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Technology Stocks : Redback Networks, Inc. (RBAK) -- Ignore unavailable to you. Want to Upgrade?

To: Lao Ou who wrote (1346)	2/5/2000 12:46:00 PM
From: Johnny Canuck	Read Replies (1) \| Respond to of 1956

To: BxK (18665 ) From: BxK Friday, Feb 4 2000 9:11PM ET Reply # of 18672 Nortel Taking Aim At Redback <<February 4, 2000 Nortel Taking Aim At Redback By Joe McGarvey, Inter@ctive Week Similar to just about everyone else making subscriber management hardware, Nortel Networks has declared open season on market leader Redback Networks. Nortel on Thursday unveiled a promotion that will enable service providers to exchange what company officials call first-generation subscriber management systems for Nortel's Shasta 5000 Broadband Service Node. The one-for-one exchange is designed to supply service providers with equipment better able to handle the expected surge in broadband access subscribers, according to Keerti Melkote, director of product management for the Internet Protocol services business unit at Nortel. "The first-generation systems that service providers are using are not scaling to the number of subscribers they expect to sign on in the next year," Melkote said. While Melkote said the upgrade offer applies to all subscriber management devices, the vast majority of installed hardware is made by Redback, which has more than 100 customers. The first to see a need for a device designed to manage the broad streams of data traffic flowing through a service provider's network from cable modems and Digital Subscriber Line equipment, Redback has virtually had the market to itself for the past year and a half. In that time, the company has managed to penetrate several large networks. Most recently, the company won a multimillion dollar deal to furnish the subscriber management devices for Bell Atlantic's DSL services. As a result of its early success, Redback is in the sights of nearly every would-be competitor. In January, French telecommunications equipment giant Alcatel declared its intention to take on Redback with the introduction of its OneStream Broadband Access Server. Both Alcatel and Nortel are taking a similar tack in promoting their respective equipment as being more powerful and scalable than Redback's Subscriber Management System. Melkote said the Shasta 5000 can initially handle 32,000 subscribers and is capable of scaling beyond that number; Redback's device will handle about 8,000 streams, according to company officials. Melkote added, however, that a subscriber management system's key asset is the ability to be the center of intelligence in the network. Heavily loaded with processors, the Shasta 5000 is designed to apply specific traffic-handling instruction to incoming data. The ability to recognize and prioritize traffic or specific users is the key to offering value-added services, such as firewalls and virtual private networks, Melkote said. Nortel's upgrade program, in fact, is based on confidence that service providers are ready to roll out these types of premium services. Although Nortel stands to take a hit in revenue should a substantial amount of service providers decide to trade in their existing gear, Melkote said Nortel will make up for its losses through feature upgrades that enable service providers to deliver value-added services. "The revenue is around value-added services," Melkote added. "When they want to deploy these services, we can charge them for that." The window of opportunity for Alcatel, Nortel and others to take advantage of any potential technological lead over Redback's hardware, however, might not be open much longer. Redback's vice president of marketing, Larry Blair, said Redback plans to introduce a second-generation subscriber management box sometime in March.>> zdnet.com.