance package.

The biggest problem with Digital's PC business, Claflin
said, was swollen inventory. It plagues 3Com as well. Soon after
its acquisition of US Robotics, 3Com management discovered that
the inventory of computer modems held by distributors was much
higher than previously thought.

Inventory Bloat

Claflin didn't want to talk specifically about the
acquisition or inventories in an interview just after the
announcement of his hiring, but managing 3Com's supply chain and
''lowering and turning inventories'' will be among the first
tasks he tackles when he joins the company Aug. 10, he said.

''Bruce has been a change agent before,'' Benhamou said,
''And that's what we expect of him here.''

Claflin graduated from Pennsylvania State University with a
political science degree and began his career at IBM as a sales
manager. He rose through the ranks and in 1992 became head of its
laptop business.

His strategy for knowing what customers wanted, wherever he
worked, was travel and more travel, he said. The belief took him
to locations as diverse as Tokyo and Omaha, Nebraska, to see what
people thought.

''A desk is a dangerous place from which to view the
world,'' Claflin said, quoting a line from a favorite John le
Carre novel.

Claflin, who will work from 3Com's headquarters in Santa
Clara, California, will travel a lot in the next year, not always
on business. He'll commute between Silicon Valley and the Boston
area for at least a year while his daughter finishes high school.

The work will be worth the trip.

''The job came out of the blue,'' Claflin said. ''But I'm
ready to run this organization.''

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To: joe who wrote (16735)7/21/1998 1:28:00 PM
From: Moonray  Read Replies (1) | Respond to of 22053
 
GLOBAL DEMAND FOR INFRASTRUCTURE, CONNECTIVITY, AND
WEB-Based Commerce Spurs Opportunities for IT Vendors, IDC Study Finds

Report Examines Where Opportunities Lie for IT Vendors of Internet
Products and Services

FRAMINGHAM, Mass., July 21 /PRNewswire/ -- Internet deployment
varies greatly across countries, industries, and size classes. Despite these
different paces, market players continue to grow in number and the
competition becomes fiercer as each day passes.

According to a new report published by International Data Corporation,
this landscape provides a wealth of opportunities for IT and
communications vendors across the globe. Burgeoning Internet
activities in Asia/Pacific, particularly within the People's Republic
of China, dictate the need for stronger infrastructure. In Western
Europe, especially in France, the demand for increased connectivity is
urgent. In Japan, Australia, Scandinavia, and the United States, users
are clamoring for more proficient Web-based commerce.

These opportunities pose unique challenges for IT suppliers around the
world. IDC's new report, Varied Internet Deployment Spells a Variety
of Vendor Opportunities, provides insight into these challenges by
examining the pace at which regions are accessing the Internet and the
World Wide Web, and how quickly they are proceeding in their
implementation of home pages. This report looks at who is hosting
these pages and which internal division is responsible for content.
In addition, the research reveals which activities are being conducted
on their home pages (i.e., customer service and support, product
information, sales transactions).

This study addresses these questions through an analysis of Internet-
specific data collected in the 1998 Global IT Survey, a survey
consisting of 15,000 interviews across 13 countries worldwide. The
countries surveyed include the United States, France, Germany, Italy,
Netherlands, Scandinavia (including Sweden and Denmark), the United
Kingdom, Australia, PRC, India, Japan, Korea, and Malaysia.

"While Internet adoption continues to snowball worldwide, differences
in the magnitude of adoption level among countries present wide and
varying opportunities for IT vendors," said Nicole Comiskey, research
analyst, Global Research Services. "By closely examining what IS
managers say about the present and predict about the future, vendors
can gain the necessary understanding to capture these markets."

For example, of those countries surveyed, those in Asia/Pacific now
lead the world in Internet connectivity, with nearly 63 percent of
sites claiming access to the Internet/World Wide Web. This lead is due
in large part to Australia, which ranked at the top in terms of access,
and Korea, which placed third. In last year's Global IT Survey, Korea
showed high current and anticipated Web access plans. This finding
seems to support Korea's previous claims in the 1997 survey to
implement plans that would increase access.

A closer look at home page usage shows nearly 28 percent of those
surveyed have developed a home page at their companies. In
Scandinavia, which is recognized as a region of early adopters, more
than 62 percent of companies have a home page. This is due in large
part to the unparalleled high number of small and medium sites that
host a home page. The United States experiences a strong home page
presence, but within the larger sites. Results obtained through the
survey point to an increase in home page usage that tends to rise with
the size of the site. Home page penetration also fluctuates across the
different vertical industries surveyed, with higher penetration in
education, banking, process manufacturing, insurance, other finance,
and government.

"Ultimately, the vendors that understand the individual market dynamics
and can tailor their strategies accordingly, will reap the success
available from these opportunities," said Comiskey.

Varied Internet Deployment Spells a Variety of Vendor Opportunities
(IDC #B16248) can be purchased by contacting Cheryl Toffel at
800-343-4952 or by e- mail at ctoffel@idc.com. For additional
information about IDC's Internet Research, please contact Elizabeth
Freedman at 508-935-4764. To receive details on the Global IT Survey
and related special information services, please contact Lisa Bloom at
508-935-4236.

About IDC
Headquartered in Framingham, Mass., International Data Corporation
provides IT market research and consulting to more than 3,900
high-technology customers around the world. With a global network of
300 analysts in more than 40 countries, IDC is the industry's most
comprehensive resource on worldwide IT markets, products, vendors, and
geographies.

IDC/LINK, an IDC subsidiary, researches and analyzes the home computing
market, leading-edge technologies in telecommunications and new media,
and the convergence of computing and consumer electronics.

IDC's World Wide Web site idc.com ) contains additional
company information and recent news releases, and offers full-text
searching of recent research.

IDC is a division of International Data Group, the world's leading IT
media, research and exposition company.

All product and company names may be trademarks or registered
trademarks of their respective holders.
SOURCE International Data Corporation

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To: joe who wrote (16735)7/22/1998 11:19:00 AM
From: Moonray  Read Replies (2) | Respond to of 22053
 
More: 3Com - Next?

They usually proceed to make a series of embarrassing errors that
nearly take the company down the toilet.

Is this to be the story of 3Com?

That 's the concern behind the news that 3Com's founder and CEO, Eric
Benhamou, is stepping back and letting a former Digital Equipment
executive run the company he founded.

andovernews.com

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