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

To: Steve Porter who wrote (22506)	10/5/1998 8:15:00 PM
From: joe	Read Replies (2) \| Respond to of 45548

Steve, >>The problem is that CSCO's customers want to save money and if they can do it by buying equipment from other manufacturers they will do it.<< I'm sure some of the Fortune 500 companies want to save $$, but what's most important to many of them is that they have reliability and the end-to-end hand holding service of an expert. They want to know who to blame when things go wrong. I'm wondering if COMS is set up to do this for the "big companies". It seems to me that COMS will make products simple, inexpensive, easy to upgrade, easy to maintain, but the customer service will still come from the resellers and the systems integration consultants. These resellers will prefer to push COMS products because they're cheaper, easier to upgrade, etc. BUT, are Fortune 500 companies ready to deal with resellers? How is COMS going to enter their area? They want a "CSCO company" hand-holding they're every move. I think COMS' strategy is to say, we don't need the F-500 sector that much. The SME sector is much bigger and they can sell much more volume. I think this is the "truly profitable" market is to be found. >>It won't take much to switch them to COMS.<< If COMS has some way to make it really easy to switch and become the company's new supplier, then I can see companies making the switch. Just remember, there are a lot of big companies that will pay extra for "hand-holding", service, no problems, no mess, proven mission-critical hardware, regardless of price. >>INTC is the only other company to "Get it" and they (as I said) would NEVER be allowed to buy COMS due to government interference.<< INTC will not be able to compete with COMS in the network area. They just won't have the expertise and quality of products. COMS by far has the best distribution channels for network products. Anybody can make network products, but not many can make them better than COMS. INTC needs to stick to it's core business -- chips. That's why I'm not too worried by INTC or CPQ for that matter. joe