3Com Drops Dell As Authorized Reseller

Speaking on the networking hardware vendor's quarterly earnings call Thursday, Claflin said he hasn't seen Dell's entry into the switch market affect 3Com's business, but he made the decision to drop the direct marketer as a reseller.

"I can't find any numbers on how successful they have been," Claflin said of Dell. "They must be selling something to somebody, but they are not going to be selling 3Com product."

In an interview with CRN, 3Com vice president of sales Dave Smith said 3Com informed Dell Wednesday that it was dropping the PC vendor as a reseller effective immediately. Dell can still source 3Com product through distribution if it chooses to do so, Smith said.

Dell was part of 3Com's direct mail reseller program, along with companies such as Insight and CDW. 3Com's DMR program provides marketing funds and rebates to resellers, Smith said, something 3Com isn't comfortable providing to a competitor.

"Dell was selling 3Com product when a Dell solution didn't fit, but they were leading with Dell switches," he said.

3Com also is launching incentive programs for its other direct mail resellers to compete against Dell, Smith added.

Meanwhile, 3Com reported revenue of $305 million for its first fiscal 2003 quarter, ended Aug. 30, down 10 percent from the prior quarter.

The net loss for the quarter was $32 million, or 9 cents per share, including restructuring charges of $23 million, or 6 cents per share, compared with a net loss of $223 million, or 65 cents per share, in the year-ago quarter.

As the company announced in July, 3Com is no longer reporting pro forma results.

3Com CFO Mark Slaven said the company expects revenue to decline by 5 percent to 8 percent sequentially this quarter, driven largely by declines in the connectivity segment. Enterprise networking sales are expected to increase modestly, he said.