Thursday, July 2, 2009

3Com spawns a startup legacy, 30 years later

By Rodney H. Brown

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Editor's Note: Know of other companies in New England that got their start from 3Com? Leave us a comment below.

Thirty years ago this week, MIT and Harvard University alum Bob Metcalfe took his idea for a less expensive and more open way to link computers — Ethernet — and founded 3Com Corp.

Despite being on the West Coast until it moved its headquarters to Marlborough in 2003, 3Com has found New England startups irresistible, gobbling them up at a regular rate over the years. After doing their time at the networking giant, many entrepreneurs — like an earlier generation of homegrown talent that began at Digital Equipment Corp. and continues innovating today — have spawned a second generation of networking and technology companies.

One of the most successful birthplaces for such companies was Southborough-based Chipcom, which was co-founded by Menachen Abraham, who helped sell the company to 3Com in 1995. Abraham then founded Prominet Corp. in 1996, which he turned around in two years with a sale to Lucent Technologies Inc. for more than $200 million.

Still thriving under the entrepreneur hat, Abraham in 2000 founded Mintera Corp. in Lowell. The company, which makes 40 gigabit-per-second optical transport technology, is now based in Acton, although Abraham left in 2005.

Also coming out of Chipcom was Paul Koning, a former Digital veteran who joined Chipcom near its height of popularity, when the company had about 800 employees. After the 3Com purchase, Koning joined a group that gave him his first taste of what it would be like to work at a startup: 3Com put Koning into a group of engineers from another acquisition, an Israeli company called NiceCom, that was working on early ATM switching systems.

“So that crowd, maybe 30 to 50 people in the office, certainly had a small startup culture, and that rubbed off,” Koning said. “It showed up in things like fast action and the ability to make quick decisions.”

Koning took that lesson to the company he co-founded in 2001, EqualLogic Inc., a Nashua, N.H.-based maker of storage networking hardware and software, which Dell Inc. bought in 2007 for $1.4 billion.

Koning is content to remain at a tech giant again, as senior technical staff at Dell, doing essentially what he did as CTO of EqualLogic.

Taking a different path than the acquisition-startup route was Ron Sege, who now holds the president and COO roles at 3Com. From 1988 to 1998, Sege was a senior vice president at 3Com, and it was Metcalfe’s ideas and an IBM PC that brought him there.

“I was working for a company called ROLM that got bought by IBM, and I used my employee discount to buy a personal computer,” Sege said. “I thought Metcalfe’s view of low-cost, open standard was the way to go” when it came to linking his computer to others. Other networking technologies at the time included IBM’s “token ring” and Vines from Banyan Systems Inc. of Westborough.

Sege left at 3Com’s height and eventually was brought on board at Ellacoya Networks Inc. as CEO, at a time when the New Hampshire company realized its entire business model had been rendered ineffective.

“I joined a company that was just about to ship an enormous, all-encompassing box to CLECs (competitive local exchange carriers), and within six months that market completely imploded,” Sege said. “We were able to take a core group of employees and take the core technology and identify a problem that a solvent group of customers had.”

Ellacoya focused on deep packet inspection and was eventually sold to Lexington-based Arbor Networks Inc. in January 2008.

In August of last year, Sege returned to 3Com, now serving as president and COO. He says that a return to its original  low-cost, open philosophy is part of what attracted him back.

“I joined almost exactly a year ago, and it really was because I saw that the company was moving back to its roots.”

Another successful child of 3Com is Christopher Lawler, founder of Redstone Communications Inc., which was sold to Siemens AG in 1997 for $450 million. Lawler came to 3Com from its purchase in 1993 of Synernetics Inc.

One entrepreneur in the area that twice narrowly missed being a 3Com employee through its local acquisitions is Fanny Mlinarsky, a Mass High Tech Women to Watch Honoree in 2004 and founder of Azimuth Systems Inc. in 2001 and her latest endeavor, octoScope in Marlborough.

Mlinarksy worked for Chipcom as an engineering section manager, then as a principal engineer at Northborough-based Star-Tek (bought by 3Com in 1993).

Because of her narrow brushes with 3Com employment and her connection to many co-workers who did wind up there, Mlinarksy has followed 3Com throughout the years.

“Clearly they were at the forefront of the early days of local-area networking, along with Cisco,” Mlinarsky said. “3Com is making a comeback.”

3Com’s Bay State buys

A crowd of 3Com’s kids
A collection of companies whose roots were seeded at 3Com

Source: 3Com and MHT Research
 

Know of other companies in New England that got their start from 3Com? Leave us a comment or drop us a line at newsroom@masshightech.com.