EXTR stuff......
Extreme Networks Has Faster Switch; Will Be Clearer on Claims
10/22/00 7:15:00 AM
Source: Bloomberg News
URL: cnetinvestor.com
Santa Clara, California, Oct. 22 (Bloomberg) -- Extreme Networks Inc. said it had a breakthrough: Its switches were powering the first computer networks running 10 times faster than others on the widely used Ethernet standard.
''Providing customers with unprecedented speed for Internet access, these new 10 Gigabit Ethernet metro networks reveal a breakthrough in networking,''' an Extreme press release announced on Wednesday.
Yet 10 Gigabit Ethernet technology, as defined by the networking industry, isn't available yet. Extreme said its product can actually send a maximum of eight gigabits of information at one time at a 10-gigabit speed, rather than the full 10 gigabits at that speed that future products will do.
''I am going to try to be more clear in how we pitch this from now on,'' George Prodan, Extreme's vice president of worldwide marketing, said in an interview after Bloomberg News inquired about the claims. Still, the new Extreme offering ''is like a milestone in the industry,'' he said.
Extreme shares rose $4.56 to $99.38 on Friday. They've more than doubled this year. On Wednesday, the Santa Clara, California- based company said sales in the latest quarter more than doubled to $119.3 million.
Technology
The technology works like this: A device called a WDM module, when installed in Extreme's switch, sends eight one-gigabit light streams at once over optical fiber. One gigabit is equal to 1 billion bits, the ones and zeros of digital communications.
''This WDM module gives us the speed of 10 gigabits with the aggregate bandwidth of eight,'' Prodan said. WDM stands for wavelength-division multiplexing.
Some large telecommunications networks already run at 10 gigabits a second. They use a costlier technology known as Sonet and gear from vendors such as Nortel Networks Corp.
Faster, Bigger
Extreme's method can provide eight times more data capacity than Gigabit Ethernet, and at a speed 10 times as fast, Prodan said. It doesn't, though, fit the definition of 10 Gigabit Ethernet that networking-equipment makers, including Extreme and Cisco Systems Inc., are developing now.
''That is not true 10-Gig Ethernet,'' said Bobby Johnson, chief executive of Foundry Networks Inc., one of Extreme's closest rivals, using the industry shorthand for the technology. ''It's not even based on where the standard is going.
''I wouldn't call it false advertising,'' Johnson said. ''I would just say many of the technically elite in the industry know the difference.''
Extreme's 10-Gigabit claims date back at least to January, when a press release said the company's then-new BlackDiamond 6816 switch offered ''the industry's first 10 Gbps (gigabits per second) Ethernet connection.''
Standards Later
Analysts don't expect the first true 10 Gigabit Ethernet products to be out until next year. Last month, engineers agreed on a draft of a standard for how the switches will communicate. It won't become official until 2002.
At stake is a market expected to be worth billions of dollars. The first company with a 10 Gigabit Ethernet product could reap the greatest rewards.
In 2001, the first year of shipments, sales will be $170 million, increasing to $1.9 billion in 2004, according to researcher Dell'Oro Group. Sales of Gigabit Ethernet equipment, which began in 1997, are forecast to double to $2.4 billion this year and reach $8.6 billion in 2004, Dell'Oro said.
Extreme's press release Wednesday named two customers for its 10-gigabit equipment: IntelliSpace Inc. of New York and Yipes Communications Inc. of San Francisco. The companies, both closely held, provide Internet hookups to businesses using Extreme gear.
Customers
Yipes Chief Executive Jerry Parrick said his company has been testing the Extreme 10-gigabit gear and is ''satisfied that it significantly expands the amount of bandwidth available to customers.'' However, he added, ''I am not going to advertise it as a 10-gigabit capability.''
IntelliSpace, which announced its 'ཆ Gigabit'' network in July, declined to comment.
Chase H&Q networking analyst Erik Suppiger said Extreme may not deserve criticism, since ''you're still getting the leverage of the fiber.''
''All these guys, they can't wait until the standard comes out, so they've got to come out with their own proprietary solution before that,'' said Suppiger, who rates Extreme stock a ''buy.'' ''I think they're all going down the same road.''
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