3Com: Strength in Numbers

By Darrell Dunn  |  Posted 2007-08-27 Email Print this article Print
 
 
 
 
 
 
 

3Com's alliance with IBM could help boost the firm's growth.

With roots in the enterprise voice-over-Internet Protocol market for more than a decade, 3Com has worked with customers through the early hype and thousands of deployments. To position itself in the developing IP telephony and unified communications market, the company in October entered into a partnership with IBM to deliver an all-in-one solution for running business applications in an IP-based environment.

The System i Telephony platform combines 3Com's VCX IP Telephony Module with IBM's System i server architecture to allow businesses to deploy a single system to handle telephony and core business applications. The use of open standards-such as Session Initiation Protocol (SIP)-on the VCX platform has made it simpler to integrate applications running on System i, including Lotus Sametime and Domino, with plans for integration with third-party applications from Oracle, SAP and others.

The partnership comes as 3Com strives to achieve profitability. 3Com has reported losses of more than $1.5 billion in the past six years, but it has steadily reduced the red ink over the past three years. 3Com reported a loss of $88.6 million on revenue of $1.3 billion in its fiscal year 2007, ended June 1, an improvement over the loss of $100.68 million on revenue of $795 million in fiscal 2006.

3Com built its IP technology through the acquisition of MBX Corp. in 1999. MBX provided the company's first IP PBX product line, which it continues to sell primarily to small- and medium-size businesses. Buying US Robotics in 1997 added a software-based VoIP platform that has been developed into the VCX product line used by enterprise-level customers.

The timing of 3Com's partnership with IBM was serendipitous for the Fashion Institute of Design & Merchandising (FIDM), a Los Angeles-based college of fashion, graphics, interior design and entertainment. A longtime user of IBM's System i servers, CIO Roxanne Reynolds-Lair was thrilled to hear about the 3Com partnership. "It was the confidence we had in IBM that was a real selling point," she says. "If they chose 3Com as a partner, then I knew it had a really strong chance of being successful." With locations in Los Angeles, San Diego, San Francisco and Orange County, Calif., FIDM's existing TDM communications network was costing the college thousands of dollars too much each month. The network also needed upgrading, and school directors wanted to move to VoIP. The school has reduced operational costs by centralizing management and eliminating separate TDM PBX installations at each campus, saving about $250,000 annually, Reynolds-Lair says.

The school is developing "click-to-chat" capabilities to let students work online with admissions and financial aid counselors. Voice mail, e-mail and faxing have been integrated. As a user of IBM's WebSphere and Domino, Reynolds-Lair believes the platform will offer even greater levels of integration in the months ahead.

Arnie Unger, technology supervisor for the Tahoe Truckee School District, says the 3Com IP telephony platform is easy to operate for the school system's two-person I.T. staff. The district has 4,100 students, 471 employees and a dozen campuses located across 720 square miles in Northern California and Nevada. The district has also begun the integration of new functionality into the platform: One campus is capable of running its clocks, bells, lighting, heating, air conditioning and security systems via the IP network.

"The 3Com platform has provided a good backbone with enough flexibility to allow us to do most things remotely," Unger says. "Everything is going toward IP, and this school district has had a vision to utilize the best technology that meets our needs. A centralized administration of the network has been a great start, and we believe the platform, slowly but surely, will provide the basis for a lot of improvements."

At A Glance

3Com
350 CAMPUS DRIVE
MARLBOROUGH, MA 01752
(508) 323-1000
www.3com.com

TICKER: COMS (NASDAQ)

EMPLOYEES: 6,309

EDGAR MASRI President & CEO

MARC WILLEBEEK-LEMAIR CTO

PRODUCTS: The VCX IP telephony module integrates with IBM's System i server architecture.

CUSTOMERS: Citizens Bank, Dallas Cowboys, Host Marriott, L.A. Weight Loss Centers, U.S. Fish & Wildlife Service

FINANCIALS

2007FYTD* 2006FY 2005FY
Net Revenue $1.27B $749.81M $651.24M
Net income (loss) ($88.59M) ($100.68M) ($195.69M)
R&D spending $215.53M $101.87 $94.58M
Fiscal year ends June 2.

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