Forbes article on LU/CSCO battle. More LU/ASND acquisition speculation
[Are we stuck in a feedback loop with analysts and reporters using each other as sources or what? But, there does seem to be more and more evidence of the LU/ASND strategic sense. First, check out Chambers' comments in the CC about LU lack of desire to partner with CSCO. Second, ASND's lack of acquisitions of any start-ups is getting curiouser and curiouser. I mean, CSCO (their key competitor) acquired 3 companies last quarter and intends to acquire 10-15 more this year. What has ASND done since Cascade? Nothing. Does anyone have an alternative theory? djane]
Buying Fever
By Om Malik
For the past 24 months, the big five
networking companies, Cisco Systems
(CSCO), 3Com (COMS), Bay Networks
(BAY), Cabletron Systems (CS) and Ascend
Communications (ASND), have been snapping
up their smaller but more innovative rivals at a
breakneck pace. Now they have new
competition--Lucent Technologies (LU).
Last year, the Murray Hill, N.J.-based company
announced that it would enter the data networking
business. Since then the company has spent $2
billion buying up many of its rivals--the most
prominent being Livingston Enterprises, Prominet
Corp.--and, more recently, Yurie Systems
(YURI).
Lucent is not the only one moving into the data
networking space. Canadian telecommunications
giant Northern Telecom (NT) is another strong
pretender to the data networking crown and has
been taking market share.
The market is rife with
speculation that Lucent
might make a bid for
Ascend Communications.
Nortel and Lucent Technologies are the sleeping
giants in the networking industry and could tackle
data networking from their roots in voice-based
systems.
The market is rife with speculation that Lucent
might make a bid for Ascend Communications,
which makes hardware for the Internet. With
Lucent stock hitting an alltime high, analysts
expect Lucent to use its equity as currency. This
could mean bad news for the traditional
networking firms like Bay and Cabletron, which
have seen their sales slow down due to strong
competition from Cisco, Lucent and Northern
Telecom.
Volpe Brown Whelan analyst Amar Senan thinks
that right now the battle is between Cisco and
Lucent--these companies have to find ways to
maintain their 20%-plus revenue growth intact.
Both have been able to ride out the volatility in
technology stocks by constantly posting solid
earnings.
"The lines between voice communications and
data communications have become so blurred
that these two would be competing with each
other in every sphere of the market," he says.
Cisco will have to move into voice
communications space to grow, while Lucent will
have to keep nibbling into the data communication
market, he predicts.
Senan predicts that Cisco in the near future could
go on a shopping spree for companies that make
hardware for voice networks. These include the
likes of Advanced Fiber and Tell Labs. "These
are good companies with good client base, and
would make a worthy addition to the Cisco
arsenal," he says.
| top |
See also:
Looking for the next Cisco
A startup with dreams of becoming the next Cisco is in
for a rude awakening.
Xedia's bandwidth meter
Xedia is hot thanks to a meter that measures and
controls bandwidth usage.
Forbes Front Page | Forbes Magazine | The Toolbox
Sitemap | Help | Search | Webmaster
c 1998 Forbes Inc. Terms, Conditions and Notices
|
