3Com Aggressively Expands Ethernet Market Share Leadership in Key LAN Market Sectors.

SANTA CLARA, Calif.--(BUSINESS WIRE)--Feb. 23, 1999--

Latest market analyst figures show 3Com's new generation of end-to-end 10/100/1000 Mbps enterprise solutions grabbing market share

from key competitors

Reaping the rewards of its new generation, end-to-end 10/100/1000 megabits per second (Mbps) solutions, 3Com Corporation (Nasdaq:COMS) has further extended its leadership in the Ethernet local area network (LAN) switching and hub market, according to fourth quarter 1998 reports from market analysts The Dell'Oro Group and Cahners In-Stat Group. The results also indicate that 3Com has strengthened its leadership in this growth market at the expense of its largest enterprise competitors, Cisco Systems and Nortel's Bay Networks subsidiary.

Today's news follows 3Com's February 12 announcement that it earned a leading 49 percent unit market share in the worldwide Ethernet network interface card (NIC) market for calendar year 1998 (Cahners In-Stat Group). Combining NIC market share with that of all other Ethernet products (LAN hubs, LAN switches and wide area routers with Ethernet ports) for 1998, 3Com remains the undisputed leader in overall Ethernet connectivity worldwide with a 35 percent share (Dell'Oro Group and Cahners In-Stat Group). This is three times the market share of Cisco, 3Com's closest competitor.

Last year, 3Com re-vamped its entire line of LAN solutions for small, medium and large enterprises with the largest new product development program in the company's history. This bold strategy, which encompassed desktop, workgroup and LAN core connectivity systems, has hit hard on other vendors. In the face of fierce price competition, 3Com has increased its market share leadership in the dynamic 100 Mbps LAN fixed Layer 2 stackable switching segment which has grown to US $520 million in Q4CY98 (Dell'Oro Group). 3Com's market share leadership in this 100 Mbps switching segment (based on port shipments) grew from 30.8 per cent to 33.8 per cent market share quarter-to-quarter, driving down second-placed Bay Networks to 23.4 per cent from 24.5 per cent share (Dell'Oro Group). According to Cahners In-Stat Group's Q4CY98 report, 3Com also retained its leadership position in total Gigabit Ethernet switching market with 18.51 per cent share.

Leadership in these key Ethernet LAN segments is based upon 3Com's next-generation SuperStack(R) II workgroup systems aimed at medium and large enterprises. The company's new, recently shipping large-scale CoreBuilder(R) systems, sold in conjunction with SuperStack II workgroup solutions, are also having a profound impact on 3Com's growing leadership in the enterprise markets. The combination of 3Com SuperStack II and CoreBuilder switches and EtherLink(R) NICs allow customers to build end-to-end networks that can support the approved IEEE standards for 802.1Q VLANs and 802.1p prioritization. Using these products, customers can lower their cost of ownership for existing applications while preparing their network for new applications. SuperStack II and CoreBuilder products scale from 10 to 100 to 1000 Mbps and deliver the performance required to support convergence.

"Last year we set out to deliver the most affordable, feature-rich solutions allowing our customers in both small to medium and large enterprise to build a flexible migration path to high-speed, fully switched networks." Commented Edgar Masri, senior vice president and general manager of 3Com's Enterprise Business Unit. "The latest market analyst figures show that we have achieved our objective. We've moved beyond price wars: while other vendors have tried to beat us on dollars per port, they have not been able to match our feature set that includes fully stackable, Gigabit and ATM ready solutions with support for new converged network applications. Our growing customer base is testament to our success."

In a segment particularly important for small to medium sized businesses, 3Com increased its market share in the mature 10 Mbps stackable switching sector to 29.9 per cent during Q4CY98 according to the Dell'Oro Group. The Dell'Oro figures also placed 3Com in leadership positions of 38 per cent and 57.5 per cent in shared Ethernet and 100 Mbps shared Fast Ethernet managed hubs, respectively, during Q4CY98. 3Com's strengths in the small business sector, based largely on increased demand for its award-winning OfficeConnect(R) solutions were highlighted by its top-ranking position in unmanaged Ethernet hubs during Q4CY98 with 28.2 per cent share and significant gains in the unmanaged Fast Ethernet hubs sector (Dell'Oro Group). 3Com's port shipments in this sector grew by an impressive 77 per cent over the quarter which resulted in market share leadership position of 25.2 per cent in Q4CY98, up from 22.2 per cent in Q3CY98 (Dell'Oro Group).

Also, in a statement issued yesterday, "3Com Achieves #1 Position in Routers in Small Business Market," the company announced another significant market share leadership achievement. Leading research firm, PC DATA of Reston, Virginia has named 3Com's award-winning OfficeConnect ISDN LAN Modem router as the number one selling ISDN router in US retail channels in 1998.

End-to-End Networking Solutions for Enterprises of All Sizes

3Com's market share leading solutions are based on the advanced features of its new, desktop-to-server, fully switched Ethernet solutions including: 3Com Fast EtherLink XL 10/100 PCI and Gigabit EtherLink Server network interface cards (NICs); SuperStack II switches providing desktop connections in large and medium enterprise networks as well as backbone connectivity for small to medium enterprise users; and CoreBuilder chassis-based switches for large network backbones and campus interconnections. By combining these LAN products with its PathBuilder(TM) and NETBuilder(R) WAN systems, 3Com has created a powerful, end-to-end enterprise solution that can be managed by Transcend(R) Enterprise Manager and other 3Com management and monitoring applications.

3Com's leading market share in the small business arena is based upon the OfficeConnect system and 3Com EtherLink NICs. Together these simply installed and managed products provide complete, cost-effective information access and resource sharing within an office and across Internet.

Through its full range of enterprise solutions and its business alliances with other market leading global vendors such as Microsoft, Siemens, Dell, Compaq, Gateway, Hewlett-Packard, IBM and others, 3Com is laying the foundation for converged networks that support voice/video/data communication over an IP-based fully switched network. These include fully switched networks, based on industry standards for policy-based network management, embedded intelligence and Web-based applications for network management and service level reporting.

About 3Com Corporation

With more than 200 million customers worldwide, 3Com Corporation connects more people to information in more ways than any other networking company. 3Com delivers innovative information access products and network system solutions to large, medium and small enterprises; carriers and network service providers; PC OEMs; and consumers. 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, SuperStack, CoreBuilder, NETBuilder, OfficeConnect, EtherLink and Transcend are registered trademarks and PathBuilder and More connected. are trademarks of 3Com Corporation and its subsidiaries. Other company and product names may be trademarks of the respective companies with which they are associated.