STORY page 39

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systems are linked together. first with all the important tech-
Companies like 3Com are paving nologies."
When Nahman Shelef, head of
the way for the international in-
NiceCom, met at his headquar-
formation superhighway.
As customers build bigger and ters last month with Mr. Ben-
more powerful networks, they are hamou, the deal between their
looking for bigger companies with companies was so fresh that Mr.
more depth, capable of integrat- Shelef had to spend a few mo-
ing various kinds of technologies ments crossing out "NiceCom
President" on his business card
into their systems.
This has led to a recent spate and handwriting "3Com Vice
of acquisitions, mergers and con- President and General Manag-
solidations. Less than a year ago, er" of the new division.
Mr. Shelef said giving up on
there were 10 companies world-
wide in the networking business. the dream of developing NiceCom
as an independent entity was not
Now, there are only two.
easy. It meant scrap-
ping a carefully
mapped-out blueprint
for the future.
That business plan
had been to locate a
larger U.S. company
which would sell and
market NiceCom's
technology — tem-
porarily.
The revenue from
these early sales
would sustain Nice-
Com while it worked
on building its own
sales and marketing
infrastructure which
would eventually take
over.
"The toughest part
of being acquired by
3Com was making the
decision to change,
making the switch in
our head that we were
Practical applications of ATM not going to go through with our
are still undeveloped, but it is con- original plans," said Mr. Shelef.
Benny Levin, the president of
sidered the wave of the future by
Nice Systems, NiceCom's parent
networking experts.
Last spring, 3Com decided that company and its principle share-
acquiring the ability to provide holder, conducted the negotia-
ATM was a key strategic move. tions for the acquisition.
He said 3Com's good reputa-
"We don't think it will be a
complete pervasive technology tion for handling acquisitions was
for a very, very long time," said a key factor in the decision to go
Mr. Benhamou. "But in the through with the sale.
"Other companies approached
minds of large customers, it is im-
us, but it was very important to
portant.
"Today, when you go to work us to go with 3Com because of
on a very large network project their past record of acquisition of
with a Fortune 500 company, companies, integration of the
most of the time they will ask: companies into 3Com, and the
What are your plans with ATM? culture of 3Com vis-a-vis the em-
Can you take my network and ployees," Mr. Levin said.
NiceCom is expected to receive
make it grow and incorporate
ATM into it? It has become a $18-20 million for its 53 percent
holding. Also enjoying an ex-
code word for the future."
Mr. Benhamou chose to ac- tremely healthy profit are the pri-
quire NiceCom over its ATM-de- vate placement investors who last
veloping competitors because of January put $5 million into Nice-
NiceCom's depth of organization, Com in exchange for a 25 percent
corporate culture and the quali- stake in the company — the lead
ty and direction of its technology. investors were Hapoalim Provi-
NiceCom specializes in inte- dent Funds and the Mofet and
gration devices which can grad- Star venture capital funds.
As a result of the 3Com sale,
ually bring ATM technology into
that $5 million burgeoned to $13
existing systems.
Mr. Benhamou also chose to million in only nine months.
The 3Com acquisition has been
buy NiceCom because it was'the
quickest path to offering ATM to viewed in Israel as an important
customers. And in the network- vote of confidence in Israeli high-
tech following several disap-
ing business, time is critical.
"Early procurements have a pointing results that companies
way of shaping the future of the suffered on world financial mar-
industry," says Mr. Benhamou. kets.
Mr. Benhamou said some of
"We can't afford not to be there

