3Com Partners with Leading India IT Outsourcing Firm

Nov.30.09 | About: 3Com Corporation (COMS)

Networking major 3Com Corporation (COMS) declared that it has partnered with India’s leading IT services, business solutions and outsourcing company Tata Consultancy Services to successfully conduct the Andhra Pradesh State Wide Area Network ((APSWAN)) project in India. As per this agreement, 3Com will provide enterprise switching, routing and security solutions for the prestigious project that will connect 23 district offices in the state to increase efficiency in government operations.

The government of Andhra Pradesh in India selected TCS for the country’s largest State Wide Area Network (SWAN) project on a five-year Build, Own, Operate and Transfer (BOOT) model. This network infrastructure will help the state government to facilitate various citizen service programs to boost Government to Government ((G2G)) and Government to Citizen ((G2C)) efficiencies with the intention of enhancing the e-governance platform. 3Com will develop applications encompassing transport, healthcare, education and municipality services, which will be operational on the e-governance network backbone, scheduled to be rolled out within 12 months.

The company was recently in the news as Hewlett Packard Company (NYSE:HPQ) announced its plans of taking over 3Com Corporation. The acquisition, valued at $2.7 billion, enables HP to challenge networking leader Cisco Systems Inc. (NASDAQ:CSCO) on its own turf. The benefit to 3Com will come through the utilization of HP’s global marketing and distribution network as well as the improved scale of operations.

This apart, the company has recently won two big deals. The first one of them is "Brazil's Airport Administration" deal, where 3Com and its H3C enterprise networking solutions will provide the network infrastructure for the network upgrade project of 11 main airports in Brazil. Under this project, 3Com will be upgrading the wired and wireless network of the Airport, in order to support the increasing traffic of passengers and employees.

3Com had another win at the South African government’s Social Security Agency (SASSA), wherein SASSA has opted for a distributed network of H3C and 3Com-branded solutions to run its vast social security grant system across the country. The deal, which is valued at $12 million, will help in the implementation of a national network for 600 branch offices around the country over the next three years.

So the company is winning new business deals at regular intervals. 3Com reported decent first quarter 2010 results, with EPS exceeding the Zacks Consensus Estimate, although revenue declined on a year-over-year basis. Within the Networking business, the China-based sales segment (89.2% of total revenue) had revenue of $152.0 million, an increase of 13.3% from the year-ago period. The company is trying hard to maintain its position in China, and eventually the company will capture a greater share of the Chinese networking market, which should prove beneficial for both 3Com and HP.