Settled 3Com open for serious action

Few CEOs have had to endure a roller-coaster ride as Bruce Claflin has faced in his time at 3Com. The company, once a dot-com darling, has endured some painful restructuring and a succession of losses, but now it claims to be back on track.

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By  Peter Branton Published  February 20, 2005

|~||~||~|Few CEOs have had to endure a roller-coaster ride as Bruce Claflin has faced in his time at 3Com. The company, once a dot-com darling, has endured some painful restructuring and a succession of losses, but now it claims to be back on track. Having exited the high-end corporate networking market in 2000, 3Com returned in 2003 through a joint venture with Chinese IT supplier Huawei Technologies. The joint venture has allowed 3Com to focus on making networking equipment that it claims is technologically better and cheaper than that made by rivals, such as Cisco. The flagship product in its line-up is the 8800 family of switches, which have been built on open standards, as opposed to Cisco’s proprietary approach, 3Com claims. The company has also just made a serious investment in its security line-up with the US$340 million acquisition of intrusion prevention systems (IPS) supplier TippingPoint. IT Weekly spoke to Claflin about these points and other issues. 3Com has been committed to its strategy of being a leading provider of secure converged network solutions for small, medium and large enterprises for two years now. How much progress has been made there and what still needs to be done? We have made tremendous progress. Leveraging our joint venture, Huawei-3Com, we are bringing quality products to the market, including four new lines in the past year — two of which were specifically designed for 3Com. And through our partnership with Siemens Business Services, we’re providing services around those products that enterprises require. And, with the acquisition of TippingPoint, we’ve broadened our portfolio even further, with its advanced security products that play perfectly into our strategy. We are confident that we have both the depth and the breadth in our product portfolio that allows us to compete with any vendor. How successful has the joint venture with Huawei Technologies been and what is going to be the next step? We are pleased with our progress to date. We’ve leveraged the relationship to bring new products to markets more quickly and in a cost-effective way. And because the joint venture enables us to develop products in a more cost-effective way, we are in a position to create value for our customers and channel partners. We continue to work [as Huawei-3Com] to develop new products, as well as add features and enhancements to our current products. On its own, Huawei-3Com is doing very well in the strategic regions it serves — China, Hong Kong and Japan. The joint venture continues to gain a market share from its competitors and grow at a rapid pace, doubling its resources since its formation. What has been the market acceptance of the 8800 modular switching family that you launched with Huawei? And how important is it in your battle with Cisco? We’re seeing a tremendous amount of early traction. Customers are craving a high-performance switching fabric that is built on open-standards that can out-perform Cisco, at an attractive price point. Put all that together and we are confident that we have a winner. While you say you are going up against Cisco, who else do you see as your major competitors going forward in this market? We face a number of point-solution competitors in different situations. With our expanding portfolio, and the addition of TippingPoint, there are very few vendors that match us. 3Com has touted the benefits of open standards in the 8800. How important is this commitment as far as the company goes? It’s extremely important. Ease of integration is paramount for organisations today. There are countless systems and legacy equipment that must live on due to budget constraints. It’s imperative that our products work with existing systems to create immediate and incremental value without requiring a “forklift” upgrade or a replacement of existing network equipment. Having made such a high-profile exit from the enterprise market in 2000, how easy has it been to win back those customers’ trust? The proof is in our actions, including the substantial investments that we have made over the last two years. We are expanding our portfolio with products that are designed for the enterprise core, as well as those that drive higher bandwidth to the edge, to the desktop and to remote offices. TippingPoint is another great example. It’s products are designed and proven to work in the largest enterprises, including the Fortune 10. Customers are taking notice of these actions and our concurrent substantial investments — TippingPoint was a US$400 million cash investment. And, again, we’re backing our products up with an investment in our service capabilities. We’re delivering capabilities that enterprises expect — 24/7, including multi-language phone support and two and four hour on-site support response. We’re also investing in sales and technical resources in the field and in marketing to help enterprises understand our position and our value. What benefits will the partnership with Siemens Business Services bring? Will this have any impact in the Middle East? Our relationship with Siemens is global. Our customers around the world, including those in the Middle East, will experience benefits through faster, more comprehensive service capabilities. Why did 3Com acquire TippingPoint and what benefits will it bring? TippingPoint plays a key role in our strategy to provide secure converged network solutions. TippingPoint’s industry-leading intrusion prevention system significantly enhances our converged solutions. It brings highly scalable best-in-class security to our voice and data products, so it’s a natural fit for us. Some industry watchdogs have suggested that Huawei could buy 3Com in the future, what are your thoughts on that? Unfortunately, I cannot comment on industry speculation. Given that the technology market in the US and Europe is still very tough, how important is a region such as the Middle East to 3Com’s long-term plans? We view the Middle East as an important region. We have deep relationships throughout and we look forward to expanding those. One customer example is the Aspire Academy of Sports Excellence in Qatar. Aspire uses 3Com for wired and wireless Internet access across the campus, enabling the use of cutting-edge performance analysis software throughout the academy. Additionally, Aspire’s CIO is a member of our global customer advisory council. ||**||

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