3Com has bought US Robotics (USR) in a $6.6 billion stock swap, raising concerns that its distributor numbers could swell to an unlucky 13.
The deal is the largest ever in the history of the networking industry and will give 3Com a turnover of $5 billion and more than 12,000 employees in 130 countries. But it will also make 3Com kit available to USR and vice versa, increasing the number of 3Com distributors to 13 from an already swollen 10.
Bob Cushing, 3Com European marketing director, confirmed that USR is to be rebranded under the 3Com name and that distribution partners will have access to product from both vendors. ?It is simple for us to put product through each others channels,? he said.
?This will give 3Com access to telcos and the retail and consumer markets and will open up the enterprise market for USR.?
But Neil Ledger, MD at 3Com distributor Data Connectivity, said: ?It is good news for 3Com in giving them access to more consumer markets, but things will be very confusing for the channel until a proper strategy is defined and that could take around six months.?
Most 3Com dealers are looking forward to gaining access to USR product, but agreed there has to be some channel consolidation if the deal is to be a success.
Troy Leacock, marketing director at Hungerford systems integrator Networks UK, said: ?I would hate to see access given willy-nilly. Retail is not a threat in terms of margin erosion, as it would be impossible to sell at slimmer margins on volume products. What does worry me is more systems resellers having access to high-end kit. 3Com will have to be tough.?
The 3Com board will be made up of seven 3Com directors and three USR directors, with Eric Benhamou remaining as 3Com chairman and CEO. Casey Cowell, chairman and CEO of USR, will join the 3Com board as vice chairman, along with USR president and COO John McCartney.
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