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3Com, Siemens in $100 million venture

The networking firm and Siemens, the systems giant, are betting $100 million they can jumpstart use of internal corporate layouts for delivering voice, video, and data communications.

Networking firm 3Com and systems giant Siemens are betting $100 million they can jumpstart use of internal corporate layouts for delivering voice, video, and data communications.

The duo announced a joint venture today--including the initial joint investment--combining 3Com's expertise in providing networking equipment for businesses and Siemens' rich heritage in delivering computer voice systems. The result will be a set of computer telephony products targeted at local corporate networks, often called LANs.

Operation of the joint venture will start early next year, according to the companies, with specific products to be released soon after.

3Com and Siemens originally announced their intentions to partner with regard to technologies for voice, video, and data convergence last year.

The companies are hoping to ride an expected wave that will likely result in major changes in what types of traffic traverse a data-based scheme. Increasingly, corporations, carriers, and service providers are expected to lean on the data portions of their networks for voice and video services, resulting in a large market for upgrades and build-outs.

"Convergence is a very fundamental shift in the industry--This is an inevitable evolution for your networks," said Eric Benhamou, chief executive at 3Com, at a company user conference yesterday.

The LAN telephony niche represents a market distinct from various voice-over-IP and convergence strategies floated by telecommunications firms and equipment providers, targeted at the public Internet. 3Com, Siemens, and Newbridge Networks have already struck a deal focused on that piece of the pie.

Products expected to come out the venture include multimedia exchanges, or gateways, for voice, video, and data traffic and phones and adapters based on Ethernet networking technology, according to the companies. Also likely to play a role in the sales of these tools are 3Com's switching devices and accompanying network management software applications.

The products will be sold under the Siemens HiNet, and 3Com SuperStack II and CoreBuilder brand names.

The gateways will essentially act much like current public branch exchange telecommunications devices, or PBXs--the equipment used to connect corporations to phone services. Those PBXs were not built to handle data traffic--a fact 3Com and Siemens hope will spur sales of the gateway technology.

Corporations that implement data-based computer telephony will likely see large cost savings on their phone bill, given the use of a data network to transmit voice calls rather than the phone network of a long distance provider.

The 3Com/Siemens venture will be headquartered in the United States, and will operate with its own staff and management. Initial employees will include more than 200 engineers from the parent firms.