O.K., now I read the thread. I am tired. So no body write anything more until tomorrow and then I'll fill you in.....
Nah, can't wait that long.
Pat went to NN and its break out session came back for ASND presentation and stayed for TXN's presentation. I watched NN, AFCI and ASND presentations and went to the ASND breakout and post breakout sessions, until Mory and crew left for some private sessions. I'll report some comments from NN and AFCI first.
All comments are to the best of my notes and are subject to my ability to hear and understand the subject areas.
Other Presenters Comments
NN said that QoS is an important part of ATM's future success, but another key is the multi-function cost reductions of having many things in one switch. VoIP, FR and ATM within a box can save 68% of the capital equipment cost and 22% of operational costs. Less boxes, less energy.
NN also said their switches were big enough to handle all the phone traffic of the UK in one switch. Now who know if that is some optimum switch environment, but it created an impression. I assume that both of these points could be made about ASND's Core Switching products.
AFCI while not directly competing with ASND is in a nearby business, was very bullish. Visibility is getting better. Growth going up. And this could mean this whole area is getting a boost.
While it was written that Mory spoke for only 8 minutes, that was the format that Joe Noel of H&Q asked for on his companies. AFCI did the same format, yet interestingly they were not written up as hiding from the media, or carrying a small stick. And AFCI was not taking any floor questions either. So in my opinion the author of that remark has a personal agenda.
Mory's Presentation
There were 20 slides presented by Mory in his 8 minute presentation. Many were new. My request, or hope, for a Recent Wins summary was on slide 13. Listed were Williams, GTE Switching, LCI, XCOM/Level-3 (It was mentioned in the breakout session that this is not final, and it is possible that Fore could get this contract due to cheaper price on a lower product bid), AT&T, PSINet, QWEST and NTT Packet.
I will not go into slide details here. But it was a general summary of the business as we know it from the CC and analyst reports. I have a copy of the overheads, if there are any questions.
Joe Noel's Q&A Period
The questions were from H&Q's Joe Noel and the answers were all Mory's:
Q: Where is ASND visa NN and other competitors?
A: Our Core Switching products, ATM, SONET, etc., are ahead of our competitors.
Q: What is happening with QWEST and others?
A: These customers are moving to ATM management over fiber. The cross connects are all moving over the long term to an ATM enviroment.
Q: Same issue in CLEC's versus RBOC's:
A: Yes, both long term will be moving towards ATM.
Q: Will the Accesss business continue growth as in Q1?
A: In Q1 we had 8% growth in Access products and expect to see the same going forward. Content providers are using more ports, which is fueling demand. Ascend's market shares is growing through GTE, WCOM and PSINet as examples.
Q: How is the competitive environment, i.e., where is Ascend compared to Cisco?
A: I am very bullish. Ascend is well ahead of Cisco. We are not seeing Cisco Stratcom in many of our accounts.
Q: How is international growth, specifically Europe, and are there any issues regarding the MAXTNT products?
A: Maintaining low double digit growth in Europe (this QoQ, which is higher when compounded). No MAXTNT issues.
Q: What is the environment in the internet access in Europe?
A: The average connect time has raise from 5 minutes to between 15 and 20 minutes.
Q: Give us an idea of the expected growth of Japan in the second half of 1998, and state of the Japanesse market?
A: Q1 10% of sales came from one customer from ATM switching products (guess we just found out who the other 10% customer is). Interestly in Q2 we expect the same percentage revenues to come from Japan, but it will be in Access products from customers adding to internet ports to expand their networks.
Further, the expected recovery of the Japanesse economy should allow for greater growth in the second half of the year.
Q: What is happening in VoIP?
A: We are in the first phase of VoIP for long distance. This area has great promise with the average price per minute as low as 6 cents. Whihc considerably cheaper than current systems.
Q: Is ATM the preferred backbone migration for RBOC and new carriers versus ATM SONET/Packet over SONET? (I admit my notes are weak here.)
A: ATM is Quality of Service that is needed to assure customers needs are met.
Q: Where are you seeing strenght and RFP coming from?
A: RFPs are coming from all over the world. Global, FT, DT and others are looking for ATM RFP responses. As is Italy. RFPs are new business and we have to earn that business (you see a mix of confidence with these caution statements).
Q: What is happening with port density, is 3COM leading?
A: 96 ports and less LU's Livingston and USR are present and we are competing well. High end not real competitors. We are seeing Cisco in the enterprise space.
Q: How has Livingston's purchase by Lucent changed the competitive environment?
A: It has not changed. They are behaving very much the same and we are still picking up business.
Q: Can you give us and increase in your forward guidance for the Q and the Year?
A: We are comfortable with the current guidance (This is being consevative IMHO, and is a reaction to Q3. They are not going to raise until they have to. This also probably cost us today's high, but that is more likely to benefit us in the long run.).
Q: You are not going to give us any upward guidance with all this good ATM news?
A: ATM deals are delivered over several quarters and can take time to deliver. We are not raising out guidance at this time. (Could have been the nail, saying it twice.)
Breakout and Post Breakout to follow.
Dennis |
