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Building SMB business

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Coming in second everywhere but Australia is just one of the challenges 3Com's vice-president and general manager for Asia-Pacific, Peter Chai, faces. He recently spoke to ARN about the vendor's plans to sharpen its local market presence and its SMB product roadmap.

What does your role entail?

I cover most Asia-Pacific countries, expect for China and Japan, which are managed by our subsidiary, H3C. I do sales, marketing and make sure our services side is well done. We have clear objects and goals, which is what I enjoy most about my role at 3Com. It has its challenges, mainly around executing a go-to market strategy. We have spent a lot of time strategizing and making sure that not just the country manager, but everyone else understands where our target and focus lies in the market. The other thing is getting key employees and keeping staff well motivated.

Where does 3Com currently stand in the market?

In terms of market share and looking at the whole Asia-Pacific, 3Com holds second spot. This is primarily driven by our market share in China - through H3C we have more than 30 per cent market share in that country. We have reasonable market share in most other countries, but Australia is on the low side. We still have a lot of work to do and my mission for Australia is to really focus on the segments we are successful in and pour resources into servicing those customers on the enterprise side.

Then on the SMB side, we will work very closely with resellers and distributors to make sure we can get our message out to those customers. In most countries, SMBs represent about 98 per cent of businesses. In the large enterprise space, most of our customer base is made up of the government, public sector, education, and healthcare.

What does 3Com define as SMB?

We use the industry standard definition, which is up to 100 employees. We have products that target both the enterprise and SMB segments across switching and routing, wireless, IP telephony and intrusion prevention systems (IPS). We position ourselves in the SMB market as really enterprise class products but with SMB affordability.

How do you plan to drive local take-up?

In Australia, our focus on the large enterprise side is mainly on government and education. Our biggest customer is the Department of Education and Training in Queensland, which uses 3Com routing and switching. But on the SMB side, we are very broad based and not necessarily vertically focused. We are going to do a lot of user and direct reseller marketing around communicating what we do, and what solutions we have developed for particular channels.

Which markets have been the highest adopters of 3Com technology?

I think early adopters for our products are usually in the mid-market. Currently, the biggest selling products are our gigabit switches and wireless products. Our unified switches are specifically targeted at 50-100 employees. Government sectors are not usually early adopters.

What are some of the trends you are seeing in the market?

We will start to see wireless take priority over cabling because there are a lot of costs associated with cabling. There has been plenty of discussion about whether wireless is secure, but our own customer studies have told us that security has not been such a big concern when it comes to wireless because not everybody is a hacker.

What can channel partners expect to see from 3Com this year?

They are going to see more enablement activities around training in terms of sales and hands-on certification. Our partners care about three things: bringing them business, giving them more margin and supporting them through training initiatives, which is where we are going to place our focus. There is going to be a lot of marketing material including joint marketing programs and lead generation for partners. In terms of product, we have a comprehensive range and our challenge is to communicate that, which we haven't done a very good job of.

How big is your channel locally?

In Australia, in the last couple of years, we have built up to a couple of thousand channel partners, but on a day-to-day basis, we deal with about 20 active partners. For example, we work with ASI Solutions in Sydney.

What does 3Com's product roadmap look like?

We are planning to launch our Asterisk open source IP telephony solutions in Australia in April. They are available globally and with IP telephony, we think we are really in a good position to push that into the SMB market. Australia is a very mature market and I think that product segment will accelerate in terms of adoption, especially if we can take full advantage of its SIP trunking functionality. We are also trying to find a suitable telco or service provider in Australia. That I think will really make a difference to 3Com users because the infrastructure for IP-based networking is a lot lower than traditional telco networking.

How does 3Com differentiate itself from the competition?

Our go-to-market approach is really based around not trying to do everything for everyone. On the SMB side we are really trying to provide a good marketing mix in terms of product sets and pricing.


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