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Technology Stocks : Ascend Communications (ASND)
ASND 212.33+1.1%Nov 28 9:30 AM EST

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To: uu who wrote (46328)5/8/1998 1:33:00 PM
From: Narotham Reddy  Read Replies (1) of 61433
 
Networking Show Highlights Faster, More Versatile Products

By MARK BOSLET
Dow Jones Newswires, May 8, 1998

LAS VEGAS -- Two familiar themes dominated this week's networking
industry trade show here: producing gear that is faster and more powerful, and
giving it the capacity to do more.

Vendors attending the Networld+Interop conference rolled out powerful
switches, highlighted new network management and security software, and
pointed to the convergence of voice and computer networks. They also talked
up plans to bring more bandwidth to homes, even as some Internet service
providers promoted tiers of higher-quality, and higher-priced, access to
business customers.

The networking industry, not unlike other areas of technology, is grappling with
rapid change, which presents customers with more choices. As networks
continue their quick growth and users seek more bandwidth, network
managers find sorting through each wave of new products more challenging.

Further, the Internet has altered the rather static traffic patterns of mainframe
and client-server networks, where users were grouped in isolated,
self-contained islands. Administrators have less control of what users are
doing and a greater need for oversight.

"People are trying to get their infrastructures right" even as their networks are
pushed into a role of finding new customers and business opportunities, said
William T. O'Shea, president of business communications systems at Lucent
Technologies Inc. (LU).

With this backdrop, industry jargon circulated about the Las Vegas Convention
center as freely as data packets, with the more than 600 vendors promoting
gigabit, layer 3, virtual-private-network, e-commerce, xDSL and
bandwidth-management products.

Among the hottest topics in the networking world is the prospect of sending
voice, data and video traffic across a single network, a cost-saving
opportunity highlighted by 3Com Corp. (COMS) Chief Executive Eric
Benhamou in a well-attended keynote address. Benahmou described this
convergence as the "next major milestone for our industry," and his sentiments
were widely echoed.

It is the "hot topic right now" and a market that is "starting to happen," agreed
Lucent's O'Shea.

Systems are here today, but widespread use is yet to come, he added. It will be
two to three years before most customers bring in the technology fully.

The customers "doing trials now are the early adopters" and often larger
corporations, said Edward L. Wadbrook, vice president of product
management at NBX Corp., a private startup developing a telephone
convergence product for small and medium-sized businesses. Broader market
deployment is one to two years away, he said.

Several interesting technologies discussed in past years surfaced in promising
products this year. Gigabit switches have been reaching the market over the
past several months, and network managers attending the show were clearly
moving to deployment.

Among the high-powered boxes introduced at the show was a eye-catching
product from Fore Systems Inc. (FORE). The Warrendale, Pa., company
unveiled its ForeRunner ASX-4000, an asynchronous transfer mode, or ATM,
switch designed to sit at the heart of corporate networks and run at an
impressive 40 gigabits per second of throughput, or speed.

Another product area moving from talk to market was layer 3 switching, a
way of intelligently routing data using silicon chips instead of slower software.
Industry leaders such as Cisco Systems Inc. (CSCO), Bay Networks Inc.
(BAY) and 3Com Corp. (COMS) have been rushing these products to market.

Cisco officials said Tuesday that layer-3 switching should be a $2 billion
market by 2001.

Last year's drawing-board promises also translated into more sophisticated
software and hardware for creating virtual private networks, "tunnel-like"
connections across private networks and the Internet that provide better
security and privacy for data communications.

Where last year there was "smoke and arm-waving," this year there are
actual solutions, said Grace Carr, vice president of corporate marketing at Bay
Networks Inc. (BAY). This year's products give service providers and
corporations the tools for easier, more sophisticated tunneling and for more
advanced monitoring of performance and security.

The market for virtual-private-network gear looks like a "rapidly growing"
one that should really take off in three to six months, Carr said. Market
researchers see it quickly reaching at least $1 billion.

Both Bay and Ascend Communications Inc. (ASND) introduced products for
virtual private networks at the show. Bay brought out its Extranet Switch 1000,
a product for companies with up to 50 simultaneous remote or branch-office
computer users who need to link to a central network. The product
incorporates modem functions, security such as user authentication and
abilities to manage the use of bandwidth, or connection capacity.

Ascend introduced a broadened business strategy for the market and software
that provides information on performance to network managers.

Internet service providers, meanwhile, are seeing more savvy customer
interest in higher quality service, such as firewall, encryption and certificate
security for data transmission.

"The awareness level is at such a point now (that customers) are definitely
more sophisticated," said Scott G. Lewis, Internet product manager at
CompuServe, a unit of Worldcom Inc. (WCOM).

Industry leaders also didn't lose any time drumming up interest in next year's
technologies. Talk focused on the greater use of fiber optics in network
backbones and on the evolutionary step to switching at layer 4, where, for
example, a CEO's e-mail can be given a higher delivery priority than e-mail
from accounting.

Today, however, sorting through the array of products and competing claims
remains a time-consuming task for customers. "There is so much technology
and 'fud' thrown at them," said Bay's Carr.

-Mark Boslet; 650 496-1366
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