Quick thoughts
The following was lifted from the Bay Networks thread:
From Computerworld:
Bay Networks enters Gigabit Ethernet arena
with $155 million purchase
Bay Networks, Inc. today bounded into the burgeoning Gigabit Ethernet
market with the announcement that it plans to buy startup Rapid City
Communications in Mountain View, Calif., for $155 million in Bay stock.
The long-rumored move catapults Santa Clara, Calif.-based Bay to the fore
of the Gigabit Ethernet race, as it will be able to ship Gigabit Ethernet
switches immediately. Rivals 3Com Corp., Cisco Systems, Inc. and
Cabletron Systems, Inc. aren't shipping these switches yet, but Cisco bought
Gigabit Ethernet vendor Granite Systems, Inc. in Palo Alto, Calif. for $220
million in September 1996.
Rapid City's Fully Integrated Routing Switch Technology line of Gigabit
Ethernet switches has built-in high-speed routing. Rapid City's sales force
will be integrated into Bay's sales organization. All other employees will
work for Joe Kennedy, Rapid City's CEO, who will become a vice president
reporting to Bay's Enterprise Business Group.
Gigabit Ethernet switch sales are expected to grow from $64.7 million this
year to $980 million in 2000, according to Dell'Oro Group, a Portola Valley,
Calif. research and consulting firm.
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Now for the quick thoughts:
If SEEQ provides materials for Rapid City Communications, why wouldn't BAY just buy up SEEQ and cut everyone else out? [Likely because buying SEEQ would appear to be too expensive for a company (BAY) that is only now starting to look more attractive.]
SEEQ sells materials to any networking company that pays, right? They do not have a lock of gigabit ethernet, either (see previous posts just above this one). Nothing I know of says their products are better/worse than their competitor and yet here is a company that seems to some of us readers, and recently some insiders, to be a fine thing and the price just sits still or moves in 1/32 increments up and down. Perhaps the "tie" with BAY isn't a tow rope as much as too tight (and really, I do not see any relationship with BAY other than one company selling to another company).
I would hope this buyout of RCC (a privately held company--hard to know too much about) bodes well for SEEQ, but right now, I see nothing concrete other than my wishful thinking (such as CSCO buying up SEEQ to prevent other companys from using the technology and paying through the nose for it).
Regards,
DFCampbell |
