Intel has bought Dayna Communications, a networking company targeting small business users, as its latest weapon in the war to steal 3Com's market.
Although Intel did not reveal how much it paid, and Dayna is secretive about its business, the company manufactures commodity networking products including adapters, switches, hubs and Internet connectivity kit. 3Com has traditionally dominated the small business market but fellow giants Bay Networks, Hewlett-Packard and Compaq have also expressed interest in the lucrative sector and Intel has targeted it aggressively this year with low cost switch and network card releases.
Intel plans to use Dayna?s experience in selling Fast Ethernet solutions into small businesses, according to Intel executive vice president Frank Gill. "Small businesses are discovering how high speed networking can significantly aid productivity and the bottom line," he said.
3Com announced impressive first quarter results on Tuesday when analysts said it has coped well with competition from Intel. Figures from research group IDC covering the first half of 1997 award 3Com the lead in hub and network card sales to small businesses. It dominates hub sales with 44.7 per cent of the market and has 36.2 per cent of network card sales, followed by Microdyne on 17.8 per cent and Intel on 12.0 per cent. 3Com's small business executives were off-site on Wednesday and unavailable for comment on Intel?s buy.
Although Dayna is a small company, sources said competitors are worried about the buy because it gives Intel an installed base of small businesses and a ready made product line. Dayna is based in Salt Lake City, Utah and uses Ingram Micro, Tech Data and Merisel to distribute its products in the US, alongside a variety of distributors in Europe.
Dayna president and chief executive Brad Romney said his company has looked for a buyer or partner that offers greater strength and branding in the market for six months. Dayna will become an Intel division but Intel will launch Dayna products under its own brand by summer 1998, sold through Vars.
In an unrelated move, Intel has launched a 10/100 Ethernet Lan adapter and 56Kbps modem combined on a 16-bit PC card. Intel badged the product under an OEM deal with Xircom and will sell it for $389 in the US. Intel holds a 12 per cent stake in Xircom.
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