3Com Unveils New Switch as Firms Race to Increase Speed
By G. CHRISTIAN HILL
Staff Reporter of THE WALL STREET JOURNAL
The race to speed up large corporate computer networks is accelerating, with 3Com Corp. announcing a powerful new switch that operates at four times the speed of market-leader Cisco Systems Inc.'s latest product.
Cisco said it will soon match or exceed 3Com's effort, indicating that the two largest data-network equipment suppliers are focusing on leapfrogging each other with higher-speed offerings. Such competition probably will quickly allow big corporate networks to handle video and voice as well as data, and hasten the day that the public Internet can do the same thing.
3Com said its latest product, the $30,000 Corebuilder 3500, can process as much as four million packets of data per second, and will cost about $1,000 a connection. That cost is similar to Cisco's Catalyst 5500, which can handle nearly a million packets a second.
Speed Is Increasing
3Com, Cisco and many other companies are making remarkable gains in speed, partly by converting instructions handled by software to instructions embedded on microchips called application-specific integrated circuits, or ASICs. 3Com expects to ship a switch next year that can handle as much as 56 million packets a second, a nearly 1,900-fold increase from the amount of data handled by a switch built five years earlier.
The company asserts that it is six to nine months ahead of Cisco in using chip technology to integrate instructions of routers, which direct and manage network traffic with high-speed switches that make connections among locations on the network. Cisco has parlayed its dominance of the router market, where it has a share of 60% or more, into a remarkable run of profits and a market capitalization that ranks third on the Nasdaq Stock Market after that of Microsoft Corp. and Intel Corp.
But Cisco has to watch out for rapid technological change in its industry. For example, a number of start-ups are using the same approach as 3Com to develop switches to connect networks over wide areas, another Cisco stronghold. Two weeks ago, four of the world's top five telecommunication-equipment makers announced a big investment in Juniper Networks Inc., which plans to ship in about a year a so-called backbone router-switch aimed at the heart of Cisco's Internet business.
Challenge for Cisco
Ron Sege, 3Com's senior vice president, compared Cisco's position to that of International Business Machines Corp. in the early 1980s, when networks of desktop computers and host machines called servers began to take over many of the functions of mainframes. Mainframes continued to serve an important function, as super-servers, but most of the future growth occurred in networks. Mr. Sege said Cisco is trying to hang on to an approach that retains an important Cisco edge in software, rather than move rapidly to ASICs.
Thomas Downey, a Cisco director of product marketing, denied that Cisco is trying to hang on to old technology. "We've been in ASICs forever," he said, adding that competitors are just trying to chip away at Cisco's huge lead in routers. He said Cisco will soon ship products comparable to 3Com's Corebuilder line.
But Mr. Sege said Cisco will have problems maintaining revenue and profit growth if it cannibalizes its older product lines too rapidly with much cheaper gear. |
