3Com accelerates expansion into Africa

Leading global networking company 3Com believes the time is right to accelerate its expansion in African countries. Market maturity, the acceptance of open standards and the demand for value underlie a customer profile that 3Com is keen to address.

Being driven from Johannesburg, South Africa, where 3Com has been based for more than 15 years, the company's strategy is to build local presence in other major centres throughout the continent by following its channel model and appointing regional distributors with a strong reseller footprint.

3Com products are already distributed in the region via South Africa-based distributors and their network of accredited resellers in Namibia, Botswana, Mozambique, Kenya, Zambia and Morocco.

3Com's first distributor outside South Africa was appointed in Mauritius in August and operates as a pilot for the expansion programme. NetEra.Com is a fast-growing independent company operating throughout the Indian Ocean Islands region - Mauritius, Seychelles, Comores, Reunion and Madagascar.

“We are fine-tuning our model before moving along the expansion path to east and north Africa,” says Derek Wiggill, regional sales director for Africa.

“There is a lot of potential for expansion in Africa and we believe we're poised with the right products at the right time. Because of the current financial turbulence, people are looking for value and switching away from proprietary solutions.”

The expansion is based on 3Com's direct touch approach whereby it will establish direct consulting relationships with prospects and customers to explore their communications needs and help them devise networking strategies. This will give channel partners a framework within which to supply and support customers, while 3Com plays an oversight role.

Wiggill stresses that 3Com will “never take away the channel's relationships with their clients, but we believe we can add value by having a higher-level view with communications insights that can help clients expand their horizons.

“Our growth is based on our commitment to being a channel-centric company that supports partners and customers with strong 3Com consulting and network engineering skills.”

Because it is looking for sustained growth on the continent, 3Com is taking a phased approach. “We will make sure each market is viable before moving on to the next. We will take lessons learned from each and apply them as we expand,” says Wiggill.

A key component of the expansion strategy is resource acquisition and training. Staff in the Johannesburg and Cape Town offices has grown by 25% this year and is expected to double next year. An office was recently opened in KwaZulu-Natal.

An aggressive training programme to upgrade technical skills in the staff and channel base is underway to ensure top-grade support for customers' infrastructure.

“We are investing in people upfront because this is critical to our sustained growth,” says Wiggill. “We need to boost our numbers of enterprise network engineers. Our expansion plan is an investment, not a gamble, so we must ensure it delivers sustainable growth through exceptional support.”

Within Africa, engineers fluent in the local predominant language - such as French and Portuguese as well as English - will be employed.

“We are adamant that our operations elsewhere in Africa will be of the same quality as they are in South Africa, so we are making a significant investment in resources and structure to ensure that there are no compromises on quality just because our reach is geographically dispersed,” he says.

“We are confident that the remote management model we're evolving with the Mauritian operation will stand us in good stead throughout Africa.”

The 3Com product mix is likely to be consistent throughout Africa. “We have the product range to be extremely successful in Africa,” says Wiggill. “The challenges of network infrastructure are the same, particularly over the 'last mile' to the customer's premises. The customer profile is also similar - with major opportunities in the government and private sectors.”

Morocco and Algeria have among the best communications infrastructures in Africa, with the added advantage of cheaper bandwidth than South Africa's, so their small business market is well served through DSL connections.

A major advantage in markets that demand value is 3Com's acquisition of H3C Technologies, a China-based developer and manufacturer of network infrastructure products. 3Com leverages H3C's research and development capabilities and its mass production facilities in China to deliver price-competitive, top-quality products around the world.

The collaboration with H3C has spurred major growth for 3Com internationally as it has expanded its enterprise networking solutions and capabilities. 3Com now tops China's massive market for enterprise stackable switches, routers and IP storage and is number two worldwide in Ethernet switching ports and enterprise routers.

This renewed product and market strength positions 3Com well to expand its reach into the corporate environment. Government has been the predominant market in 3Com's client profile but, with the corporate world increasingly wanting to exercise choice and seek value the company sees its product offerings stimulating growth in this market sector.

Wiggill says that key to 3Com's expansion strategy is its commitment to open standards. “We can slot into most existing networks with ease and enable customers to incrementally switch to newer, cheaper technology as the need arises. They can implement flexible, high-value end-to-end networks from a choice of components.

“We find that organisations are more confident about building solutions with a mix of best-of-breed products than they were a few years ago. Open standards has enabled them to look beyond the big-name proprietary systems that made them feel secure about network reliability, but locked them in. Customers now implement networks that deliver value while significantly lowering costs.”

In South Africa, where 3Com's reputation has been built on stackable switches and router ports, the company's expertise in voice solutions is rapidly gaining ground.

“Our fastest growing market is now voice over Internet Protocol and IP telephony. The need for convergence in enterprise communications strategies in both large organisations and smaller companies is being driven by the need for affordable, flexible and robust solutions.”

Wiggill adds that wireless networking demand is dramatically growing. “WiFi local area networks (LANs) are being installed everywhere since reliability and security issues have been addressed as the technology has matured.”

Starting to appear on the enterprise radars is the green - or energy conservation and carbon footprint - issue. Here 3Com has stolen the march on other networking companies. In-Stat has rated the 24- and 48-port LAN switches as the most energy-efficient in the industry.

“We believe that our product offerings, pricing and expansion strategies have positioned us for growth at the time when there is a global push for value and flexibility,” says Wiggill. “3Com leads the industry in price-performance and enables customers in government, corporations and the small business sector to connect users, embed new services into the network and significantly lower their costs. This is a sound platform for 3Com to become the major network provider in Africa.”