sorry about that (picked up the wrong URL); here's the story:
October 21, 1996, Issue: 924
Section: News -- Business
Remote-access on fast track
By W. David Gardner
Alameda, Calif. - High-capacity remote-access switches recently
unveiled by Ascend Communications Inc. and Cascade Communications Corp. hit the shelves at particularly aggressive price points. The take-no-prisoners pricing theoretically could signal one of two opposite trends:Either the Internet-access market has entered a
bloody period of price-slashing commoditization or the remote-access
bandwagon is adding riders and building irreversible momentum.
In practice, both trends seem to be at work, depending on your
vantage point.
The high end of the remote-access-switch business is enjoying
runaway growth that shows no signs of slowing down and continues to
attract participants. "Growth in the remote-access market will continue to accelerate through the end of the century as new users drive demand for equipment," said analyst Bobbi Murphy of the
market-research firm Dataquest Inc. "The glut of new users also will
drive demand for larger, more-integrated systems that can handle
higher call loads and provide integrated access to LAN and WAN
backbones."
That's the good news. The bad news is that players in the normally
gentlemanly telecommunications business are beginning to use
bombast of the type that typically precedes a heavyweight boxing
match.
The reigning champ of the high-capacity remote-access-switch
business is Ascend, whose triple-digit revenue and earnings growth
over the past three years have earned it Ali-scale bragging rights.
With its GRF 400 and its TNT switches, Ascend aggressively seeks to
boost its already sizable market share. The contenders it hopes to
batter include smaller, but gaining, Cascade and networking colossus
Cisco Systems, which is preparing to step up its effort in the
remote-access arena via its newly acquired StrataCom unit.
"We are the Cisco of the mid-1990s," said Ascend's vice president of
strategic business development Bernie Schneider. "We recognized
that an entirely new product architecture was required-a
high-throughput, linearly scalable switch with fully distributed routing capability. The GRF will outperform any product on the market today."
Ascend's GRF is the initial product in a family of high-performance IP switches aimed at alleviating the congestion problems on carrier and Internet backbones. The device forwards 2.8 million Internet protocol (IP) packets per second and is immediately available at prices starting at $15,650.
Ascend's MAX TNT is a WAN-access switch that concentrates dial-up
and dedicated traffic in a single platform with the capability of
supporting 2000 concurrent modem users. Ascend says the MAX
family accounts for nearly 55 percent of the worldwide WAN-access
concentrator market for analog and ISDN.
Meanwhile, Cascade is muscling its way into the field, drawing on its traditional strength in asynchronous transfer mode (ATM) and frame
relay to propel its product line into the high-performance
remote-access-switch market. In announcing the AX 800 and AX 1600
high-capacity access switches, Cascade claimed that "the AX family
offers the industry's highest modem density in a single shelf." (A
rejoinder came fromAscend's Schneider, who noted that Ascend's
product is available immediately, while Cascade's won't be available
for a few months.)
Designed with service providers in mind, the AX family combines ATM
and frame-relay switching with switching capability for integrating
analog-modem-based applications with such high-speed digital
services as ISDN and leased lines. The Model 1600 supports up to
672 integrated digital modems in a single shelf.
An interesting wrinkle in the Ascend-Cascade face-off is that neither company originated its respective new products. Ascend's GRF 400 was created by its new High Performance Networking Division, formerly the independent NetStar Inc. Cascade's AX family is based on
products developed by Arris Networks Inc., which Cascade acquired
earlier this year.
Where in the picture does StrataCom fit? Once in the vanguard of the
frame-relay market, StrataCom's market share slipped in recent
months as Cisco digested the smaller company. Peter Alexander,
executive director of marketing for what is now Cisco's StrataCom unit, said he expects to begin winning market share back beginning next year as the momentum of acquisition takes hold. He added that
Cisco's resources and business connections will soon come into
profitable play.
Cascade on top
A recent study by market researcher Vertical Systems Group
(Dedham, Mass.) says Cascade is moving into the number-one
position in frame relay this year, with more than 20 percent of the
market. StrataCom is nipping at Cascade's heels, with a 20 percent
market share. Last year, StrataCom captured 30 percent of the
market, compared with Cascade's 15 percent.
Cisco, however, has questioned the accuracy of the survey. Indeed,
one of the problems in calling this horse race has been the difficulty of pinning down the constantly shifting remote-access market. New segments seem to materialize virtually overnight; older niches are absorbed into other established markets or trail off.
The new products from Cascade and Ascend both address the
burgeoning need to upgrade the public switched telephone network to
accommodate the surge in Internet traffic. The Del Oro Research
Group (Portola Valley, Calif.) has estimated Ascend's market share in the remote-access marketplace at between 60 percent and 70
percent, but the research firm defines the market niche narrowly.
The Internet-congestion problem is compounded by the tie-up of
expensive Class V central-office switches-originally designed for
short-duration voice use-by Internet calls, which typically run 10 times the length of voice calls.
"Ascend's 150-unit back order for the MAX TNT-representing 10
major customers-indicates that we're meeting the demand for a
carrier-class solution," said Ascend's Schneider.
Some carriers have added capacity at their Class V and Class IV
central-office switches to accommodate Internet traffic, but they are finding the packet-switched approach of the new high-capacity
remote-access switches to be cheaper and easier for data
transmission.
Ascend, realizing the challenge inherent in selling the new TNT
without rocking its flagship WAN MAX 4000 line, has been "preselling" TNT for several months to its largest customers to attempt to delineate its products and avoid irritating users by marketing obsolete solutions. But the next wave of TNT customers, Schneider said, could be the Cascades and Ciscos of the world.
For its part, Cascade is targeting its traditional frame-relay
market-aiming, for instance, at moving computer traffic between IBM
SNA mainframes.
Meanwhile, the low-end remote-access market is booming. In fact,
according to the researchers at Del Oro, the mall-office/home-office
(Soho) switch market is growing at more than 115 percent a year.
Del Oro predicts that sales of access concentrators will jump 177
percent this year and that access-server sales will increase 138
percent. Taking the hit, though, will be communications servers and
terminal servers, expected to drop 28 percent and 7 percent,
respectively.
Dataquest looks at the remote-access market from a systems point of
view. It thus estimates that Cisco has 33 percent of the market and
Ascend 9 percent. Companies prominent in the lower performance
part of the market, such as U.S. Robotics and Shiva Corp., claim
smaller percentages of the overall pie.
"The remote-access-systems market has become one of the
fastest-growing parts of the networking industry," Dataquest said in a statement. "The market is on pace to nearly double from last year's revenue total of $2.6 billion."
Copyright r 1996 CMP Media Inc.
Dee Jay |
