Benhamou on Cisco - and setting the pace in networking

Networking industry veteran Eric Benhamou, still chairman of 3Com and a Silicon Valley VC, has spoken out on why, over the past six or seven years, Cisco went on to become a giant while others fell by the wayside.

After a wave of mid- to late-1990s consolidation in the computer networking industry - "Organisations just didn't want to buy a network one piece at a time" - four key suppliers were left: 3Com, Bay Networks, Cabletron and Cisco Systems.

"For several years these were the four companies but the pace of growth was torrid," said Benhamou, speaking at a European Technology Forum discussion in London. "But Bay could not sustain that growth and Cabletron had to be restructured [most notably morphing into Enterasys and Riverstone]."

3Com itself looked to other businesses, such as the PalmPilot PDA which was eventually spun off as Palm Computing, and retreated from the high-end networking world which Cisco came to dominate.

On that aggressive rival, Benhamou said: "Cisco had become a formidable selling machine. But it should not be remembered as a pioneer in the industry."

3Com's decision to retreat - though not to the extent of Cabletron and Bay, which was bought by Nortel in 1998 - was because "we could not take on Cisco directly - a frontal collision was going to be very much harder for 3Com than for them".

And in looking to other markets the handheld computer took off, even if sales of mobile phones dwarf those of the PDA.

In recent months the progeny of that spin-off - OS venture PalmSource and PDA-maker PalmOne - have seen interest in smart phones that combine a mobile phone with a PDA. However, Benhamou denies Palm Computing was formed without knowing it might end up as a communications company to rival Nokia and others.

"When we started Palm we thought it'd be only a matter of time before all devices were wireless," he said.

And an oft-rumoured tie up between PalmSource and smart phone OS venture Symbian was far from denied. "I wouldn't be surprised if in the future there is more and more opportunity for the companies to collaborate," he added.

Originally from France, Benhamou told silicon.com he will next weekend be running in the Paris marathon, though no mention was made of setting the pace in that particular race.