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Technology Stocks : MONI - Marconi Nasdaq ADR

MONI 0.00346

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Nov 7 9:30 AM EST

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To: danofthebes who started this subject	9/12/2001 10:46:56 PM
From: ms.smartest.person	Read Replies (1) of 129

Marconi Ends Development of Enterprise Products as Losses Mount Marconi has ended ongoing investments in technologies for large enterprises. It will continue to support customers, but enterprises planning new investments should look elsewhere. -------------------------------------------------------------------------------- Event On 4 September 2001, Marconi reported that it incurred an operating loss for the first quarter ended June 30 of £227 million ($330 million). The chairman and chief executive officer both resigned. Marconi also announced further staff reductions and a review of its future investment plans. The company said it would reduce cash consumption and explicitly stated that investment in enterprise-specific technologies would cease. First Take Gartner has predicted for some time that Marconi's enterprise business (principally obtained when Marconi acquired Fore Systems) would take second place to its service provider business (see Research Note C-10-6765, "Enterprise-Focused Fore Becomes Carrier-Focused Marconi"). The downturns in telecommunications markets have forced Marconi (along with many other equipment vendors) to review its portfolio and cut its presence in market areas in which it did not have a strong position. Marconi's presence in the enterprise market clearly fell into this category. Although some technologies such as ATM (asynchronous transfer mode) have applications in both enterprise and service provider markets, those products will not constitute a viable enterprise product portfolio without enterprise-specific investment. Marconi said that it will provide "continued support for existing corporate customers." Gartner expects that since Marconi will continue development of its existing ATM platforms for use by service providers, support for existing ATM functionality for enterprises will be largely unaffected, and they may even see enterprise-specific feature enhancements on those platforms. Therefore enterprises with Marconi ATM products should not have to replace those products until they are ready to migrate to Gigabit Ethernet (see Research Note SPA-09-1524, "Move Over, ATM — It's Time for Gigabit Ethernet"). Enterprises with Ethernet products from Marconi will likely be more dramatically affected and should seek clarification about continued support levels from Marconi as soon as possible. Gartner advises enterprises to avoid purchasing Gigabit Ethernet products from Marconi (even if they are OEM products from other manufacturers). Analytical Source: Neil Rickard, Enterprise Network Strategies Europe www3.gartner.com

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