7/30/2007 -- You might have missed it, but 3Com Corp. last month announced a plan to effectively divest itself of one of its information security crown jewels: TippingPoint, a provider of intrusion prevention systems (IPS) and security services for enterprise, public sector and service provider customers alike.

3Com purchased TippingPoint for $430 million nearly three years ago. Analysts are wary of the move, which they see as both financially risky and competitively questionable.

For the record, 3Com plans to execute an initial public offering (IPO) of common stock of TippingPoint, which it now controls as a wholly owned subsidiary.

If nothing else, industry watchers say, the move demonstrates that 3Com is serious about its Open Services Networking initiative.

"[T]his announcement signals a major change in direction for the company strategically and it demonstrates that 3Com is willing to 'walk its talk' with respect to its seriousness in promoting 3Com Open Services Networking as its long-term corporate vision," wrote Andrew Braunberg and Charlotte Dunlap, analysts with consultancy Current Analysis.

Although Braunberg and Dunlap both describe the spin-off as a "gamble," the duo also feels that the combined 3Com-TippingPoint never really exceeded the sum of its individual parts.

"[T]he combination of 3Com and TippingPoint was never more threatening than TippingPoint alone. 3Com did not pull TippingPoint into the SMB market and TippingPoint had limited success pulling 3Com up into the enterprise," they wrote.

Elsewhere, they indicated, there are a few undeniable benefits to the deal for 3Com, which "needs to reduce costs in its core secure, converged networking (SCN) business." By divesting itself of TippingPoint, this should be much easier, Braunberg and Dunlap noted.

"In addition, 3Com wants to refocus SCN sales into the SMB segment, again an easier task without having to worry about the TippingPoint business, which targets high-end enterprise sales," they said.

And then there's the Open Services Networking angle.

"[The divestiture] will make it much easier for 3Com to attract security partners to its Open Services Networking...initiative. It was clear when OSN was announced in January 2007 that 3Com would have trouble positioning itself as a neutral player in the security market in light of TippingPoint," the duo concluded. "3Com had a couple of initial security partners, most notably Q1 Labs, but in the six months since there has been no progress attracting security partners. Spinning TippingPoint out will demonstrate that 3Com is serious about providing an open and neutral platform for best-of-breed services. More tactically, TippingPoint is a good candidate for an IPO. The company has been a leading IPS provider for many years and its technology is mature and respected." --Stephen Swoyer