Siemens and 3Com ditch converged networking venture

Siemens and 3Com have abandoned their attempt to set up a joint venture to build and sell converged networking products.

The partnership was announced in December last year, and was formed to develop a range of products to run voice, video and data over the LAN. The two companies had intended to sink more than $100m each into the project.

But the plans to create this new venture have now officially been called off, although 3Com insists that the two will continue to work together.

Magnus Melander, marketing manager for 3Com Europe, said: "We are still committed to this market and the relationship remains the same. It is just the legal framework that has changed."

Melander added that the market was growing even faster than expected, and that the company could not afford to spend time setting up the partnership at the expense of working on products themselves. He said that 3Com would be shipping products by year end.

In a video interview with Silicon.com in March, 3Com chief executive, Eric Benhamou, said: "It is hard to have the same level and depth of experience in both the data world and the voice world - in this particular case we've chosen to partner with Siemens."

Andy Mulholland, technical markets director at Cap Gemini, said: "One way to look at this is when the two companies started working together, Siemens probably saw data as an interesting side show to its core business, likewise 3Com saw voice services as an interesting add-on. They both now realise that converged networks are core to their businesses."

John Matthews, principal consultant at Ovum, said: "It is not a big surprise because the alliance hasn't had much life or vigour. But it is of vital importance to 3Com to have a credible voice partner, and equally for Siemens to have a data partner - this reduces credibility for both of them."

Siemens was unavailable for comment.