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Telecommunications equipment industry

3Com Acquires LANSource Technologies to Target Multi-Billion Dollar Markets

Strategic Insights

— 2 min read

3Com Corporation, a leading provider of networking solutions, has signed a definitive agreement to acquire LANSource Technologies, Inc., a leading vendor of data- and fax-over-IP software applications. The acquisition is designed to strengthen 3Com's position in the growing market for enhanced Internet Protocol (IP) based voice and data services, and to accelerate its development of fully integrated unified messaging solutions for the IP telephony market.

Key Takeaways:

  • 3Com has acquired LANSource Technologies, a leading vendor of data- and fax-over-IP software applications, to target the multi-billion dollar IP fax services market and accelerate its development of fully integrated unified messaging solutions.
  • The acquisition is valued at approximately $26 million and will be accounted for as a purchase, with the charge for in-process technology associated with the acquisition to be included in research and development expenses in the third quarter of fiscal 2000.
  • The combined Total Control FAXport VFN solution offers carriers and Internet service providers (ISPs) a complete platform for delivering cost-effective fax services to corporate customers of all sizes, with an expected growth of 7.8 billion minutes in 2002 (Source: International Data Corp).
  • Analysts expect that converged fax-data networks will result in significant cost savings for businesses, with an estimated growth of the IP telephony market from $272 million in 1999 to $5.5 billion in 2002 (Source: Ovum).
  • The acquisition is expected to form an integral part of 3Com's CommWorks platform for unified messaging applications, enabling the deployment of enhanced IP-based telephony services and paving the way for the development of unified messaging applications for business users.
  • 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.

Statistics:

  • The IP fax services market is projected to grow from $80 million in 1999 to $2 billion by 2002 (Source: International Data Corp).
  • The combined Total Control FAXport VFN solution enables carriers and ISPs to deliver 640 million minutes of fax-over-IP services worldwide in 1999, with growth expected to reach 7.8 billion minutes in 2002 (Source: International Data Corp).
  • Analysts expect the IP telephony market to grow from $272 million in 1999 to $5.5 billion in 2002 (Source: Ovum).

Sources:

  • Business Wire, "3Com Corporation Completes Acquisition of LANSource Technologies, Inc.", December 7, 1999.
  • International Data Corp., "IP Fax Services Market to Reach $2 Billion by 2002".
  • Ovum, "IP Telephony Market to Reach $5.5 Billion by 2002".

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