3Com Accelerates CommWorks Internet Telephony Solutions With Acquisition of LANSource, Leading Fax-Over-IP Vendor.

SANTA CLARA, Calif.--(BUSINESS WIRE)--Dec. 7, 1999--

Acquires Canadian Company, Stepping Up Efforts To Target

Multi-Billion Dollar Markets, Adding Technology and Expertise for

Advanced Unified Messaging Solutions

Strengthening its position in the growing market for enhanced Internet Protocol (IP) based voice and data services, 3Com Corporation (Nasdaq:COMS) today announced that it has signed a definitive agreement to acquire LANSource Technologies, Inc., a leading vendor of data- and fax-over-IP software applications. The acquisition targets the worldwide IP fax services market, projected to grow from $80 million (USD) in 1999 to $2 billion by 2002 (Source: International Data Corp.). The transaction also provides 3Com with technology and expertise to accelerate its development of fully integrated unified messaging solutions for the IP telephony market, estimated to grow from $272 million (USD) this year to $5.5 billion in 2002 (Source: Ovum).

The transaction is valued at approximately $26 million (USD) and will be accounted for as a purchase. The charge for in-process technology associated with the acquisition is not material and will be included in research and development expenses in the third quarter of fiscal 2000. The acquisition is not expected to materially impact 3Com's fiscal 2000 results. The companies expect to complete the transaction later this month.

"LANSource has distinguished itself as the top innovator in its field," said Irfan Ali, Senior Vice President and General Manager, 3Com Carrier Systems. "They are a strategic acquisition that will enhance 3Com's competitive position in the lucrative fax-over-IP market and help us develop a new range of enhanced IP telephony services as part of our CommWorks IP telephony platform. LANSource's capabilities enrich our product portfolio and demonstrate our commitment to deliver the industry's best enhanced services platform to network service providers."

3Com has had a co-marketing relationship with LANSource since 1997. The two companies have co-developed carrier class fax-over-IP and integrated fax-email messaging solutions based on 3Com's Total Control(R) multiservice access platform and LANSource Faxport Virtual Networking (VFN) software. The acquisition furthers 3Com's strategy to supply Internet service providers and telecommunication carriers with platforms to deploy enhanced services (such as Internet faxing, pre-paid calling, Internet call waiting, unified messaging and integrated voice response systems) for consumers and businesses of all sizes. LANSource applications will be an integral part of 3Com's CommWorks carrier IP telephony platform.

"3Com has proven to be a great ally in the lab and in the field," said Marc Bisnaire, President of LANSource. "The acquisition will enable us to leverage the enormous resources and expertise that 3Com offers to enhance our market presence and accelerate development of leading edge network applications." After the acquisition is completed, Mr. Bisnaire will remain at 3Com, reporting to 3Com Carrier Systems Senior Vice President, Mr. Ali.

Innovative Applications for the Fax-over-IP Market

3Com's Total Control systems running LANSource's FAXport VFN software offers carriers and Internet service providers (ISPs) a complete platform for delivering cost-effective fax services to corporate customers of all sizes. Service providers are expected to have provided 640 million minutes of fax-over-IP services worldwide this year, with growth expected to reach 7.8 billion minutes in 2002 (Source: International Data Corp.). The combined Total Control FAXport VFN solution enables PC-to-fax, Web-to-fax, LAN-based fax-to-fax, standard fax-to-fax and fax-to-email services.

Using service provider-based fax services, a business can eliminate its fax machines and LAN-based fax servers, reducing hardware, maintenance and long distance fax charges. Analysts expect that converged fax-data networks will result in significant cost savings for businesses.

Envisioning Unified Messaging Applications for Business Users

The LANSource acquisition is expected to form an integral part of 3Com's CommWorks platform for unified messaging applications. The platform enables the deployment of enhanced IP-based telephony services -- now on trial at carriers and ISPs worldwide. 3Com's vision for unified messaging will enable people to use their personal and handheld computers to access voice, data and multimedia-based messages from a universal mailbox over fixed, dial-up and wireless communications.

For example, this would allow a business traveler to use a wireless phone to receive a message that an important fax was received and is being held in her fax mailbox, with choices to review the fax or direct it to be printed at the hotel concierge desk. Likewise, a home office user could have a personal phone number for voice and fax messaging. The user could set a personal profile for his messaging mailbox to link it to his email, paging service, wireless microbrowser-based phone, a web mailbox and more. This mailbox could then be accessed by multiple methods providing him the ultimate in flexibility for personal messaging.

As a first step toward this vision of unified messaging, 3Com and LANSource have already jointly developed and demonstrated integrated fax-email messaging (and related store-and-forward capabilities) for the CommWorks platform and the Total Control multiservice access platform. Fax-over-IP with a unified fax-email inbox enables service providers to deploy IP-based enhanced fax services such as desktop faxing, low-cost fax delivery, fax outsourcing, fax broadcast, fax clearinghouse and web fax. These 3Com based enhanced IP services represent new ways for service providers to differentiate themselves in today's competitive global marketplace. Making these services widespread is also a goal of 3Com's e-Networks strategy for enterprises and consumers.

About 3Com Corporation

With over 300 million customer connections worldwide, 3Com Corporation connects more people and organizations to information and each other in more innovative, simple and reliable ways than any other networking company. 3Com delivers e-Networking solutions through information access products and network systems to enterprises, small businesses, consumers, carriers and network service providers. 3Com -- More connected.(TM) For further information, visit 3Com's World Wide Web site at www.3com.com or the press site at www.3com.com/pressbox.

3Com, CommWorks and Total Control are registered trademarks and More connected. is a trademark of 3Com Corporation. All other company and product names may be trademarks of the respective companies with which they are associated.

This press release contains "forward-looking statements" (as defined under the federal securities laws) regarding the prospects for the fax-over-IP and integrated messaging markets, 3Com's development and introduction of new products including the Commworks IP telephony products, and LANWorks' expected contribution to 3Com's product development and competitiveness. The effectiveness of 3Com's ability to rapidly and successfully develop and introduce new products and technologies, to integrate LANWorks' technology and operations, and achieve market success, and therefore 3Com's actual operating results, may differ materially and adversely from those discussed in this press release.

Factors that may cause such a difference include, without limitation, risks associated with development of complex and inter-dependant communications technologies, risks regarding market acceptance, technical challenges, product announcements and introductions by competitors, the uncertainty of demand for products in a new and undefined market, and the risks and difficulties ordinarily attendant to integrating dispersed businesses. For additional information about factors that could affect the 3Com's business, see the reports 3Com has filed with the United States Securities and Exchange Commission.