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Technology Stocks : Ascend Communications (ASND)
ASND 205.50-1.5%Dec 5 9:30 AM EST

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To: djane who wrote (46438)5/9/1998 6:32:00 PM
From: djane   of 61433
 
WSJ general summary of N+I conference. [ASND VPN reference]

By MARK BOSLET
Dow Jones Newswires, 5/8/98

LAS VEGAS -- Two familiar themes dominated this week's networking
industry trade show here: producing gear that is faster and more powerful,
and giving it the capacity to do more.

Vendors attending the Networld+Interop conference rolled out powerful
switches, highlighted new network-management and security software, and
focused on the convergence of voice networks and computer networks.
They also talked up plans to bring more bandwidth to homes, even as
some Internet-service providers promoted tiers of higher-quality,
higher-priced access aimed at business customers.

As with other areas of technology, the networking industry is grappling
with rapid change. That's meant more choices for customers, but it's also
made it more challenging for network managers to sort through each wave
of new products.

At the same time, the Internet has altered the rather static traffic patterns of
mainframe and client-server networks, where users were grouped in
isolated, self-contained areas. Now, administrators have less control of
what users are doing and a greater need for oversight.

New Roles for Networks

"People are trying to get their infrastructures right" even as their networks
are pushed into a role of finding new customers and business opportunities,
said William T. O'Shea, president of business-communications systems at
Lucent Technologies Inc.

Among the hottest topics in the networking world is the prospect of
sending voice, data and video traffic across a single network, a cost-saving
opportunity highlighted by 3Com Corp. Chief Executive Eric Benhamou in
a well-attended keynote address. Mr. Benhamou described this
convergence as the "next major milestone for our industry," and his
sentiments were widely echoed.


It is the "hot topic right now" and a market that is "starting to happen,"
agreed Lucent's Mr. O'Shea. Systems to send voice, data and video
across a single network are here today, he said, but widespread use is yet
to come, and it will be two to three years before most customers adopt the
technology fully.


The customers participating in trials now are mostly larger corporations
acting as early adopters, said Edward L. Wadbrook, vice president of
product management at NBX Corp., a private start-up developing a
telephone-convergence product for small and medium-sized businesses.
Broader market deployment, he said, is a year or two away.

Gigabit Switches

Several interesting technologies discussed in past years have reached
market this year. Gigabit switches have been reaching the market over the
past several months, and network managers attending the show were
clearly moving to deploy them.

Among the high-powered boxes introduced at the show was a
eye-catching product from Fore Systems Inc. The Warrendale, Pa.,
company unveiled its ForeRunner ASX-4000, an asynchronous transfer
mode, or ATM, switch designed to sit at the heart of corporate networks
and run at an impressive 40 gigabits per second.

Another product area moving from talk to market is layer 3 switching, a
way of intelligently routing data using silicon chips instead of slower
software. Industry leaders such as Cisco Systems Inc., Bay Networks Inc.
and 3Com have been rushing these products to market.

Cisco officials said Tuesday that layer-3 switching should be a $2 billion
market by 2001.

Last year's drawing-board promises have also translated into more
sophisticated software and hardware for creating virtual private networks,
"tunnel-like" connections across private networks and the Internet that
provide better security and privacy for data communications.


From Smoke, Solutions

Where last year there was "smoke and arm-waving," this year there are
actual solutions, said Grace Carr, vice president of corporate marketing at
Bay Networks Inc. This year's products give service providers and
corporations the tools for easier, more sophisticated tunneling and for
more advanced monitoring of performance and security.

The market for virtual-private-network gear looks like a "rapidly growing"
one that should really take off in three to six months, Ms. Carr said -- and
market researchers see it quickly reaching at least $1 billion.

Both Bay and Ascend Communications Inc. introduced products for
virtual private networks at the show.


Bay brought out its Extranet Switch 1000, a product for companies with
up to 50 simultaneous remote or branch-office computer users who need
to link to a central network. The product incorporates modem functions,
security such as user authentication and abilities to manage the use of
bandwidth. At the show, Ascend introduced a broadened business
strategy for the market and software that provides network managers with
information on network performance.


Internet-service providers, meanwhile, are seeing more savvy customer
interest in higher-quality service, such as firewall, encryption and certificate
security for data transmission.

"The awareness level is at such a point now [that customers] are definitely
more sophisticated," said Scott G. Lewis, Internet-product manager at
CompuServe, a unit of WorldCom Inc.

Industry leaders, of course, also worked to drum up interest in next year's
technologies. Talk focused on the greater use of fiber optics in network
backbones and on the evolutionary step to switching at layer 4, where, for
example, a CEO's e-mail can be given a higher delivery priority than e-mail
from accounting.


Today, however, sorting through the array of products and competing
claims remains a time-consuming task for customers. "There is so much
technology...thrown at them," said Bay's Ms. Carr.

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Copyright c 1998 Dow Jones & Company, Inc. All Rights Reserved.
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