ASND takes on CSCO!
According to the 6/7 issue of Inter@ctive Week, Ascend's acquisition of NetStar is part of their strategy (both offensive and defensive, I'd say) to broaden their marketability to ISPs by competing more directly with Cisco's routers:
Inter@active's aritcle indicated that "...ISPs rely on essentially three pieces of hardware -- access equipment, routers and frame relay switches -- to move data across the Internet", per one analysis of the deal.
This analyst believes that by adding NetStar's very fast GigaRouter line, complementary to Ascend's Max product line of dial-in access devices, Ascend hopes to compete with Cisco, which controls much of the ISP router market and offers switching and access equipment.
Paula Cook, Ascend's Director of Investor Relations, indicated that Ascend's immediate plans for the GigaRouter, which is capable of moving 2.5 billion packets of data a second, is to add network
management technology and frame relay capabilities. She also indicated that by expanding its product line, Ascend expects the NetStar acquisition to better position the company to more completely take on Cisco's diverse line of networking equipment.
Makes sense to me - good strategy towards gaining greater market share of a tremendoulsy expanding market, yielding double growth possibilities. This should make the $300 million investment produce very high returns, both in revenues and further enhancing Ascend's stellar reputation. |
