Eric Benhamou has resigned as chief executive of network equipment giant 3Com.
Current president and chief operating officer Bruce Claflin will take
over as chief executive Jan. 1, 2001. Benhamou will remain as chairman. 3Com's board of directors approved the executive change at the company's shareholder's meeting today.
A 3Com spokesman said Benhamou decided to leave his post as CEO after 10 years of running the company.
"He made a 10-year commitment, and he fullfilled that commitment. It was
his idea to retire," a 3Com spokesman said. "Claflin has been very busy and
has played a key role in setting the strategic direction of the company.
This is the right time..."
3Com, once a major force in networking, has struggled financially the
past two years amid an exploding networking market. With Benhamou at the
helm, 3Com has faced stagnant revenue growth, while long-time rivals Cisco
Systems, Nortel Networks and emerging networking companies, such as
Juniper Networks, Foundry Networks and Extreme Networks, have seen their
Prior to joining 3Com in
1998, Claflin was a senior vice president of sales and marketing at
Digital and held senior management positions at IBM, including leading IBM's product management efforts for its PC business.
Benhamou, who had been grooming Claflin for the top job the past two years, said now was the perfect time for him to step down.
"Bruce is a very experienced, smart executive and he's up to the challenges" the company faces, Benhamou told CNET News.com. "We've just been through a strategic transformation...and it feels like the company is now on a growth path. Now's the best time to have a transition take place."
Analysts said today's move is a positive one for 3Com.
"There's been some baggage associated with Benhamou for some time,
because he was presiding over the last several years, and the company has
struggled," said Chase Hambrecht & Quist analyst Erik Suppiger.
Argus Research analyst David Toung believes Claflin has already left an
imprint on the company as second in command.
"Claflin is an operations-oriented person, and this may bring more focus
to the company," Toung said. "The fact that 3Com is exiting low-margin
businesses, I think Claflin had a lot to do with that."
After two years of flip-flopping its business
strategy, 3Com in March announced a major reorganization intended to
turn the company's fortune's around.
On Tuesday, 3Com reported
first-quarter sales that beat forecasts and a smaller-than-expected
loss. 3Com executives expect the company will be profitable early next year.
Over the past year, 3Com has spun off Palm, shed its slow-growing
analog modem business, and killed off its networking equipment arm for large businesses. The company now caters to small and midsized businesses
and consumers, two markets the company has historically dominated.
The company also is selling software and equipment to service providers
and focusing on emerging markets, such as high-speed modems, wireless and
home networking and Internet telephony.
As 3Com chairman, Benhamou will run a technology committee on the board of directors as well as run 3Com's public policy as it relates to technology issues, such as the Digital Divide, the division between the wealthier segment of society with access to technology and all its riches, and those left behind.
Toung, the analyst, said the new role fits Benhamou, who has long been
outspoken on the Digital Divide issue and how technology firms could
bridge the gap between the haves and have-nots.