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    3Com Takes Aim at Cisco

    By
    Jeff Burt
    -
    May 11, 2009
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      After several years out of the market, 3Com is looking to get back into the worldwide enterprise networking space and has put dominant player Cisco Systems in its sights.

      3Com, which got out of the global enterprise networking space about five years ago to focus its efforts on the small and midsize business market, is planning to use the networking company it owns in China as the vehicle to gain traction in such regions as the United States, Europe and Latin America.

      3Com officials are announcing their plans-as well as several new offerings in its H3C business-May 11, and will put H3C’s entire product portfolio on display at the Interop 2009 show in Las Vegas May 17-21.

      For images of 3Com’s new offerings to challenge Cisco, click here.

      Like others in the networking space, 3Com sees a rapidly evolving market that is looking for a lower-cost alternative to Cisco. Economic pressures are forcing businesses to reassess their IT spending, while consolidation within the market continues. Most recently, QLogic announced plans May 1 to buy NetXen, while Broadcom continues its push to buy Emulex.

      “For the first time in years, enterprise customers are looking for other vendors,” said Saar Gillai, senior vice president of worldwide products and solutions at 3Com. “There is a changing supplier landscape.”

      Gillai said 3Com is hoping to take the path traveled by such companies as Toyota and LG Electronics, which brought successful businesses out of Asia and into the global markets.

      3Com isn’t the only vendor looking to take away some of Cisco’s dominant-about 70 percent-U.S. market share. Brocade, Hewlett-Packard and Juniper Networks all are making strong moves in the space.

      Chris Silva, an analyst with Forrester Research, said 3Com’s timing is good.

      “Given the economy and given the cost-control measures in place [at enterprises], it’s a great time to come in as the low-cost alternative to the Ciscos and Junipers, who also is making a play in the enterprise,” Silva said.

      3Com officials say their networking switches can cost as much as 30 percent less than competitive offerings from Cisco. However, Silva said that 3Com will run into those other companies looking to take shots at Cisco, and that given that many networking product purchases are made in conjunction with larger business projects-such as increasing collaboration or improving efficiencies-being simply a supplier of products that cost less and are less complex than Cisco’s may not be enough of a convincing argument for some enterprises.

      Juniper is making its play based in large part on better efficiencies than Cisco thanks to its single Junos operating system. HP’s ProCurve networking business is easily tied to its other technology offerings. For its part, Cisco is expanding its reach in the data center with its Unified Computing System initiative.

      In addition, Silva said, Cisco has the size to heavily discount its products if it needs to thwart a competitor.

      “It’s a very hot, competitive environment [3Com is] entering into,” he said.

      However, 3Com officials say their H3C business has the products-from switches and routers to WAN controllers, unified communications devices and VPN firewall offerings-to compete with Cisco, HP, Juniper and others in the space, and that the Chinese market is the only one in which Cisco has a strong market share competitor. H3C is the second-largest enterprise networking company in China-behind Cisco-with 35 percent market share, and has grown over the past five years to $609 million in revenue in 2008.

      3Com partnered with Chinese company Huawei Technologies five years ago to create H3C, and in 2006 bought out Huawei’s share of the company for $882 million.

      3Com already has sold some H3C products outside of China over the past few months-mostly in Europe-and has been encouraged by the response, Gillai said.

      When they announce their intent to grow their H3C business beyond China, 3Com officials also will unveil new switches and new management software. The H3C S12500 high-end switch offers enterprises a “platform on which to build future data center infrastructures,” said Dominic Wilde, senior director of 3Com’s global product line management.

      The switch offers either 864 Gigabit ports or 512 10 Gigabit ports, and will be able to support new capabilities-including 40 Gigabit, 100 Gigabit and FCoE (Fibre Channel over Ethernet) technologies-when they move into the data center. In addition, compared with Cisco’s Nexus 7000 product, the H3C S12500 offers twice the performance and scale and consumes 50 percent less power, 3Com officials said.

      The S5800 Flex-Chassis switches offer midsize enterprises high performance at any layer of the network.

      In addition, 3Com’s IMC (Intelligent Management Center) gives businesses single-pane management that not only can manage 3Com and H3C products, but also those from third parties.

      “One of Cisco’s big Achilles’ heels is its management strategy,” Wilde said.

      The IMC will be available in June, while the S12500 and S5800 will be available in July.

      Jeff Burt
      Jeffrey Burt has been with eWEEK since 2000, covering an array of areas that includes servers, networking, PCs, processors, converged infrastructure, unified communications and the Internet of things.

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