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Eric Benhamou & the Turnaround of 3Com (Part 12)

Posted on Friday, Aug 31st 2007

SM: Is this when you began to close the gap on Cisco? EB: There was one play that we used which enabled us to close in on Cisco, and we called it Boundary Routing.

Cisco was driven to more complex solutions than us. They positioned routing as something of a magic art, very complicated and it was disempowering for the customer. Their positioning was “Mr. Customer, this is complex stuff. We are going to take care of it for you but, trust us, you need this big expensive box.” This was almost a play from the mainframe days.

We had the opposite view – networking can easily be complicated, but you can contain complexities if you have a sound architecture. You should have products which are as simple as possible so you can keep control of your network. Networking does not have to be that complicated.

It was more of a mass appeal as opposed to a black art. We had credibility there because we had the best network PC connections in the world, we were by far the market share leaders and our products were plug and play. The average network users did not really know what we did in the bowels of the network, they only knew they had a 3Com card inside of their PC and this is what gave them access to the network, and the card never failed. It was super easy to install, and this was essentially our external face to the customers.

This gave us great positioning, and we then invented something which really gave us an edge called Boundary Routing. Imagine a large network, such as a bank, with head quarters in one place and branches throughout the country. You create a network throughout the bank, where the typical routers are inside the branches. These routers are at the edge of the network. In the core of the network you have complexity. Packets have multiple paths to choose from, the routers have a lot of real time decisions to make.

When you are at the edge of the network, that router does not have a lot of choices. The router sees all of the packets which go by on the local branch, and any packet whose address is not local has to go to the center. We called this a Boundary Router. It was very simple and it did not have to have all of the complex Cisco protocols, just a simple boundary router and it is 1/10th the price of a regular router.

This was very threatening to Cisco, even these days I speak to …. Well, Matt Howard is now a partner at Northwest Venture Partners, at the time he was product marketing director for routers at Cisco. He was scared, because they had no answer to this. Their whole business was selling expensive routers everywhere, and if all of a sudden the edge routers became simple and cheap they would lose tremendous edge. This happened in 1994 / 1995, and it gave us huge acceleration. In 1996 / 1997 the field of play was just Cisco and 3Com.

[to be continued]

[Part 11]
[Part 10]
[Part 9]
[Part 8]
[Part 7]
[Part 6]
[Part 5]
[Part 4]
[Part 3]
[Part 2]
[Part 1]

This segment is part 12 in the series : Eric Benhamou & the Turnaround of 3Com
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