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Technology Stocks : BAY Ntwks (under House)

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To: Kenneth E. Phillipps who wrote (6759)6/24/1998 5:12:00 PM
From: Kenneth E. Phillipps   of 6980
 
Bay challenges Cisco to open up routing software

Bay plans open-routing attack
By Scott Berinato
June 24, 1998
PC Week Online



Bay Networks Inc. threw down the gauntlet to proprietary routing vendors amid plans to open up its own routing software.

The Santa Clara, Calif., networking company announced it has acquired routing code vendor Phase2 Networks Inc. and formed a new Open Routing Division. Formed by the meshing of Phase2 routing code with Bay's proprietary BayRS routing code, ORD will sell the combined code to anyone who wants it, including its competitors.

Bay's challenge to its fellow vendors, said Vice President of Business Development Paul Callahan, is simple: "Kill your own monolithic products and let competition win the day."

Traditionally, major router vendors Bay and Cisco Systems Inc. have offered proprietary software with their equipment. But software-based routers have fallen out of favor as routing switches, which embed routing in silicon on a faster, less expensive switch, have gained momentum. The bevy of startups that offer routing switches use open routing technology.

Callahan believes vendors competing on an open routing platform will foster a renaissance in traditional routing--similar to Ethernet's continued development after 10BaseT technology was made public. Specifically, he foresees a new generation of routing devices tailored to directing traffic on the public network.

Calling the Bay/Phase2 combination "the first open alternative to Cisco IOS [Internetwork Operating System]," Callahan challenged Cisco to follow suit and open its routing code to the masses.

"This is the beginning of the nuclear war," Callahan said. "It's not an accident that we're opening routing up. This is going to force [Cisco's] hand. This is competition."

Cisco officials in San Jose, Calif., were not immediately available for comment.

Phase2, a small, privately held company, makes open and portable routing code that many major networking vendors use in products ranging from SOHO (small-office/home-office) routers to high-end routing switches. The code is processor- and compiler-independent; modules based on the technology can be configured in many ways depending on a hardware vendor's needs, said Jeff Pickering, president of Phase2, in Durham, N.C.

Bay, previously a customer of Phase2, has already integrated much of BayRS with Phase2 technology. In August, the company plans to provide details on when the open routing code will be available, officials said.

The strategy is "quite clever," said Michael Speyer, an analyst with The Yankee Group Inc., in Boston. Speyer tempered his excitement, however, noting some real-world issues that still need to be hashed out.

Many vendors will likely pick up the routing technology for low-end SOHO routers, further commoditizing that market, Speyer said. But "ultimately, whoever puts [the Bay/Phase2 code] in a new routing box still has to prove it's interoperable in an existing network environment," he said. "At the higher end, Cisco and Bay dominate existing network environments, so no one will enter in a hurry."

Bay's announcement comes on the heels of the merger agreement it signed last week with Northern Telecom Inc. Terms of the Phase2 deal were not disclosed.

Bay can be reached at www.baynetworks.com. Phase2 is at www.phase2net.com.

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