3Com Accelerates CommWorks Internet Telephony Solutions With Acquisition of LANSource, Leading Fax-Over-IP Vendor

Business Wire, Dec 7, 1999

SANTA CLARA, Calif.--(BUSINESS WIRE)--Dec. 7, 1999--

Acquires Canadian Company, Stepping Up Efforts To Target

Multi-Billion Dollar Markets, Adding Technology and Expertise for

Advanced Unified Messaging Solutions

Strengthening its position in the growing market for enhanced Internet Protocol (IP) based voice and data services, 3Com Corporation (Nasdaq:COMS) today announced that it has signed a definitive agreement to acquire LANSource Technologies, Inc., a leading vendor of data- and fax-over-IP software applications. The acquisition targets the worldwide IP fax services market, projected to grow from $80 million (USD) in 1999 to $2 billion by 2002 (Source: International Data Corp.). The transaction also provides 3Com with technology and expertise to accelerate its development of fully integrated unified messaging solutions for the IP telephony market, estimated to grow from $272 million (USD) this year to $5.5 billion in 2002 (Source: Ovum).

The transaction is valued at approximately $26 million (USD) and will be accounted for as a purchase. The charge for in-process technology associated with the acquisition is not material and will be included in research and development expenses in the third quarter of fiscal 2000. The acquisition is not expected to materially impact 3Com's fiscal 2000 results. The companies expect to complete the transaction later this month.

"LANSource has distinguished itself as the top innovator in its field," said Irfan Ali, Senior Vice President and General Manager, 3Com Carrier Systems. "They are a strategic acquisition that will enhance 3Com's competitive position in the lucrative fax-over-IP market and help us develop a new range of enhanced IP telephony services as part of our CommWorks IP telephony platform. LANSource's capabilities enrich our product portfolio and demonstrate our commitment to deliver the industry's best enhanced services platform to network service providers."

3Com has had a co-marketing relationship with LANSource since 1997. The two companies have co-developed carrier class fax-over-IP and integrated fax-email messaging solutions based on 3Com's Total Control(R) multiservice access platform and LANSource Faxport Virtual Networking (VFN) software. The acquisition furthers 3Com's strategy to supply Internet service providers and telecommunication carriers with platforms to deploy enhanced services (such as Internet faxing, pre-paid calling, Internet call waiting, unified messaging and integrated voice response systems) for consumers and businesses of all sizes. LANSource applications will be an integral part of 3Com's CommWorks carrier IP telephony platform.

"3Com has proven to be a great ally in the lab and in the field," said Marc Bisnaire, President of LANSource. "The acquisition will enable us to leverage the enormous resources and expertise that 3Com offers to enhance our market presence and accelerate development of leading edge network applications." After the acquisition is completed, Mr. Bisnaire will remain at 3Com, reporting to 3Com Carrier Systems Senior Vice President, Mr. Ali.

Innovative Applications for the Fax-over-IP Market

3Com's Total Control systems running LANSource's FAXport VFN software offers carriers and Internet service providers (ISPs) a complete platform for delivering cost-effective fax services to corporate customers of all sizes. Service providers are expected to have provided 640 million minutes of fax-over-IP services worldwide this year, with growth expected to reach 7.8 billion minutes in 2002 (Source: International Data Corp.). The combined Total Control FAXport VFN solution enables PC-to-fax, Web-to-fax, LAN-based fax-to-fax, standard fax-to-fax and fax-to-email services.

Using service provider-based fax services, a business can eliminate its fax machines and LAN-based fax servers, reducing hardware, maintenance and long distance fax charges. Analysts expect that converged fax-data networks will result in significant cost savings for businesses.

Envisioning Unified Messaging Applications for Business Users

The LANSource acquisition is expected to form an integral part of 3Com's CommWorks platform for unified messaging applications. The platform enables the deployment of enhanced IP-based telephony services -- now on trial at carriers and ISPs worldwide. 3Com's vision for unified messaging will enable people to use their personal and handheld computers to access voice, data and multimedia-based messages from a universal mailbox over fixed, dial-up and wireless communications.

For example, this would allow a business traveler to use a wireless phone to receive a message that an important fax was received and is being held in her fax mailbox, with choices to review the fax or direct it to be printed at the hotel concierge desk. Likewise, a home office user could have a personal phone number for voice and fax messaging. The user could set a personal profile for his messaging mailbox to link it to his email, paging service, wireless microbrowser-based phone, a web mailbox and more. This mailbox could then be accessed by multiple methods providing him the ultimate in flexibility for personal messaging.