Two of Australia's top managing directors of networking firms go head to head on critical issues.

MCLEAN: 3Com seems to regularly change its business and product focus--enterprise, SMB, SOHO, etc. What is your current area of expertise?

CLARKE: 3Com produces networking technology that is high performance, great value for money, easy to configure and manage, and is backed by a great support system. Customers of all sizes tell me that these are exactly the attributes they are looking for in their networking technology.

We have a wide range of products covering hubs, switches, wireless, VoIP, and security which means that 3Com partners across Australia can offer solutions to organisations of all sizes. Because of this range, 3Com can offer an end-to-end solution, or a part of a solution.

I think the question around enterprise comes from the recent addition to the 3Com range of the 7700 chassis. This is a large switch and will suit the core needs of larger or enterprise organisations. Our customers have been asking us to deliver more in terms of solution breadth and more in terms of the scale and size of sites we can support. As a result 3Com has taken major strides to strengthen its large enterprise product portfolio.

A few weeks ago 3Com announced the introduction of a series of new enterprise solutions for larger businesses with many thousands of users. We believe enterprise networking customers are rethinking the way they buy networking products and are looking for more superior products, services, and value than they have had in the past.

CLARKE: I think it would be fair to say that Netgear primarily targets small business and SOHO customers. Has your company seen any increases in SME demand for more sophisticated networking infrastructure?

MCLEAN: Netgear targets individuals and businesses with up to 250 users, education and government, and the edge of larger enterprise networks. Our business is growing strongly with good demand for layer 2 and 3 switches, VPN, broadband, and wireless products.

MCLEAN: What will 3Com's recent stated global positioning regarding its focus on the enterprise market mean for the company's smaller business clients?

CLARKE: 3Com has a wide range of solutions, which enables 3Com partners to position appropriate technology for the customer. For example, 3Com has developed solutions, found in the OfficeConnect family of products, to address the needs of small businesses.

With our expertise in the small to medium office networking market and continued innovation, 3Com can make a credible claim to have a portfolio of solutions dedicated to small and medium business. Having a better-networked business is good for business and 3Com will continue to be an entry point for the connectivity needs of small and medium-sized businesses.

All customers are looking for high performance, strong features, value for money, and great support. 3Com delivers this across the board. However, the question implies that the size of an organisation is the key indicator of the technology they deploy, and I don't agree with that.

However, let's consider two businesses of 10 employees. If one is a design studio, they will be moving large files and would choose Gigabit to the desktop. Performance would be such a high priority that they may purchase technology that could be wrongly considered as "only for bigger companies". If the second company was an employment agency, their concern would be for security, and the switching solutions could be quite simple, but their firewalls would be of the highest standard.

CLARKE: As standards continue to develop, 3Com is committed to providing customers with secure, high-quality wireless LAN solutions. Is this a space that Netgear is looking to occupy?

MCLEAN: Netgear is currently the third-largest supplier of wireless LAN products in the world and we continue to see explosive growth in this business. Our internal goal is to be the second-largest supplier by year end. The requisite features of a high quality solution--speed, security, and manageability are core elements of the Netgear WLAN portfolio.

MCLEAN: It seems as though the market has taken up wireless now that issues of speed and security have been addressed. How do you view Intel's business decision to focus on 802.11b rather than 802.11g? Do you believe that 802.11a has relevance in the Australian market going forward?

CLARKE: The emergence of 802.11g, which operates as fast as 802.11a and is backwards compatible with 802.11b, is the next step in wireless LANs.

Wireless LANs have been flying into the home and small business sectors where sharing a broadband connection without cabling is compelling. Security has been addressed for some time, and will continue to get stronger and stronger, removing this as a barrier for any organisation. The 54Mb performance of 802.11g will be important for many organisations and be a further impetus for wireless LAN deployment.

On a grander scale, the broader impact of wireless LANS and the convergence of new devices is expected to blur the lines between wired and wireless even further to enable wireless carriers to provide these services. By 2005, the mainstream deployment for broad-scale, high-speed wireless data services is expected to surge because of the evolution of wireless LANS and new hybrid devices.

CLARKE: Netgear is a US-based private company with around 100 employees worldwide. With an ever changing technology environment how does Netgear manage to keep its research and development current?

MCLEAN: Netgear listed on NASDAQ (NTGR) in July of this year. The company had been previously a part of Bay Networks and Nortel Networks.

As a Silicon Valley company and one of the fastest growing companies in recent years Netgear works closely with major chip and technology providers enabling us to innovate technologies such as Gigabit Ethernet over copper wires, and bring dual-band and tri-band WLAN to market more quickly than our competitors.

MCLEAN: Is 3Com's product strategy based on being first with new technologies or does it prefer to wait until these technologies are tested in the market and follow up with second-generation offerings?

CLARKE: During the past two decades, 3Com's team of inventors and engineers has earned 911 US patents, with approximately 1000 additional patents pending. Last year 3Com ranked 76th in total US patents secured, well ahead of major networking competitors. Based on this intellectual property portfolio, 3Com has created generations of products that are consistent market share leaders. Today, as in the past, 3Com is committed to developing new levels of innovation and delivering new products that deliver practical solutions to our customers.

CLARKE: Like 3Com, Netgear is very much a channel-centric organisation. What do you see happening in the channel for the range of networking products sold by Netgear?

MCLEAN: The channel environment is very exciting. Netgear products are only available through the channel and we continue to work closely with our partners, providing them with a hardware and support infrastructure that enables them to in turn offer their customers best-of-breed support and solutions. With the expansion of our product portfolio to include more sophisticated products we are likewise expanding our channel to include more specialist, value-added partners.

MCLEAN: How does 3Com's R&D and manufacturing model support its ability to respond quickly to changes in customer demands and opportunities offered by new technologies?

CLARKE: Ensuring the delivery of highly innovative, quality products that translate into better and more practical solutions for our customers at a competitive price is the underlying strategy of 3Com's R&D and manufacturing model. 3Com recognises intellectual property as one of its most strategic assets. In 2002 3Com invested more than US$285 million in research and development, representing 19 percent of revenues. 3Com continues to aggressively obtain value from its patent portfolio through creative licensing programs and partnerships. This continuous investment has recently led to several breakthrough solutions for 3Com in a number of categories including LAN switching, security, networked telephony and wireless. The recently announced agreement to form a joint venture with Huawei Technologies of China will complement and enhance 3Com's leadership position in stackable products by providing 3Com with modular layer 2 and 3, 10/100/1000 MB switches. The JV and Huawei will also provide 3Com a full line of enterprise routers.

The creation of the JV will enable 3Com to deliver a broad line of innovative, feature-rich products and solutions. In addition, the skilled engineering team in China will support a lower total cost of ownership. 3Com and Huawei have a combined intellectual property portfolio of more than 4000 patents and applications, over 1000 registered trademarks and many important product and component designs. Over 1000 Huawei employees are expected to join the JV, and more than half have technical expertise.

CLARKE: What's Netgear's prediction on the take-up of Power over Ethernet in Australia?

MCLEAN: As IP telephony becomes more mainstream and cost effective for businesses, Power over Ethernet will become more important. This technology will also be particularly applicable in the wireless LAN space.

MCLEAN: Like many traditional IT vendors, 3Com has been impacted by the downturn in the IT industry, how has this affected 3Com's ability to service the market?

CLARKE: Despite the downturn in the industry, 3Com Australia has actually bolstered its current sales team as part of the company's ongoing commitment to the Australian marketplace.

We see the market in Australia, particularly at the enterprise level, as being poised for growth and our recent appointment of more direct touch sales representatives is helping drive demand and also supporting our channel in a way that is gaining more market share for 3Com. 3Com is a totally channel-centric organisation and we work with our channel partners to provide solutions to our customers.

We are seeing enormous interest in our key technology segments of Gigabit Ethernet, voice, security, and wireless. Our unique "pay as you grow" XRN core switch technology introduced into Australia in December last year and which provides customers with the ability to add network capacity as their business grows has created enormous interest in the Australian market. There is no doubt that the IP telephony market is also in rapid growth in Australia and 3Com is right at the centre of this growth. Going forward, everything we do at 3Com, including the organisation we are creating is supporting the vision of being a leading networking company of the future.

CLARKE: What was the last and most useful piece of technology you have purchased for yourself?

MCLEAN: A Netgear wireless broadband router for use at home. It is fantastic (though it does mean I'm inclined to take my work home even more!).

MCLEAN: What do you do when you are leaving for a business trip and your mobile phone and mobile PC fail?

CLARKE: I had to smile at this question because it made me think about how I am reliant on these two devices. I can access my e-mail through other devices, but my mobile phone would provide a challenge. The good news is that I spend most of my business trips meeting partners and customers, which would not be interrupted.

About Netgear NetGear designs, develops, and markets networking products that address the specific needs of businesses and home users.

About 3Com 3Com provides networking systems and services that connect people and organisations to information across LANs and WANs, including the Internet.