3Com Preps Enterprise Wares, Eyes Acquisitions
During a conference call last month to discuss the Marlborough, Mass.-based company's quarterly financial results, President and CEO Bruce Claflin said 3Com will soon release a Linux-based version of its VCX softswitch that channel partners can sell to midsize to large customers.
"With the release of this, we expect to open the aperture of sales, leveraging the channel base," Claflin said.
The new products are part of 3Com's continuing push to expand its enterprise networking business.
3Com has been toiling to develop a channel strategy around the VCX line since its launch in April 2003. It faced a stumbling block, however, because the softswitch originally was based on Sun Microsystems' Solaris operating system, a competency not widely held among 3Com's partner base. 3Com executives last year said the company was working to move VCX to a Unix or Linux platform.
Claflin also said 3Com plans to grow the switch line it sources through its joint venture with Chinese networking vendor Huawei Technologies, with new product introductions slated for this quarter and next.
3Com plans to follow last month's expansion of its enterprise router lineup with eight new models that fill out both the high and low ends of its portfolio.
As part of the launch, 3Com introduced the new Router 6000 family, which offers higher density, capacity and resiliency than 3Com's current Router 5000 and Router 3000 lines.
Available in four-slot and eight-slot models, 3Com's Router 6000 family offers two 10/100 Ethernet ports, 300-Kbps throughput, 512 Mbytes of memory and hot-swappable power supplies. 3Com's routers also come standard with security features such as VPN, encryption and firewall.
3Com also added six new enterprise broadband routers to its Router 3000 family. The DSL routers include a four-port 10/100 switch and enhanced security features.
"The products look like they'll have a feature set that will satisfy 90 [percent] to 95 percent of customer requirements, and at a significant cost-savings [vs. competitors]," said Steve Marks, president of Starnet Data Design, a solution provider in Westlake Village, Calif.
Available now, 3Com's Router 6000 family starts at $5,990, while Router 3000 DSL routers start at $595. During the call, Claflin also said 3Com is now in a good position to consider acquisitions.
"Going forward we think that our business is largely in balance from a cost and expense standpoint--we think the market conditions are better, our balance sheet is extremely strong--and therefore we are more aggressively considering the possibility of acquisitions," Claflin said, noting that 3Com is potentially interested in acquiring technology complementary to its current offerings, such as Layer 4-7 switching and security.
As 3Com beefs up its enterprise offerings, it also is taking steps to strengthen its base of enterprise-focused channel partners. For example, the company is decreasing volume rebates that some partners in the past used to drop prices and is replacing them with higher levels of MDFs to help partners build their competency in 3Com products, Claflin said.
3Com also introduced new volume requirements that halved the ranks of U.S. solution providers in the program's top two tiers down to 70 Gold and 100 Silver partners--a move that raised the ire of some of its solution provider partners (see CRN, Sept. 27).
For its first quarter of fiscal 2005, ended Aug. 27, 3Com reported a loss of $36 million, or 9 cents per share, compared with a loss of $106 million, or 29 cents per share, in the same quarter a year ago.
Revenue for the quarter was $162.3 million, essentially flat when compared with revenue of $161.9 million in the same quarter last year.