and telecommunications expert 3Com Corporation (NASDAQ: COMS) has purchased
a 40 person company specializing in Internet design and strategic consulting.
Details of the purchase of Interactive Web Concepts (IWC) of Mountain View,
California were not disclosed.
gets its foot into quite a few corporate doors. Comparing the booming E-commerce
business with its own 6.5% sales growth, 3Com may have felt that it was time
to step on the merry-go-round. IWC, which already boasts clients like Apple,
Hewlett-Packard and Inktomi (and 3Com), will certainly benefit from both the
financial backing and the sales contacts it gets from 3Com.
says that the acquisition will enhance "the company's capabilities to provide
total, turnkey e-business solutions for customers worldwide." We doubt that
IWC will become simply an add-on service that 3Com can offer to its customers.
Rather, we expect to see 3Com using IWC's design and consulting services both
for their own revenue-generating potential and for IWC's ability to specify
3Com products and services as part of the total solution it offers its clients.
isn't necessary to second-guess 3Com to wonder how much synergy this arrangement
will really offer, however. Neither the stock price nor analyst ratings have
been particularly positive about this acquisition, nor is it easy to see that
there is a lot of technical logic pairing a network solutions company with a
design shop. And, while more resources - both cash and the smarts on 3Com's
management team - will be an undoubted benefit to IWC, there is always reason
to be concerned that attempting to grow an essentially creative business will
hurt more than help it. We do not expect any serious shakeup in either 3Com's
market or IWC's.
Ignore it. Make the best networking decision you can, which might well be 3Com.
Make the best design firm decision that you can, which might well be IWC. If
one of those is a member of this new "partnership" then try to get substantial
price benefits for signing with the other. If such are not being offered, then
you will lose nothing by ignoring the relationship between 3Com and IWC and
going with the companies you chose as best meeting your needs.