Cisco Systems Accelerates Shipping of Gigabit Ethernet Products
San Jose, California, Feb. 10 (Bloomberg) -- Cisco Systems
Inc. said it began shipping its newest high-speed computer-
networking equipment, ahead of a standard for the technology, as
several of its rivals have unveiled similar products.
Cisco's news comes one week after Chief Executive John
Chambers acknowledged that the company is late with its rollout
of the so-called gigabit Ethernet switches, and just days after a
technical snag delayed the standard for at least three months.
Gigabit Ethernet products transfer data on computer networks 10
times faster than existing switches for a fraction of the cost.
The No. 1 networking company previously said it would wait
to ship the products until after the standard was adopted, even
as competitors 3Com Corp., Bay Networks Inc. and Cabletron
Systems Inc. moved to ship gigabit switches. Cisco said it
changed direction as customers began to ask for the products.
''They've got to have some products out there or they are
going to lose business,'' said William Becklean, an analyst with
Tucker Anthony Inc., who has a ''buy'' rating on Cisco.
Cisco, which controls 80 percent of the market for high-cost
networking routers, is facing pressure as its competitors
introduce new switches that combine the intelligence of routers
with the speed of switches, Becklean said.
Burgeoning Market
Industry analysts expect the market for gigabit Ethernet
products to take off in late 1998 or 1999 and increase to about
$1 billion, or 5 percent of the networking-products market, by
2000.
The standard for gigabit Ethernet, which was expected to be
ratified next month by the Institute of Electrical and
Electronics Engineers, now will be adopted no earlier than June.
Cisco ''is committed to the (gigabit) standard,'' and its
new products will be compatible with standards-based products
when they become available, said Jayshree Ullal, vice president
of the company's enterprise business unit. Customers may have to
purchase a converter interface for about $500, though, if there
are extensive technical changes to the final standard, she said.
Bay and 3Com have guaranteed that they will support the
standard and replace equipment for free if there are changes.
In its new products, Cisco combines in-house technology with
technology the company acquired when it bought startup Granite
Systems in 1996. That technology is needed to process data moving
at gigabit speeds.
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