3Com exits enterprise network stage

By Jim Duffy
Network World Fusion, 03/20/00

In an effort to focus on new high-growth markets, 3Com is leaving the large enterprise LAN/WAN and analog modem businesses.

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The retreat will affect 2,500 to 3,000 employees over the next two quarters, 3Com President Bruce Claflin said. Two-thirds of the employees will move to companies 3Com has partnerships with; the other third will exit 3Com via "separations."

"We are exiting three businesses that were not delivering growth and financial returns," Claflin said.

3Com is discontinuing its CoreBuilder Layer 2/3 Gigabit Ethernet and ATM LAN switches, and its PathBuilder and NetBuilder WAN switches and routers. Last customer shipments for these products is June 30.

3Com is also selling its analog desktop and PC Card modem business to a new company it is forming with Accton and NatSteel Electronics. This new company will research, design, market and sell Internet access products, including U.S. Robotics-branded analog modems.

For CoreBuilder customers, 3Com is expanding an existing relationship with Extreme Networks to migrate those customers to Extreme's platforms. PathBuilder and NetBuilder customers are being transitioned to Motorola.

Customers of all dropped products lines will continue to receive service and support for a period of up to five years, 3Com said.

3Com is the latest company to throw in the towel on the large enterprise gear market. Lucent in February spun off its enterprise businesses to eliminate a distraction as it targets the service provider arena. Cabletron recently split into four companies to better focus on high-growth markets. While Cabletron maintains that it is still an enterprise player, analysts and other observers view the company's move as an exit strategy because Cabletron plans to completely spin off those companies by taking them public in a year.

That appears to leave Cisco as the de facto standard in large enterprise data networks. But with voice/data convergence looming as the next growth phase for these environments, Cisco will be pitting its strength in data against Lucent and Nortel's long legacy in voice networks and vast installed base of PBX customers.

3Com, meanwhile, will set its sights on the consumer, small/medium enterprise and network service provider markets with its HomeConnect, OfficeConnect, SuperStack, NBX and Total Control product lines. 3Com is stressing its brand name, channel structure and ease-of-use attributes as it focuses on these markets, and will commit technology resources to broadband access, wireless, LAN telephony, multiservice and home networking.

In so doing, 3Com announced two products today that stress ease-of-use for small/medium businesses. They are the Switch 4000 line of pre-configured backbone switches and the SuperStack II Switch 9100, a copper-based Gigabit Ethernet switch.