Frame Relay is the predominant protocol used by enterprises for internal WAN networking - cheaper service than dedicated private lines, cheaper to implement and operate than native ATM, more secure, manageable and predictable than pure IP. Today frame relay services deliver more than 10 times more revenue than native mode ATM services for telecommunications providers. Of course, the most cost effective way for a carrier to implement frame relay networks is on a multi-purpose ATM backbone network. This backbone network carries frame relay and ATM (and for many carriers IP) today, and may carry PSTN voice traffic tomorrow.
Nearly every incumbent carrier in the world's developed economies have either recently chosen a multi-service ATM backbone provider or will within the next 12 months. The following carriers appear to have made their decisions for their next-generation ATM vendors - BellAtlantic, GTE, Bell South, WorldCom/MCI, AT&T(domestic), Qwest, Frontier, Level3, Williams, NTT - All Ascend; SBC/PacTel, Stentor, Cable and Wireless, Deutsche Telekom - All Newbridge. Several carriers have made initial purchases but still are considered up in the air - British Telecom, France Telecom, USWest, Sprint, various consortia (e.g. global one pan european network). Once a network gets up and running, it is nearly impossible to displace an incumbent.
FORE's ATM sales to carriers have all been as a single service high-speed backbone for Internet traffic - the most notable customer being UUNet. They do not have the breadth of service capabilities or feature functionalities of an Ascend or even a Newbridge. Their sales to carriers are a tiny fraction of carrier market leader Ascend, #2 Newbridge, #3 Cisco or #4 Nortel. They have no leverageable incumbent relationships. Their technology, in the context of the needs of the service provider network, is WAY behind technology leader Ascend.
At its recent analyst meeting, Lucent laid out a map of where it wanted to go. A critical piece of that vision was leadership in multi-service ATM carrier networks. Within a year, every one of the customers that I listed above will have begun installing their next generation networks to the point of no return. Carriers are expecting these networks to last them at least 5 years, at which point optical switching and other next-next-generation technologies may be a reality. In the meantime - game over. Realistically, if LU is serious about wanting to be a carrier data equipment leader it can A) buy Ascend for what ever it takes, and instantaneously become the #1 provider of carrier data networking solutions with the best products AND the most impressive customer list in the industry; or B) buy Newbridge and hope you can fix a 36170 product line that has serious deficiencies (poor density, insufficient processing power to implement the differentiating features demanded by customers, poor throughput, buggy software, high costs) before its still formidable customer base deteriorates further.
Personally I hope LU antes up for ASND and gets it over with fast. I don't care if it is dilutive - I'm willing to wait. Now is the time to take the fight to Cisco, before they can build a foothold. |
