Data Communications - Alliances Among Equipment Vendors on the Rise
October 08, 2004
Equipment vendors are increasingly joining forces to gain a competitive edge in the communications equipment market. 3Com and Siemens recently entered into a partnership seeking to provide comprehensive service to enterprise clients by capitalizing on their respective strengths in Ethernet and telecommunications. In a similar case, Lucent forged an alliance with Riverstone to fill out its switch product line.
3Com plans to access Siemens' global support system through the partnership. Presently, 3Com's competencies lay in the IP phone, network security, and data network segments, while Siemens boasts a global operation with approximately 34,000 employees in 44 countries. This new alliance means that local service and distribution networks will be integrated, with plans to expand cooperation to cover customer technical support and to mine the future potential of the enterprise market.
The alliance is said to point to 3Com's intention to compete for the favor of large-scale enterprise clients. 3Com hopes to benefit from Siemens' networking and service experience, while Siemens hopes the partnership will allow it to expand into the North American market. Although Siemens' enterprise services unit posted revenue of US$6.1 billion in 2003, performance in the Asian and European markets far outshone that of North America. North America, conveniently, is 3Com's major stronghold.
Some speculate that an expanded alliance between Siemens, 3Com, and Huawei could materialize in the future. Evidence for such speculation is based on the close relationship between 3Com and Huawei, as well as the fact that Siemens has worked with Huawei in the past, and has plans to sell Huawei routers and switches alongside their own equipment.
Lucent will begin selling Riverstone's Ethernet switches and routers as part of its recent alliance, in an effort to upgrade its clients from traditional circuit networks to IP networks. This is actually the second time Lucent has entered into a partnership. In 2003, Lucent joined with Juniper to sell core-network routing equipment and develop new products. The venture between Riverstone and Lucent is not expected to impact the relationship between Lucent and Juniper, as the Riverstone/Lucent venture is confined to switches and routers for edge networks.