3Com looks to India for growth
Following news of its recent acquisition by Huawei Technologies and private equity company Bain Capital, 3Com says it is looking to emerging markets in Asia, namely India, to fuel its growth.
Speaking to ZDNet Asia in an interview on Monday, Jay Zager, 3Com's executive vice president and CFO, said the company expects its top line to grow annually by 12 percent over the next four fiscal years, moving from US$1.3 billion to US$2 billion eventually.
To that end, 3Com is looking to emerging markets to fuel its growth ambition. "Geographies like Europe and the United States are mature, so we expect to tap into areas of the world like India, Australia and the Middle East," said Zager.
The bulk of 3Com's investments will be directed at India which, he added, is its largest potential market in Asia. For starters, the company plans to hire sales and marketing staff.
"In order [for the acquisition] to make sense for Bain, the company has to grow. Currently, we have a small business presence in India, and it's an area we're interested to move into," said Zager.
Internal manpower issues are still being addressed as 3Com's joint venture with Huawei, H3C, gets fully integrated.
"We'll be joining 3Com and H3C's staff, and looking for duplicates in operations and IT. We have to be more efficient. We may see some layoffs as a result, but there won't be many. I expect people to get reshuffled [within the organization]," said Zager.
The sales teams of H3C and 3Com have already been integrated and both companies' research and development staff are the company's next focus.
3Com recently hired a vice president for the Asia-Pacific region, a country manager in India, and will be hiring a country manager for Taiwan, soon.
Last week, 3Com announced it would be acquired by private equity company Bain Capital and former joint-venture partner Huawei Technologies in a US$2.2 billion cash deal. The Bain-3Com deal is expected to be completed in the first quarter of 2008.
Zager said Huawei will play a "minority role" in the company's operations. Although reports have speculated that plans to spin-off 3Com's networking security arm, TippingPoint, may get waylaid by the acquisition, Zager said that TippingPoint's IPO should still be announced. "We presented an aggressive plan to Bain, and I expect Bain to continue with it and separate customers from 3Com," he said.