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Technology Stocks : MRV Communications (MRVC) opinions? -- Ignore unavailable to you. Want to Upgrade?

To: WebDrone who wrote (15802)	9/16/1999 10:20:00 PM
From: Sector Investor	Read Replies (1) \| Respond to of 42804

OK. Now that we've seen how the Red-C and Redback products compare, let's examine them a bit more closely. What are the differences and how important are they? First, let me mention something that should be obvious, but may not be to everyone. This is how SIMILAR the two boxes are. This is very important too, for two reasons: 1) If you assume that Redback has a winning combination (and they have about 95 customers), then Red-C starts with the same winning combination, right down to physical dimensions, power, etc., then adds highly attractive features that are in demand right now. 2) The other good thing about being very similar (from both an investor and a customer perspective), is that switching vendors for existing customers would be relatively easy. Nbase-Xyplex makes this even easier by keeping the same 4 and 16 slot configurations. Now to the differences. (saving the best for last) 1) Red-C has a 300 Mhz Pentium II vs a 200MHz Pentium. Both are the slightly older MMX technology. But Red-C goes further, by proving a scalable architecture, including multiple processors, which unfortunately they don't elaborate on in any of the documentation available thus far. Obviously though, a customer likes to have their investment protected by being able to scale already deployed boxes without having to deploy new ones. 2) The architecture is also "open". This means that each carrier can customize Red-C to fit their needs, and also to offer distinguishing or value-added features. This will be one of the most desirable aspects of Red-C. 3) In the area of resilience and redundancy, Red-C has gone Redback one better, by allowing a hot-swap or add of a CPU. The power of the box can be expanded without taking the box offline. 4) Red-C handles Frame Relay based T1/E1connections, with add-drop multiplexer capabilities, so that pieces of the traffic can be channeled between ports. T1 (domestic) and E1 (European) are common data carrying connectivity. 5) WRED (Weighted Random Early detection) and WFQ (Weighted Fair Queuing) are advanced techniques for managing Internet traffic. Without getting too detailed, Random Early Detection (RED) employs techniques to maximize throughput when there is traffic congestion. It can distinguish between temporary bursts of traffic and excessive sustained load. "Weighted" RED combines another technique called IP Precedence with RED capabilities to provide differentiated performance levels for different classes of service, thus providing preferential handling for higher priority packets. WFQ is another technique that divides link traffic into high priority and low priority flows. Basically all you need to know is that these advanced techniques give customers additional tools for managing and differientiating their IP traffic. 6) Red-C adds two sophisticated but commonly used routing protocols in OSPF (Open Shortest Path First) and BGP-4 (Border Gateway Protocol 4 ) which I will not delve into, but which are in demand today. 7) Red-C adds Firewall protection, hardware based IPSec encryption, and multiple password levels. Redback does not. Enough said. 8) Red-C says they allow Web based management in addition to matching all the other methods that Redback uses. Enough said. 9) Red-C offers what seems like major enhancements to the Multicast Subscriber management capability (the main purpose of the box) by allowing Bandwidth control, time of day and On-demand billing capabilities. They don't elaborate, so I can't except to say that this allows customers maximum flexibility. 10) Now to the key difference VoDSL and VoIP. This is a MAJOR enhancement that is right there when customers are clamoring for it. From a report on Redback issued on 9/15/99 (yesterday) by Morgan Stanley Dean Witter, we see some very interesting statements: "[Redback's] digital subscriber line (DSL) rollouts were far more robust than expected. About 90% of [Redback's] units are now used to support DSL" "According to Redback, it's customers are requesting that it deliver new features, such as edge routing, virtual private networking (VPN) larger subscriber capacity, and potentially, Voice over IP (VoIP) capabilities. The company did not disclose any features under development, or that are not, but suggested that relative to other features, Redback is more in the evaluative stages of deciding what type of VoIP capabilities to deliver. The company also expects the VPN market to accelerate in about one year. MSDW views the prospect of RBAK adding these capabilities as an important step in raising average selling prices of the product." The bottom line is that Red-C is offering carriers and ISPs the features they really want. The pricing probably will provide another advantage, but I don't know RBAK's pricing structure. All in all, Red-C looks to be a real winner. And if RBAK is really just in the early stages (12 months?) of evaluating VoIP (someone just got their priorities adjusted), then MRVC has caught them with their pants down. And if DSL is really starting to explode ...