RealTime IT News

3Com Widens Reach With EDS Deal

In a deal promising increased competition between networkers, EDS now offers enterprise customers equipment from 3Com as well as Cisco .

The IT service provider will sell 3Com switches, routers and voice over Internet protocol gear to financial and retail companies in United States and the United Kingdom, with worldwide coverage and additional industry segments to follow.

EDS will still offer Cisco gear, but 3Com's inclusion is an important step as it shifts focus from telecom carriers to large corporations and government agencies.

"This is huge for us," 3Com spokeswoman Karin Bakis told internetnews.com. "It will really give 3com entree into the Fortune 500."

The Marlborough, Mass., company is talking with other IT services firms about similar deals, but declined to identify them.

EDS, which faces stiff competition from Hewlett-Packard's and IBM's services arms, added 3Com offerings to give customers more options, especially in the low and middle ranges of the enterprise category.

The company doesn't expect the move to cause friction with Cisco, one of six of its highest-level partners.

"We don't consider this to be a cannibalization of our business with Cisco," EDS spokesman Mark Southland told internetnews.com. "While (Cisco) may lose a slight amount of market share within EDS business, the fact is that we are growing the overall market."

In March, 3Com sold parts of its CommWorks subsidiary to UTStarcom for $100 million, effectively adjusting focus from telecom carriers and to large corporations and government agencies.

Still, wresting market share from Cisco won't be easy. A survey released Tuesday by SG Cowen found 69 percent of users identified Cisco as their primary network vendor, up from 63 percent in May. But encouraging for 3Com is that the overall market appears to be on the verge of a network upgrade cycle, which could mean more orders for all sector companies.

Meanwhile, Cisco is not standing pat. The San Jose, Calif., market leader this morning said it expanded its U.S. alliance with AT&T to Europe, the Middle East and Africa.

In the new markets, the companies will align sales and marketing teams to deliver network services over Cisco equipment to enterprise and multinational companies, a spokeswoman said. Since February, cooperation between the two companies in the United States has contributed to dozens of deals.