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Tech Industry

3Com names new CEO

R. Scott Murray takes the reins, will continue guiding 3Com back into market for high-end networking gear.

3Com on Friday named R. Scott Murray as its new CEO, as the company seeks to accelerate the pace of its turnaround and re-entry into the high-end networking gear market.

Murray, former CEO of supply chain management and hosted services provider Modus Media International, will assume his post immediately. He also will serve as 3Com's president and is expected to soon become chairman of the company's joint venture with China, Huawei-3Com.

Murray's appointment follows 3Com's announcement earlier this month that his predecessor as CEO, Bruce Claflin, would retire. Claflin, who served as 3Com CEO for five years and launched the company's re-entry into the high-end networking gear market, will remain a senior adviser to the board and to Murray for six months.

"We found Scott extremely well-suited to lead 3Com into the future," Eric Benhamou, 3Com's chairman, said in a statement. "His ability to drive operations, grow revenues and increase profitability will be critical in accelerating the execution of 3Com's strategy."

Before his work at Modus, Murray served as president and chief operating officer at Stream International, a customer relationship management services company.

At least one analyst had a cautious outlook on what the new CEO will bring to the company.

"I don't think investors know too much about his background. He was a chief financial officer at one job and has good operational metrics, but his background in networking is not" as deep, said Mark Sue, an analyst at RBC Capital Markets. "We'll have to take a wait-and-see approach."

In addition to its re-entry into the high-end networking market, 3Com faces the challenge of keeping competitors at bay in the midtier and low-end networking markets, Sue noted.

And as it seeks to maintain this balance, the company is hoping to remain on track with its earlier stated goal of achieving profitability by February next year.

Shares of 3Com fell slightly, to $4.43, in early morning trading on Friday.

Over the past two years, the company's stock has underperformed the broader markets, falling 51 percent while the Nasdaq has climbed 15 percent.

The company not only has faced a challenge in regaining customers' trust--so much so that it won't quickly exit the high-end market again--but it continues to fall in the shadow of its arch-rival and industry behemouth Cisco. The company has also continued to try regaining its footing after its U.S. Robotics acquisition in 1997 and spin-off of its popular Palm device and operating system in 2000.