Robert Mao wants to use the global recession to launch an Asian invasion. Just as Toyota stormed the Big Three automakers in the early 1980s and Indian outsourcers plundered IBM's market at the beginning of this decade, he argues that the current downturn has given Chinese technology a chance to take on networking firm Cisco Systems.

This time, however, there's a geographical twist: Mao's Eastern disruptor is none other than the long forgotten networking pioneer 3Com, a company headquartered in Marlborough, Mass.

The fact that Mao, 3Com's chief executive since April of last year, lives and works in Beijing is just a piece of the networking company's unlikely hybrid of East and West. Most of 3Com's 6,000 employees, 52% of its $1.3 billion in revenue and nearly all of its research and development staff are in China. While 3Com has only a 3% slice of the networking gear market worldwide, it controls a third of China's market--just a few percentage points less than Cisco.

That Chineseness marks a strange shift for the company that first brought Ethernet technology for local area networks to the U.S. in the 1980s, and whose headquarters and board are still situated stateside. "Are we Chinese? Are we American? No. We're a global company," says Mao, 65. "Ideas, know-how, value can flow every which way." Mao, born in China, raised in Taiwan and educated at MIT and Cornell, has seen this firsthand.

These days, however, 3Com is moving in a very specific direction: anywhere it can steal Cisco's customers. Since the spring it has adopted a "China Out" strategy, expanding its sales channels and products to target the West. In May the company released a data-center switch designed to go head-to-head with one Cisco released last year.

3Com's boxes lack some of Cisco's newfangled features, like automatic configuration of devices attached to the network, smart video routing and the integration of fiber channel with Ethernet that allows computing workloads to be distributed among faraway data centers. But 3Com's products are cheaper, a fact that has given it a strong foothold in China and may translate well to the West. 3Com's equipment costs as much as 40% less than the equivalent Cisco hardware, according to the Yankee Group.

3Com uses commodity processors from Broadcom and Marvell--what the industry calls "merchant silicon." By contrast, Cisco designs its own chips and has others build them. 3Com's cheaper, more energy-efficient components are quickly narrowing the performance gap with Cisco's processors.

Other Cisco competitors like Hewlett-Packard and Brocade also use merchant silicon, but 3Com says its 2,300 Chinese engineers develop the software that integrates those components into marketable products faster and cheaper. "Our guys are as good as any in the world, and we get three or four for the price of one in Silicon Valley," says Ronald Sege, 3Com's chief operations officer in Menlo Park, Calif.

That Chinese advantage is partly the result of a costly blunder. In the dot-com frenzy of 1999 networking newcomers with inflated valuations were driving down 3Com's margins, pushing it into quarterly losses. In 2000 the company abruptly dropped its business of selling networking equipment and software to large corporate accounts. By 2002 it had laid off 80% of its 10,000 employees.

When the market stabilized, what remained of 3Com wriggled back into big business networking through a joint venture called H3C with Chinese telecom supplier Huawei. In 2007, 3Com bought out Huawei's share. Bain Capital then attempted to acquire 3Com for $2.2 billion and merge it into Huawei, but U.S. regulatory concerns about Chinese ownership of 3Com's security business killed the deal. The company's growth in China has since helped bring it close to that $2.2 billion market valuation.

For its China Out strategy, however, the recession cuts both ways. While its revenue from outside China dropped 24%, to $209 million in the six months through May, its share of the Ethernet switch market has inched up to 11% since the beginning of the year, according to networking market research firm Dell'Oro Group.

Mao says the attack on Cisco has just begun: "Even when the recession ends, no one will overspend the way they used to, and that's an advantage for us. Once 3Com was disrupted. Now we are the disruptors."