3Com - a company built on ether
Master of technologies that vanished
3Com's sale to Huawei Technologies and Bain Capital for $2.2bn marks the end of a company which pioneered Ethernet and network computing, and once owned Palm.
3Com was named for "computers, communication and compatibility" by one of its founders, Robert Metcalfe, who had come up with Ethernet as a networking technology while at Xerox Parc.
Ethernet wasn't, and isn't, a particularly good networking technology. Its listen-wait-then-listen-again rule for avoiding collisions on networks is simplistic, and both Token Ring and ARCnet offer greater predictability and (at the time) better speeds - but Ethernet turned out to be surprisingly robust, and as processor power increased the advantages of its competitors became less compelling.
3Com started shipping an Ethernet transceiver in 1981, and within the first year sales were up to $1.8m, despite a cautious approach to expansion.
It was the personal computer, in the form of the IBM PC, which really accelerated 3Com's sales - everyone wanted to connect their desktop computers to each other, mainframes, and printers. But, such was the success of networking, IBM and its competitors started building Ethernet hardware into their computers, depriving 3Com of sales.
Faced with lagging sales, 3Com directed its attention to servers and developed 3&plus, its very own network operating system. By 1986 network servers accounted for 32 per cent of the firm's sales, and the company started to look at providing clients in the form of UNIX workstations called the 3Station, eventually leading to a proposed acquisition by Convergent Technologies Inc, which was pulled at the last minute.
By 1987, 3Com was competing with Novell in providing "workgroup computing" at a time when the word "Novell" was synonymous with "network". A close relationship with Microsoft for a NetWare-competitor called LAN Manager to be run on OS/2 was undermined by the spectacular failure of OS/2.
But another purchase in 1987 proved more prescient - Bridge Communications Inc manufactured boxes for connecting different networks together, something an awful lot of people wanted to do.
In the early 1990s, the company was again in trouble. With its network OS and LAN Manager not selling it decided to focus on hardware and integration, just as Novell started to give up making hardware and focus on systems. 3Com would now support Netware as well as 3&plus, which was a good thing as not a lot of people were buying 3&plus.
Within a year the company had given up having its own network OS - a wise move as the concept disappeared over the next decade.
Their decline wasn't helped by them laying off loads of employees in the early 2000s, losing valuable employees with knowledge all in the pursuit of increasing the share price.
I worked there for a while and they laid off all of the web interface experts, the product I was working on would have shipped with really awful inconsistent graphics had I not redrawn them myself (luckily I grew up with DPaint and pixel based graphic apps).
What really sunk 3Com. . .
Was Nvidia. Let's face it: were the Intel integrated NICs worth crap until just a few years ago? Not really. They were software-based and had poor performance. Nvidia released a GOOD integrated NIC, and that forced all the other vendors to step up and upgrade their own products. After that, there just was no real need for PCI NICs, except in servers, and often not even there. I predicted 3Com's demise several years ago, and I'm not surprised to see them go. I still have a few 3Com 3C905C-TX cards laying around. I picked them up 5-7 years ago for $25 each.
What will be the next company to go down the crapper? Well, Cisco is a long way off from folding, but their decline is already evident. Other companies like D-Link are starting to produce products that are, in many ways, just as good. Why pay twice as much for a Cisco managed switch, when you can get one just as good from a competitor? One thing you do not see them competing with yet, though, are the routers themselves. I see Cisco slowly retreating into a router-only company (except for a few high-end backbone products), and then eventually disappearing as the rest of the industry catches up and produces cheaper, more user-friendly products. It will probably take another decade or more, but their end will come. You just don't design products like that anymore, and Cisco is unwilling to change.
Cisco is doing well. 3Com obviously made mistakes.
Considering Cisco blazed a path through the enterprise that early on 3Com was setup and could've simply been handed due to their existence prior to any real enterprise networking it's almost a wonder they didn't become what Cisco is today.
And I agree with Joe, about their handling of Palm was atrocious.