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Eric Benhamou & the Turnaround of 3Com (Part 5)

Posted on Friday, Aug 24th 2007

Here Eric details several significant happenings. Not only does he discuss the development of Bridge and the IPO, but also the birth of networking as a recognized market, as well as the merger with 3Com.

SM: Where you running Bridge during the IPO? EB: I was not the CEO, but I was one of the top three executives.

SM: The top three were all founders? EB: Yes, the founding team was running the company, and the engineering areas were mine as that was my background. At the time we had about 100 people.

SM: That was great for your very first venture … going public. EB: Yes, absolutely. In retrospect, it was a good time because we were able to ride a new market with perfect timing. Ungermann-Bass was founded perhaps a tad too early.

SM: You think timing was better with Bridge? EB: Yes, because we could look at the architectural choices Ungermann-Bass had made and we knew we could do better. This was right at the time when microprocessors where transitioning from 8 bits to 16 bits. They chose 8 bits, we chose 16 which turned out so much better.

It turns out that a couple of years later, even though we were doing quite well as a public company, we became concerned that this market was starting to be big enough to attract serious players. Up until then it was just a few startups, but we began encountering substantial companies like Burroughs, Univac, and so on … even Prime Computers and Data General. The line was fairly blurred between computing and networking.

SM: Networking as a field did not exist earlier, so this is essentially the birth. EB: No, it did not exist. Most people looked at it as a peripheral activity to computing, so anyone who was building computers could legitimately expect to be drawn into networking. We had an advantage however. We were not peddling any type of computer. We were building an open infrastructure for networking. Customers could connect any computer they wanted to this. They were not married to any one type of system. This is significant because in those days it was fashionable to be proprietary. HP had their own technology; everyone had their own flavor of protocols, and we were Switzerland.

We offered TCP/IP or Xerox open standards. As a result we could create heterogeneous networks and keep freedom of choice for the customers. Everything worked out great except for one thing. At some point in the 1986-87 timeframe, our customers were telling us that they were buying these personal computers, and at first they were a toy but ultimately they were going to use PCs instead of terminals. This meant we had to start connecting PCs to our network. We sort of knew how to do that, but our background was with bigger systems like mainframes. There was one company that knew how to connect PCs to networks, and that was 3Com. So we figured these guys connect PCs, we connect mainframes, together we can connect anything that matters.

SM: How big was 3Com at the time? EB: At the time they were 40% or 50% bigger than us.

[to be continued]

[Part 4]
[Part 3]
[Part 2]
[Part 1]

This segment is part 5 in the series : Eric Benhamou & the Turnaround of 3Com
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