3Com "Switched On" in China

You don’t have to look very hard to find glimpses of former glory in the ancient city of Hangzhou. It’s in the gold and bronze pagodas or the ornate architecture of the emperor’s temple positioned along the banks of the West Lake, magnificent and imposing.

As you approach, you realise the years have taken their toll on the façade and what was once the symbol of a powerful empire is littered with tourists trying to imagine what it must have been like when the region was in its heyday. This city with a glorious past and a somewhat unimpressive present next to thriving cities such as Beijing and Shanghai was a surprisingly appropriate setting for the 3Com partner conference.

3Com was once a powerful player in the telecommunications and networking market, altering the IT landscape in the 1970s with the creation of Ethernet. Then a few wrong moves along with an unforgiving and fast-paced IT market left the vendor broken and desperate to regain its status as a global leader. Some analysts identify 3Com’s failure to build an enterprise LAN equipment business as the main reason for its downfall – and the key to Cisco Systems’ success.

This sobering realisation that the company plummeted from such a coveted position as a result of poor decision-making is perhaps the driving force behind the current 3Com business strategy.

There was certainly plenty of enthusiasm and morale building as Bob Dechant, general manager of Data and Voice Business Unit and senior vice president, 3Com Corporation, kicked things off with a keynote that had all the elements of a presidential campaign speech.

Promises of a return to former glory and an optimistic outlook for the future of 3Com formed the foundation of his message to partners who had endured highs and lows over the years and had become understandably wary of corporate assurances.

“I think that we are at a point in our company’s evolution to accelerate our business model to success, which makes our partnership more powerful,” said Dechant. “Today in the China market over the past three years we went from negligible market share to greater than 30 percent market share. I don’t know any other player in this market who can take on the 800-pound gorilla and beat it.”

3Com’s greatest asset, according to Dechant, is its research and development portfolio. The vendor has R&D facilities at its headquarters in Marlborough, Massachusetts, Beijing, India and, of course, Hangzhou. The recent acquisition of H3C, supplier of IP-based products and solutions based in China, is one of several initiatives aimed at revitalising 3Com’s market presence, particularly in APAC.

If the mood of the attending partners is a reflection of how the acquisition will be received globally, 3Com has succeeded in injecting energy into its cause and reengaging channel partners by allying itself with a technology innovator that has a strong presence in Asia.

“Our competition likes to talk about 3Com as a struggling entity and I’d like to challenge that,” said Dechant. “Over four consecutive quarters this business has generated operating profit – I don’t believe this is the 3Com Cisco wants you to know.”

The word “win” featured heavily in Dechant’s keynote. Much like Rocky Balboa’s triumphant return following a solstice, he envisions a glorious comeback for 3Com.

Recently launching a service and support model dubbed Project Daylight in Sydney and other key cities including Hangzhou, Dechant explained that 3Com is making a conscious effort to establish a presence in the APAC and admitted that the previous support base in Toronto wasn’t effective in servicing this region.

“This is a complex world where our customers are putting in solutions that span many vendors, many environments and a lot of power sources in this ecosystem of a solution,” said Dechant. “We’ve completely overhauled our services model and we’ve moved to a hybrid model – some in-source and some outsource – to deliver on our customer experience as we never have before.”
Effective in motivating the attending partners, Dechant then handed over to Peter Chai, vice president and general manager, 3Com Asia Pacific to provide a more in-depth analysis of the strengths and weaknesses of the vendor and the specific issues that are being addressed to facilitate growth in APAC.

3Com has allocated considerable resources to the Focus Partner Program, which aims to strengthen channel relationships. It is the company’s way of giving something back to partners by providing the tools and advice to effectively sell and support 3Com products. Chai added that there needed to be reciprocal commitment from both the vendor and partners in order for growth to occur on both fronts.

“Without commitment you end up doing things a little half-heartedly,” said Chai. “Commitment is fundamental to the strength of the partnership and we want to make everyone – both sides – committed and able to cater to the needs of the customer.”

3Com also announced enhancements to the existing model that offer greater benefits for channel partners in APAC. These include the integration of H3C switching products into the 3Com enterprise LAN specialisation, which in turn enables the integration of H3C partners to the 3Com partner infrastructure; and SMB solutions specialisation offering rewards to partners that sell 3Com products targeted at small business.

“Following the integration of 3Com and H3C technologies in July 2007, H3C was ideally positioned as a strategic solution suite of 3Com, targeting the large enterprise market,” said Chai. “Having H3C partners integrated into the partner program allows advanced solutions such as IP storage, IP surveillance and the soon-to-be-launched multiple services router to be brought to customers in APAC faster.”

SMBs account for 35 percent of 3Com sales in APAC and therefore the inclusion of SMB solutions specialisation in the program creates an opportunity for resellers to expand their customer base. Another advantage is smaller businesses can benefit from the expertise and product offerings provided by 3Com, said Chai.

“Small business product lines in the Focus Partner Program will have an immediate effect on streamlining the SMB solution go-to-market process and rewarding partners selling these products with quarterly rebates plus many other new benefits,” said Chai.

There were no false pretences claiming that the name 3Com holds considerable weight in the current IT landscape, and this acknowledgment of poor branding has directed resources to the company’s marketing division. Chai comments that more work needs to be done to boost the esteem of the 3Com name.

“We have a lot of work to do,” said Chai. “You’ll be hearing from us and customers will be hearing a lot more, not just about the 3Com brand, but also about how to present the 3Com brand.”

There are no insecurities, however, regarding the quality of 3Com products – and both Chai and Dechant emphasise that strong product offerings are the foundation of 3Com’s business strategy. The lack of recognition in the market up until now is attributed to poor marketing and a lack of engagement with the distribution channel.
“I expect this program to take us a long way from where we are now standing,” said Chai. “I believe we have a good marketing team in terms of lead generations as well as product marketing.”

Chai finishes with a piece of advice for partners. He recommends that they focus on their individual areas of expertise to achieve growth, and in return 3Com will provide the support to help them realise their goals.

Raju Chellum, vice president Asia Pacific, AMI Partners then took the stage to shed some light on the significance of the SMB market with an entertaining presentation. He was followed by Anna Dorcey, senior director of open networks and enterprise product marketing, 3Com Corporation, who provided a detailed account of 3Com’s latest offerings and explained what she refers to as “the ecosystem behind the methodology”, in particular 3Com ON, the company’s open network program.

A partner conference wouldn’t be complete without a tour of the facilities and a couple of demonstrations to assure partners that the vendor is at the cutting-edge of the latest technologies. A busload of press and partners were transported to the Hangzhou base of operations for the recently acquired H3C. Networking technology, security offerings and video conferencing solutions were on display with impressive demonstrations leaving attendants suitably impressed.

H3C is expecting to make an impact on the Australian market with products including its Multiple Service Routers (MSR) series, delivering wire speed and concurrent services of data, voice and video. R&D has also been invested in developing a new series of switches geared to both enterprise and SMBs.

So, 3Com has invested in R&D, marketing and has joined forces with innovative and influential players such as H3C and Bain Capital. It all sounds fantastic; however given 3Com’s history you can’t blame partners for remaining slightly skeptical. In an attempt to provide greater transparency as well as support for its channel partners, 3Com has established a Partner Resource Centre featuring alerts such as technology updates and topical case studies. Designed to be a source of information and also technical support, the resource centre acts as a virtual tradeshow where relevant information is congregated onto one platform for the convenience of users.

“This is designed to empower partners,” said Nick Tidd, vice president worldwide channel sales, 3Com Corporation. “We approached this with the attitude that we would take responsibility for compiling all these tools for our partners.”

There is also the added allure of a rebate program and various other incentives for resellers. Ease-of-use was another major consideration when developing the resource centre.

“Navigating is seamless and intuitive, everything is easy to find,” said Tidd. “It’s about making it easier for resellers to access information that is most relevant to them, whereas on other sites you can be overwhelmed by the volume of data that doesn’t apply to you.”

When the formalities concluded for the day, the organisers felt a night of entertainment was in order. Press and partners were treated to a live performance that featured a spectacular light show and a cast of hundreds dancing, sailing or playing instruments on a stage hidden under inches of water at the famous West Lake.

It’s difficult to predict whether all the ambitions of the vendor will be realised, but the 3Com Asia Pacific “Switch On” conference appeared to be successful in alleviating partner concerns that the company had become complacent.

The proactive approach 3Com is taking to reclaim a larger percentage of market share in APAC – investing in marketing, partner programs and acquiring growing businesses – might succeed. Leaving the conference, many partners were of the opinion that they just might pull it off.