Can 3Com Answer the Call?

After stumbling in the late 1990s, 3Com hopes to get a lift from CTI (computer-telephony integration).

Toward that end, 3Com quietly acquired NBX Corp. in 1999 for $90 million in cash. At the time, 3Com was focused primarily on Ethernet cards, modems and the pending spin-off of Palm Inc.

The NBX deal, though nominal in size, gave 3Com instant clout in the promising CTI arena.

"The NBX is a platform that can absolutely help 3Com to turn the corner," says Joe Gagan, a senior analyst at the Yankee Group in Boston. "The NBX team and 3Com have built an exceptional product that theyre successfully driving through the channel."

Indeed, 3Com commands about 30 percent of network telephony shipments, according to Synergy Research Group of Phoenix, Ariz.

In addition to recruiting integrators, 3Com is pitching the NBX to independent software developers. Under a new Solutions Provider Program, launched in September, 3Com hopes to seed the market for NBX-enabled applications, including call-center software and speech-recognition systems. Members of the partner program include Braxtel Communications, Business Layers, CrystalVoice Communications, FastComm Communications and MIND CTI.

"Third-party software companies are doing well because the development kit is open and published," says Michael Leblanc, founder of Leblanc Communications. "Its easy to take code and make extensions."

Still, 3Coms turnaround is far from complete. For its fiscal Q1 ended Aug. 31, 3Com reported a net loss of $232 million. However, 3Com CEO Bruce Claflin recently told Wall Street that he expects the company to be profitable by fiscal Q4. In the meantime, 3Com has $1.45 billion in cash and no debt.