3Com Focuses Enterprise Business On High Growth Markets and Technologies

Edge: Work-Group Computing Report, March 27, 2000

Dramatically refocusing its strategy for the commercial networking market, 3Com Corporation (Nasdaq: COMS) Monday unveiled its plans to target high-growth segments of the enterprise market and formed several partnerships to enhance its offerings to these markets.

3Com will focus on traditionally strong segments of small and medium-sized businesses and selected large accounts, principally those with distributed networking environments.

These segments are the fastest growing areas within the total commercial network market, which 3Com estimates to be at least US$14.6 billion worldwide in 2000, growing to at least US$21.4 billion in 2002. This market prefers to buy networking products in large volume through resellers and the web. They require the utmost in simplicity, reliability and low cost of ownership. These are 3Com's core competencies.

3Com will develop solutions based on technologies that analysts expect to have the highest growth rate: web, IP telephony, wireless, broadband and Gigabit Ethernet.

"3Com built its brand on simplifying complex technology," Edgar Masri, 3Com senior vice president and general manager. "We will focus on markets where 3Com has clear product advantages, great brand recognition, strong worldwide distribution channels and established leadership positions."

Focused Strategy 3Com will provide web-enabled network infrastructure. 3Com's key competitive differentiation will be solutions that are the most technologically advanced yet easiest to use and maintain, in short "radical simplicity." This expressly fits the needs of organizations that cannot justify a large staff of highly trained information technology professionals to maintain their networks.

3Com's business networking strategy is to:

- Deliver the most radically simple, web-enabled e-Networking solutions in the industry

- Focus on customers who value simplicity in network solutions

- Win market share with solutions based on the newest, highest-growth technologies developed internally or by best-in-class third parties:

- Web-enabled network appliances (web-caching, firewalling and load-balancing)

- LAN telephony (IP, H.323 and SIP industry standards)

- wireless networking (802.11 and Bluetooth industry standards)

- broadband Internet access (SDSL, ADSL, IDSL, cable and VPN industry standards)

- high-speed LANs (Gigabit Ethernet industry standards) Reach and service customers through efficient channels, including application service providers and traditional resellers.

New Web-Enabled Solutions 3Com Monday announced plans to develop a new breed of systems called network appliances for the company's industry leading SuperStack product line. The appliances will be SuperStack units that provide the critical network services required for e-Business.

3Com will incorporate Inktomi Corporation's technology into future SuperStack appliances. These appliances will be automated, high performance web-caching and content distribution to improve the speed and quality of service of web-based content and services. Under the alliance, 3Com will embed the Inktomi Traffic Server Engine software into its new network appliances, giving its customers faster access to web page downloads and enabling future services such as media streaming and content filtering.

New 3Com appliances will also include Internet firewall technology from SonicWall, Inc. Incorporating security technology from SonicWall into the SuperStack line will give businesses more protection against hacker's attacks, more privacy and more controlled access to selected Web locations filtering.

Continuing its existing OEM relationship with F5 Networks, Inc., 3Com plans to ship F5-based solutions this May to give customers advanced load balancing for their e-businesses. Also, 3Com intends to begin delivering firewall appliances later this year and caching appliances early next year based on its new partnerships SonicWall and Inktomi, respectively. These appliances are complemented by 3Com's currently available NBX 100 LAN Telephony Communications Systems. Future SuperStack versions of the NBX systems are expected to be available in calendar year 2001.

New Wire-Based LAN Telephony Solutions 3Com Monday announced that it will provide robust, industry leading customer care and call center solutions based on LAN telephony. 3Com has forged a new alliance with customer relationship management application leader Apropos Technology. Specifically, 3Com will integrate the Apropos Version 4 Total Interaction Management Systems with the 3Com NBX 100 LAN Telephony Communications System. 3Com expects to make this solution available in the second half of 2000.

New Broadband Access Solutions 3Com's forthcoming SonicWall-based SuperStack network appliance will work in conjunction with 3Com's existing SuperStack II RAS 1500 product to provide small and medium locations with the optimal VPN (virtual private networking) solution. This cost-effective, easy-to-use stackable combo will provide basic remote access capability through the SuperStack RAS 1500 and robust VPN (Internet protocol security) capability via the SonicWall-based SuperStack product.