US networking company 3Com has acknowledged and overcome the mistakes of the past and is now firmly a contender again, says Mike Ansley, VP for Europe, Middle East and Africa (EMEA).
Once seen as a serious rival to its far larger counterpart, Cisco, 3Com made two serious mistakes following the industry consolidation that resulted from the dot-com bust at the turn of the century.
Ansley is currently in SA, meeting with various 3Com distributors, resellers and customers.
"Firstly, we outsourced our services division and then we focused too heavily on the small business element of the sector. But we have rectified that. When a customer contacts our service branch, they now talk directly to a 3Com employee, and we have invested heavily in our research and development arm and we are winning back our enterprise customers," he says.
In the second quarter of the 2008 financial year, 3Com reported a 4.6% decrease in revenue, to $317.8 million, with a net loss of $35.6 million, primarily as a result of its purchase of Chinese manufacturer Huawei's 49% share in H3C. However, the company said that, while revenue was lower than anticipated, its gross margins were at recent record highs.
3Com, Ansley claims, has been particularly successful in the public sector, where clients include the SA National Defence Force, and the departments of justice and correctional service.
The proof of the success, he says, has been in the local market where under the leadership of Gavin Zackey, 3Com's regional sales director for Africa, the company has doubled its revenue in the past year.
It is also investing more into the local market by increasing the number of employees and is becoming more involved in winning clients directly before handing them over to one of the local distributors or resellers.
Like many other US companies, 3Com does not release data on individual countries. However, Ansley points out that research firm International Data Corporation showed the EMEA switching and networking market grew by about 2% on an annual basis in the last quarter, while his company grew by 8%.
Globally resilient
On a global scale, Ansley says, 3Com is probably better able to weather the current economic slowdown in the US as it has a large presence in China, from where 51% of its revenue originates. Competitor Cisco receives 58% of its business from the shaky North American market. 3Com sells its products in China under the H3C branding.
3Com has a total of 6 100 employees worldwide and 2 400 are directly involved in research and development.
"Our heavy emphasis on R&D means we are also very aware of the issues and trends affecting the industry," Ansley says.
In particular, 3Com is punting its focus on green IT in using its products to conserve energy.
"We are in the forefront of developing the industry standards, in particular the IEEE 802.3AT and 802.3AZ standards, where one of our technical experts, David Law, chairs the committee."
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