It's all your fault!
Bay Chief Blames Gigabit's Slow Growth On Cisco
(03/18/98; 3:19 p.m. EST)
By Ken Presti, Computer Reseller News
The CEO of Bay Networks accused rival Cisco of waging a campaign of "FUD," fear, uncertainty, and doubt, against high-speed Gigabit Ethernet technology.
Bay CEO David House pointed to Cisco's apparent difficulties in bringing competitive gigabit products to the marketplace as the primary reason for attempting to slow the market, which was cited as one of several contributing factors to Bay's announcement that it will post results below expectations for its third fiscal quarter. That news sent Bay shares down 10 percent Tuesday.
"From the beginning of the quarter, Cisco has been saying the gigabit specs aren't standards yet," House told financial analysts in a conference call. " 'When you need it, we will have it. You don't need it yet. Just wait with us and continue to buy our existing stuff.' "
He added,"Then, when we got into the quarter and the pressure mounted, we saw them announce a gigabit interface on their existing products which, of course, are not gigabit-ready and don't have the fabric and switching capacity to handle that kind of traffic.
"Then as things proceeded, they preannounced a gigabit switch, which, from the data we can gather, seems to be a defeatured version of their 12000 [GSR] high-end router product we think will be putting a square peg in a round hole. We'll have to see," House said. "Maybe they'll pull a rabbit out of the hat. But certainly, Cisco is an excellent marketing company and they do an excellent job of the old IBM FUD sales technique."
House said seasonal slowness, combined with industry uncertainty regarding Gigabit Ethernet, 56-kilobit-per-second modems, switching vs. shared media, and routing vs. route switching, brought about a shortfall that could have been avoided with an additional two weeks of selling.
House said he predicted that the seasonably strong June sales quarter plus full ramp of Bay's Accelar routing switches and its forthcoming extranet access switch will let the company bounce back strong in the fourth fiscal quarter.
"What we can do by moving routing from software into hardware, whichis basically what you do with a routing switch, we can offer a good order of magnitude performance improvement," said House, referring to his line of Accelar Layer 3 routing switches now shipping. "When you put this in a customer's backbone and they see the thing actually work, this is going to turn some heads. This is not a small change, and we're winning some significant, large Cisco accounts with this product."
Bay, based in Santa Clara, Calif., is seeding the Accelar market with demonstration units which began field deployment earlier this month.
Kent
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