NEW YORK (03/27/2000) - 3Com Corp. customers were blindsided last week by the company's plan to kill off its large enterprise switches.
While a 3Com restructuring had been anticipated, the details revealed last week came as a surprise. 3Com said it is discontinuing its large enterprise LAN and WAN switches, as well as selling its analog modem business to focus on higher-growth markets, such as small/midsize enterprises and service providers.
The news was a slap in the face to customers who had assurances from 3Com as recently as this month that it was committed to these cancelled products.
"I just bought some in February and March," says Roderick White, vice president of telecommunications at the Home Shopping Network (HSN) in St. Petersburg, Florida, which had been a showcase account for 3Com's CoreBuilder LAN switches.
"Had I known that they were getting ready to shift to something else I sure as heck wouldn't have bought them."
The last customer shipments of 3Com's CoreBuilder LAN switches, PathBuilder and NetBuilder WAN switches and routers, and analog modems will be June 30. 3Com has entered into relationships with Extreme Networks and Motorola to shift its LAN and WAN switch customers to those vendors, respectively.
For analog modems, 3Com is selling its operations to Accton and NatSteel and establishing a separate company with those partners, of which 3Com will hold a 20 percent stake.
"We are exiting three businesses that were not delivering growth and financial returns," says Bruce Claflin, 3Com's president and chief operating officer.
A wise business move perhaps, but 3Com's retreat upset many users. Not only did HSN purchase some CoreBuilder switches earlier this month, but as recently as November, 3Com executives said the company was steadfastly committed to the CoreBuilder platform.
"I'm not happy about this at all," says HSN's White, who heard about the CoreBuilder's demise from this reporter -not from his 3Com account representative. "I was completely blindsided. This really throws some plans we had into disarray."
Widener University in Chester, Pennsylvania, is another 3Com CoreBuilder showcase account that will have to postpone its network plans by up to a year as it decides what to do and where to go next. CoreBuilder switches were the foundation of Widener's converged voice/ data/video network.
"I was very surprised when I was originally briefed by Bruce Claflin," says Gary Habermann, Widener's director of network operations. "[3Com's moves are] definitely going to delay our plans for six to 12 months to give us time to review our options. Once we have a new core in place, we will begin to re-evaluate our convergence plans."
The Lee County School District in Ft. Myers, Florida, was also caught off-guard. The school district was awaiting approval of funding for 70 more CoreBuilder switches when word of the product's death arrived.
"This appears to leave all of us who have invested heavily in the 3Com CoreBuilder strategy on very shaky ground," says George Stapp, systems analyst at the school district. "In light of the current 3Com news, we will be considering other options, including going ahead with our current planning structure."
3Com says it had to keep the information close to the vest for fear of its customers misinterpreting the message.
"We had to be very careful in the way we communicated this news," says Edgar Masri, senior vice president and general manager of 3Com's Network Systems business unit. "There was no way to start having some conversation with a subset [of customers] without risking having people misunderstand the whole plan. But since we made the announcement, we have taken an extensive amount of time to approach our user group and communicate with our customer care team.
But most importantly, through the relationship we have expanded with Extreme, we provide them with a clear vision of how their network could scale moving forward."
Stapp says he's not familiar with Extreme Networks but will study up on the company immediately. Extreme was founded in 1996 as a Gigabit Ethernet start-up and went public in October 1999.
Others are not buying into the Extreme angle. The City of Regina, Saskatchewan, Canada, has no plans to migrate its CoreBuilder infrastructure to Extreme, says Dale Strawford, a network architect. He says the city is more likely to transition to Cisco.
"It is always nice to get screwed by a manufacturer," Strawford says. "I am so glad they were kind enough to set up a migration path to Extreme. No thanks."
White says his company is currently evaluating Foundry Networks as a supplier of Layer 4 to Layer 7 switches, so HSN will also look at Foundry gear as a possible replacement for its CoreBuilder Layer 2 and Layer 3 network. Widener's Habermann is also weighing his options.
"We like Extreme, they have some really nice products, but we will be evaluating several other vendors," he says.
Customers of all dropped product lines will continue to receive service and support for up to five years, 3Com says. But HSN's White is not reassured by those words.
"That's bogus," he says. "You know as well as I do that once they quite selling stuff the support for it just goes downhill. Frankly, I've lost my investment.
I no longer have a platform that I can grow with."
3Com is the latest company to divest itself of its large enterprise operations.
Lucent in February spun off its enterprise businesses to eliminate a distraction as it targets the service provider arena. Cabletron recently split into four companies to better focus on higher-growth markets.
That appears to leave Cisco as the de facto standard in large enterprise data networks. But with voice/data convergence looming as the next growth phase for these environments, Cisco will pit its strength in data against Lucent and Nortel's long legacy in voice networks and vast installed base of PBX customers.
3Com, meanwhile, will set its sights on the consumer, small/ midsize enterprise and network service provider markets with its HomeConnect, OfficeConnect, SuperStack, NBX and Total Control product lines. 3Com is stressing its brand name, channel structure and ease-of-use attributes as it focuses on these markets, and will commit technology resources to broadband access, wireless, LAN telephony, multiservice and home networking.