Comment on CSCC: Are Fast Ethernet and Gigabit Ethernet challenging ATM?
Q: Is there more to the Cascade Communications (CSCC) revenue slowdown than meets the eye? Cascade is a Frame Relay/ATM player. Are customers focusing more on Fast Ether and Gig Ether products as an alternative to ATM?
Q: Why did Cisco buy Stratcomm, and shortly after Granite Systems (a Gig Ether company)?
Check the following analysis out, from Forbes Magazine Online:
"Similarly, NetStar [see Forbes ASAP, "Angst and Awe on the Internet," Dec. 4, 1995], now being purchased by Ascend Communications for $300 million in stock, offers an IP crossbar switch in gallium arsenide with a backplane throughput of 16 gigabits per second. Meanwhile, vendors of Fast Ethernet and Gigabit Ethernet attracted increasing attention. Why transform your network when you can get most of the advantages of ATM through new forms of Ethernet and TCP/IP?"
From- Georger Gilder, Forbes ASAP, August 26, 1996
(full text)
forbes.com
And also from the 3Com chairman recently:
"One key driver of industry growth is the broad-based transition from Ethernet to Fast Ethernet. While we always expected it to be more natural and more rapid than most other technology transitions in our industry, we still find ourselves surprised at how fast it is now occurring."
-- Eric Benhamou, 3Com's Chairman and chief executive officer, discussing 3Com's first quarter of fiscal 1997 results on a conference call
(full text)
3com.com
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The real question is whether Ethernet will migrate up to the backbone, or ATM will make it to the desktop, or some middle (LAN emulation) is reached. Right now, I think everyone is being surprised by the Fast Ether market. Further, some leading players like Cisco, 3Com, and MRVC are moving ahead with plans for Gig Ether as a WAN/backbone technology.
By the way, MRVC paid about 1/10th the price Ascend did for the Fibronics backplane technology.
Dan |
