3Com And Siemens Spearhead the Converged Voice-Data Enterprise Networking Market With Joint Venture
December 10, 1998
SANTA CLARA, Calif. and MUNICH, Germany--(BUSINESS
WIRE)Dec. 9, 1998--
Ethernet and Telecom Market Leaders Join Forces to
Deliver
Industry's Richest Set of LAN Telephony Products;
Target $4-plus Billion Market by Year 2002
Ethernet data networking market leader 3Com Corporation
(NASDAQ:COMS) and telecommunications market leader
Siemens AG today announced their plans to form a joint
venture to develop a rich set of LAN telephony and
multimedia products that will change the way businesses
build and operate their data and voice communications
networks. Through the new joint venture, the two
companies expect to deliver products in 1999 that will
enable businesses to run voice, video and data calls over
their local area networks (LANs) -- lowering their overall
telecommunications costs and paving the way for new
converged multimedia business applications. The companies
are already working on joint development projects and
intend to commence operation of the joint venture upon
completion of definitive agreements early next year.
The joint venture, a significant step forward in the
companies' 18-month strategic alliance, will accelerate and
deepen their joint product development, broadening the
range of solutions and markets they will address. To fund
the joint venture, the two companies expect to share an
equal initial investment valued at more than $100 million.
This will enable both companies to establish themselves as
early leaders in the emerging market for LAN telephony and
related gateway products, which, according to analyst
group Killen & Associates, will increase to over $4.1 billion
by year 2002.
The joint venture will leverage the parent companies'
unprecedented data networking and telephony market
strength and expertise required for success in this
emerging market:
-- Siemens -- a leader in the worldwide telecommunications market;
-- 3Com -- the leader in the worldwide Ethernet data networking
market;
-- Siemens' call processing for rich telecommunications
functionality and interworking software for compatibility with
enterprises' existing telecommunications environments;
-- 3Com's technology leadership in fully-switched, end-to-end data
networking solutions, enterprise high availability networking
solutions, and comprehensive support of industry standards for
class of service (CoS), quality of service (QoS) and policy and
network management.
-- Siemens' worldwide telecommunications sales and service channels
and 3Com's worldwide data networking and service channels in 160
countries.
Expected products include a range of multimedia
exchanges(1) for voice and data, LAN telephony gateways
and Ethernet phones and adapters packaged and priced to
meet the needs of small, medium and very large
corporations. Initial applications for these products include
voice-enhanced PC collaboration and conferencing, call
centers for Internet-based retailers, and customer service
help desks for a variety of industries, such as financial
services, consumer product manufacturing, healthcare,
government and education.
(1) For product definition, see related press release issued
today, " Siemens and 3Com Outline Product Plans for
Jointly Developed Converged Enterprise Networking
Solutions."
The products will enable business users to make and
receive telephone calls from their PCs or Ethernet phones
from wherever they connect to a corporate network, share
rich voice/video/data applications across the network in
real time, and instantly retrieve data and multimedia files
related to an incoming caller.
Convergence of voice and data over a single network is
expected to offer businesses significant long-term savings
over today's separate voice and data networks. Converged
networks offer the cost efficiencies of one line for voice
and data transmission as well as common equipment,
management software and service/maintenance
organizations.
Combining Forces for the Converged Networking Market
Siemens and 3Com will co-own the joint venture, which will
have its headquarters in the United States, have its own
staff and management, and development teams in
California, Massachusetts, Germany, Israel and the United
Kingdom. The joint venture management will report to a
board of directors equally comprised of Siemens and 3Com
executives. The initial staff will include more than 200
engineers from the parent companies, many of whom are
already experienced in developing converged network
products.
Products developed by the joint venture will be branded as
the Siemens HiNet(TM) product line and the 3Com
SuperStack(R) II and CoreBuilder(TM) product lines. The
products will be sold by Siemens, 3Com and both
parties'respective distribution partners. Both companies
view their sales channels as complementary, with Siemens
strength in direct sales, service and system integration,
and 3Com's strength in indirect sales backed up with a
growing portfolio of network design, implementation and
post-sales customer services.
"The joint venture brings together the best-of-breed
talent, experience, core technologies and distribution
channels to create the industry's richest set of
convergence products and deliver them worldwide ahead of
our competitors," said Eric Benhamou, CEO and chairman of
3Com. " Converged networking is the most exciting and
fundamental change in networking since the Internet itself.
We will fully support customers so they can safely take the
first steps into this new era and reap its competitive and
cost-savings benefits. As of today, our long-standing
partnership with Siemens and, consequently, our own
competitive posture, has taken a significant step forward."
"Siemens will provide enterprise network customers with
converged voice/data network solutions combining
advanced LAN technology from the Ethernet market leader
3Com with benefits customers know and value from their
PBX: feature-rich real-time communications and telco-class
reliability," said Roland Koch, member of the board of
Siemens AG and president of Siemens Information and
Communication Networks Group.
"The leading-edge products expected from our joint
venture with 3Com will significantly enhance the product
portfolio utilized by Siemens sales and service organizations
to provide customers with communication solutions
combining best-in-class components from all leading
vendors. Siemens contributions to the joint venture will
protect our customers' investments by ensuring
interoperability between the emerging multimedia networks
and their PBX infrastructure," added Werner Schmuecking,
member of the board of Siemens Information and
Communication Networks Group.
See related press release issued today, "Siemens and 3Com
Outline Product Plans for Jointly Developed Converged
Enterprise Networking Solutions."
About Siemens' Information and Communication Networks
Group
The Information and Communication Networks Group of
Siemens with approximately 63,000 employees and a
business volume of $14 billion (DM 23 billion), is one of the
worldwide leading providers of end-to-end solutions for
voice, data and mobile communication networks. The Group
covers products/systems, solutions and service/support for
the installation and maintenance of complete corporate and
carrier networks. This includes services and consulting
covering aspects from network planning and financial
advice through to commissioning and user training.
Siemens' Hicom is the worldwide leading private
communications server and installed in approximately 120
countries. With more than 175 million line units in over 100
countries, Siemens' EWSD is the most successful digital
switching system worldwide. For further information, visit
Siemens' World Wide Web site atwww.siemens.com.
About 3Com Corporation
With more than 200 million customers worldwide, 3Com
Corporation connects more people to information in more
ways than any other networking company. 3Com delivers
innovative information access products and network
system solutions to large, medium and small enterprises;
carriers and network service providers; PC OEMs; and
consumers. 3Com -- More connected(TM). For further
information, visit 3Com's World Wide Web site at
www.3com.com or the press site at
www.3com.com/pressbox.
Legal Notice
The plans and terms for the joint venture expressed in this
press release are currently being negotiated by 3Com
Corporation and Siemens AG and are subject to change in
the definitive agreements for the joint venture. Safe Harbor
Act Statement Under the Private Securities Litigation
Reform Act of 1995: Certain of the comments and
information in this news release are forward looking and
involve risk and uncertainties that could significantly
impact the results, including but not limited to, dependence
on new technology and intellectual property, successful
consummation of transactions in negotiation, dependence
on the global communications, networking, consumer
electronics and data storage industries, competition and
pricing pressures; and other risks detailed from time to time
in the Company's periodic reports filed with the Securities
and Exchange Commissions. Formation of the joint venture
is subject to all necessary corporate and governmental
approvals.
Siemens is a registered trademark and HiNet is a trademark
of Siemens AG.
3Com and SuperStack are registered trademarks and
CoreBuilder and More connected are trademarks of 3Com
Corporation. All other company and product names may be
trademarks of their respective companies with which they
are associated.
[Copyright 1998, Business Wire] |
