ALKHOBAR, 1 February 2005 — 3Com is a name not well known in the Saudi market and the company admits that’s no one’s fault but their own. Founded by the inventor of Ethernet technology, Bob Metcalfe, 3Com was incorporated in 1979. The 3 Cs in its name are denoted as Computer, Communications and Compatibility. 3Com bills itself as “a leading provider of innovative, practical and high-value voice and data networking products, services and solutions for enterprises of all sizes and public sector organizations.”
Two years after creating a direct presence in Saudi Arabia with an office in Riyadh’s Kingdom Tower, Wael Fakharany, Regional GM, Middle East and North Africa, 3Com, felt ready to sit down and discuss 3Com’s performance in the largest of the Gulf states.
“It took us a while to get to Saudi Arabia. A lot of players were in the Saudi market and we were running Saudi out of Dubai,” said Fakharany. “I took over the region in June 2002 and saw that this traveling salesman model wasn’t working in the Kingdom. We didn’t waste any time. In January 2003 we set up the office and in February we started to hire the team. We established a foreign investment company in Saudi Arabia and put a team in place from the local market. Riyadh was our starting point for the Saudi market. I have a team of six people there now — one Saudi and five other Arabs. Believe me to get from zero to six team members is a big challenge and a substantial investment. It took me seven or eight months and 15 flights to Riyadh to find the right talent.”
3Com’s entry into the Saudi market came at a time when the networking equipment maker was working hard to recover after the dotcom crash. Without a direct presence in the Kingdom, 3Com had lost out to rivals such as Cisco Systems. Its channel was in a shambles and potential customers weren’t even aware of the company’s offerings.
“The Saudi market wanted to know more about our products but all the channel partners were using 3Com basically just to deliver some nice infrastructure products,” Fakharany explained. “The channel was not proactively selling 3Com, plus we were not there either. It was our mistake. Bringing local talent and local knowledge from the market — people that have the networking and infrastructure tenders in their hearts and minds, brought a lot of value to the channel. We saw that the channel started to fix itself.”
He continued, “The channel is a two-way street. It’s like a marriage. If the channel is investing in your technology and they are certifying their engineers on your products, then they get the business first. In Saudi Arabia, we have a rep office. We are not doing direct sales although I want to emphasize that our legal structure in Saudi Arabia would allow us to invoice directly because we are a foreign investment company. Despite that, 100 percent of our business is through our two-tier channel model, even at the enterprise level. Believe me, if some customer walked into our Riyadh office with a bucketful of riyals, I would direct them to my channel because that’s where I want to invest. That’s 3Com worldwide. Hundred percent of our business is done through our channels.”
3Com will be counting on its channel to continue promoting the brand in the small and medium-sized business segment. The company is also moving forward into new areas. In March 2003, Shenzhen-based Huawei formed an alliance with 3Com to deliver a new line of networking equipment. 3Com is also moving forward with products that emphasize security, IP (Internet Protocol) telephony and wireless capabilities. In the last year 3Com introduced over 150 new products and in the coming year it hopes to continue the trend of rapidly bringing innovation to the SMB market while moving into the enterprise space.
At this time 3Com is driving ahead with its “blueprint” for its new wireless switch-based solutions. 3Com’s wireless switch blueprint is intended to map out the options available to its enterprise customers in building next-generation, converged wired and wireless networks.
3Com’s new blueprint is organized into three main areas — convergence, compatibility and comprehensiveness of products and services. Convergence consists of combining wired and wireless networking with voice and security. Compatibility is focused on interoperability with third party wired and wireless products by leveraging 3Com customer’s existing wireless access point investments, which enables a higher return on investment and product future-proofing. The comprehensiveness of products and services spans across a wide array, including centralized management, security and voice applications, virtual LAN and Power over Ethernet (PoE) technology.
In order to accelerate “time to market” with the delivery of key components that constitute 3Com’s wireless switch plans, 3Com is working with Trapeze Networks, an award-winning enterprise wireless LAN vendor. The next phase of 3Com’s wireless strategy consists of collaborating with Trapeze to leverage its wireless hardware and software portfolio. The future phases of the relationship include plans to join forces with Trapeze on integrating wireless functionality into 3Com’s wired products.
“3Com is a great company and we put the office in Riyadh to create awareness of that in the market and to educate the market,” Fakharany said. “Frankly, before we had a direct presence in Riyadh, people were badmouthing 3Com in the Kingdom. We are not a very large player but we were not getting our fair share of the business. Once we put the team in place it was amazing how attitudes began to change. And I’m talking in weeks. The Saudi market is willing to accept new technologies and new products once there is the confidence in the right people that would pitch the ideas to them. Initially we were very successful in the government sector. The Ministry of Health is one of our success stories. Then we started segmenting the market and segmenting our channel. We have four gold partners serving the Saudi market. These partners have the spare parts and certified engineers. They know our roadmap and our products. They can pitch ideas to customers in a similar manner to our 3Com team. They can create solutions for customer needs — not just sell products.”
According to Fakharany, 3Com is interested in providing the right infrastructure for organizations. When asked what that meant, he defined the right infrastructure as “empowering an organization and increasing their efficiency and productivity.” He stated that the company has no problem interfacing with networks that have a legacy of deployed products from competitors because of 3Com’s focus on interoperability. And Fakharany added that the core issue in the networking industry is no longer about products, it’s about creating network solutions that deliver.
“When we started out in the Saudi market we didn’t make a lot of marketing and advertising noise. We built the support infrastructure first,” he said. “I come from a background where you have to look after your customers very well. You have to make sure that you have the right talent and resources to serve them. At this point we can’t afford any mistakes with Saudi customers. Frustrated customers or customers with service issues are unacceptable. So it was necessary to build the support infrastructure and the training infrastructure. There has been a lot of demand on human resources development. Many engineers and technical people are interested in getting themselves certified and qualified. We are working right now with one of our largest system integrators to create a certified, accredited 3Com solution center in Saudi Arabia. Right now it’s necessary to fly to Dubai for training but we would like to have a local Saudi center.”
In the last year things have definitely been looking up for 3Com in the Kingdom. The company has a focus on the government, education and medical verticals and Fakharany claims they are making headway in these areas.
“We also have won some interesting deals in Jeddah,” he said. “The city is a trading hub especially for small and medium sized businesses with a lot of distribution and retail companies. We empowered them basically to automate their infrastructure using our technologies. In the Eastern Province we’ve had some interesting wins in SABIC and Saudi Aramco. While the team is still Riyadh-based, we are appointing resellers and distributors in the Eastern and Western provinces and it may be viable to open another office in one of those regions. I want to emphasize as well that if you look at it from 3Com’s global point of view, the company has seven focus areas across the world and the Middle East is the third largest focus area at the CEO level. Within the Middle East, Saudi Arabia is my number one focus area. The opportunities in the Saudi market are just incredible.”
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