Tech Pac to pump up 3Com

Broad-based distributor Tech Pacific will pump up 3Com channel sales over the coming months, in an effort to plug a $70 million per annum sales revenue hole created by the departure of Cisco Systems from its books.

Speaking to CRN, Stanimira Koleva, managing director South Asia at 3Com, said the company hoped to capture up to 30 percent of Tech Pacific's networking business over the next 12 months, spurred on by marketing, training and reseller recruitment initiatives.

Koleva said Tech Pac had quite a sizeable business with Cisco in the SMB market segment, which 3Com could match. 'We're coming out with a number of new products filling gaps in the WAN space with a new series of routers and we're also planning to expand our switch portfolio,' she said.

These new products stemming from 3Com's joint venture with Huawei Technologies are claimed to be helping the networking vendor pick up market share against rival Cisco Systems.

'In a three- to six-month timeframe, [3Com] will have a comprehensive end to end portfolio that will cover any type of network infrastructure project.'
'[Tech Pac's] reseller base and territory-wise is impressive,' she said.

Koleva wants Tech Pac's large base of networking-focused resellers, who were previously buying Cisco from the distributor, to consider 3Com as an alternative.

'Only the [resellers] who see the real differentiation and explore the idea of pushing an alternative vendor are the ones that really matter,' Koleva said.
Koleva claimed that Cisco's rebate and pricing structure is too 'skewed' towards the networking giant's larger reseller customers. 'We as a vendor don't have a scheme that would skew pricing and rebates towards the very big network integrators,' she said, adding that 3Com predominantly works with the SMB channel.

She claimed that at least 'in the short to mid term' 3Com would offer opportunities for resellers to earn significantly better margins than they would selling Cisco. She claimed resellers currently make at least 10 points on sales of the company's switching products.

She said Tech Pac would provide fast-track technical training for Cisco resellers that wanted to sell 3Com as well. 'It will be a good chance for [reseller] differentiation. The cost of doing business [with 3Com] will also be lower,' Koleva claimed.

Tech Pacific has had a 3Com agency for the past 12 years, with a focus predominantly on low-end products. 'We are moving upwards, addressing the enterprise market - everybody wants to be where they're [Cisco's] not at the moment,' Koleva said.

She claimed that 3Com was previously doing less than $10 million in annual sales through Tech Pacific, but hoped to at least 'double' its business with Tech Pacific from now.

Kerry Baillie, managing director at Tech Pacific Australia, said 3Com's joint venture with Huawei is an 'inflection point in the history of networking' as it brings together the company that invented Ethernet and the largest networking company in China. '3Com, having realised the error in leaving the enterprise space, and Huawei, who want to expand globally, have combined forces at the perfect time,' said Baillie.

'Jointly, they have the product, design capabilities, management skills and the global market presence to make an impact on the current market dominance of Cisco,' he added.

Baillie said that the amazing market response to this JV and 'our strategic role with 3Com in Australia' shows that the time is right to level the playing field against Cisco and their chosen few.

'It will be a tough match, but let's have some fun scoring a few early tries. It is ironic that we had not proceeded with our earlier Huawei discussions out of loyalty to Cisco,' he said.

3Com will now be required to provide education at a general management level to show that there is a bone fide and more cost-effective alternative to Cisco, he said. 'It is also essential that 3Com, assisted by Tech Pacific, ramps up its warranty and support structure for our channel partners. We also need to slow down the poaching activities by LAN Systems of our Cisco-trained staff,' he said.