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3Com to can SAN plan

Product development brought to a halt to save R&D spend

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3Com has abandoned its attempt to break into the Storage Area Network (SAN) market, less than six months after embarking on the strategy. The company's president and COO, Bruce Claflin, described the move, which is being made to allow the company to focus on its networking and Palm products, as a "difficult but good business decision". A 3Com spokesman told US newswires that the company was months away from releasing the SAN products it had announced last November through partnerships with four storage vendors: Clariion, Data General, Legato and MTI. The company recently posted Q3 1999 results, which showed a slowdown in its growth -- year-on-year profits were up tenfold but still not as high as the company had originally expected. At the same time, company executives predicted sales will continue to slow in Q4. It's clear, then, that 3Com feels its plans for the SAN market were rather too enthusiastic and it needs to focus on what it's best at right now instead of pushing into new areas, conserving its R&D spend for other, more core projects. The spokesman said the investment 3Com would have to make to get to the forefront of the SAN arena was not one is was prepared to make. Yet he maintained the company's line on the SAN market was that it continues to be highly lucrative. That suggests that, at the very least, 3Com nowadays has a rather more short-term outlook than it has had in the past, or worse, it's financial position for the next quarter is looking considerably poorer than the last one. ®

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