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Technology Stocks : Cascade Communications (CSCC)

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To: MMW who wrote (2048)2/4/1997 12:38:00 PM
From: Thomas C. White   of 3743
 
I think you'll find that actual amt of ATM operational infrastructure in carrier networks corresponds to your evaluation of CSCC (I believe STRM has similar position). These two companies pursued strategy of building next gen frame switches as ATM backbone switches which have frame ports.

RBOCs and major independent telcos (largest overall switch users) originally conceived plan back maybe 6 years ago to implement ATM networks by having major CO switch providers such as NT, ATT, etc build ATM functionality into the "big iron" CO switches (Class 5, Tandem etc.). This fit with their overall telco network model. So all these high capacity switch mfrs chased endlessly on this business model. FYI, Fujitsu FETEX product was actually the first CO level switch to have native ATM capability (they had developed probably first proprietary ATM chipsets). Fujitsu spent about 4 years and probably $100 million to homologate into RBOCs. This was a dismal failure. Fujitsu had no historical relationship with RBOCs and was viewed as outsider; also telcos began to see that this approach would force them to entirely replace their existing CO/tandem switched network at cost of gazillions. Also this was the time of NT's major "software flop" back a couple of years ago, which screwed up NT's development/marketing effort in this direction. Also telcos' original idea was to move to port all traffic to ATM; however, ATM forum has been very slow to agree on all necessary parameters for handling voice traffic.

Subsequently CSCC and STRM began building ATM with frame subscriber interface. These systems were homologated in customers as beta sites long before they were actually showing up as sales. ATM market is now clearly data driven, and it may be years before most voice traffic is carried over ATM. So these companies' penetration of ATM market will be fait accompli. Nobody can wait for voice over ATM issues to be resolved before offering ATM to customers. A number of other major telco eqpt suppliers tried to emulate this "stand alone ATM" network model, including Fujitsu (which subsequently released ATM platform separate from CO switch) and Tellabs. So far my understanding is that nobody has been able to get a major piece.

Eventually I think the war will be over the issue of whether "big iron" switches become obsoleted and the switched network migrates to ultra high capacity ATM offered by CSCC/STRM with customer interfaces delivered by products such as AFCI's UMC series.

FYI, you actually have to be careful about various companies' claims in this area, especially NN. NN is basically an enterprise multiplexer supplier, has been and always will be, they have a tendency to "stretch" the definitions of their participations in various markets such as frame, ATM and SONET cross connect. Because of this there is some substantial skewing of their market share in various technology areas by "double counting."
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