3Com has sent shock waves through the industry with its announcement that it will exit the enterprise networking market. The California-based company’s decision to discontinue the CoreBuilder enterprise LAN switch, and the NetBuilder and PathBuilder routers has not doubt left customers feeling ill-at-ease.
3Com Australia/New Zealand general manager Archie Wilson explains to Computerworld journalist Andrea Malcolm how local customers will be affected.
You’ve said you’re getting out of the enterprise LAN market and will cease producing the CoreBuilder LAN switch from June 30. CoreBuilder users will be migrated to products by Extreme Networks. How will this affect local customers?
We are getting out of high-end core switching business but this doesn’t affect any customers in New Zealand as they have fewer than 1000 users. Most will stay with the existing CoreBuilder range of product and those looking to upgrade will be transitioned to our new Switch 4000 product range which will enable them to stay with Fast Ethernet or move to Gigabit Ethernet over copper. I imagine all our customers will stay. It’s a new generation of products for them. It’s really only large enterprise customers (which doesn’t relate to New Zealand) who would move across to Extreme Networks. That part of the announcement isn’t relevant to New Zealand.
And are you going to cease shipment of the PathBuilder and NetBuilder WAN products from June 30 also?
We announced that we will also be getting out of the high end routing business where we had a very small market share. Those are PathBuilder and NetBuilder products. Most of those products will move across to Motorola. There may be a couple of customers in New Zealand.
What percentage of your New Zealand customers would be CoreBuilder, PathBuilder and NetBuilder sites?
For large enterprises, virtually nil in New Zealand. The main impact in New Zealand would be modem customers. That brand will continue along through our joint venture with Accton and we’ll transition them across.
What is happening with modems?
We’ve decided to exit the analog modem business and will move that across to a new joint venture with [Taiwan-based] Accton Technology. They will continue to sell modems under the US Robotics brand.
Are you keeping your customers informed? What are you telling them?
We have to wait until we get some final product details. We do have follow on products for customers and we want to explain to them what our wide area network access strategy is. We’ll say ‘Here’s the technology going forward, is this a good fit for your business?’ We will continue to support all customers.
What about distributors?
We have spoken to distribution partners and explained to them what the strategy is. We will work closely with them for smooth transition for good product supply and make sure there is no dislocation. Insite Technology which distributes our US Robotics analog modems will be transitioned to work with the Accton joint venture.
Will staff at 3Com New Zealand lose their jobs?
No people will lose jobs.
Were you expecting this announcement given 3Com’s performance lately?
I think it was not a huge surprise. We’d embarked on this strategy here some months ago because it is consistent with the market and the growth in Australia/New Zealand. This is actually a validation that we were doing the right thing here.
Can you outline 3Com’s new strategy?
The company will focus on high growth networking opportunities. Our large enterprise and modem businesses were showing decline so we will focus on three distinct markets - consumer and residential; SME (small and medium enterprise comprises commercial organisations with up to 1000 users which in Australia and New Zealand is probably 99% of the market); and service providers - carriers and ISPs. The three technologies we will use to underpin that growth are IP and LAN telephony through our NBX products; broadband access (which includes ADSL access products); and wireless access technology (which includes CDMA products).
We will have two business models: one focused on service providers, and one on SMEs and consumers.
Can you elaborate on your plans for the consumer market?
The consumer space is very much built around broadband access. Once you start to pipe high bandwidth into people’s homes, they will start to use home networking products. Home networking hasn’t been a big play in Australia and New Zealand so far because people haven’t had broadband access but once players like Telecom (which uses 3Com ADSL modems for its ADSL service) start rolling out ADSL this will increase.
What about the SME market?
We will be aggressive in providing wireless networks and general Internet access for SMEs. In the commercial space we are looking to take our range of networking products and turn them into Internet appliances. Rather than just being hardware boxes we’re looking to embed solutions in them such as Web caching, firewall capabilities, and load balancing for multiple servers. We have for alliances with Inktomi for Web caching, F5 for load balancing and Sonic Wall for firewall capabilities.
We’ve also had a run-away success in the US for our LAN telephony product NBX which we will be launching in New Zealand next month. We have also allied with a CRM company called Apropos, to link their software with our LAN telephony products. Then we will aggressively go after the call centre market.
And what about service providers?
In the service provider market we’ll be adding to our Total Control platform that Telecom uses for its IPNet service so they can provide services such as universal in-box for customers to access voice, data or paging messages from a single in-box.
Consistent with the broadband roll-out of ADSL, we’ve also announced an alliance with Copper Mountain which does DSLAM ADSL devices. At the moment we only supply ADSL products at the client end. This extends our offering to the head.
- See news story on 3Com's exit