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To: SteveG who wrote (306)	2/3/1998 4:19:00 PM
From: SteveG	Read Replies (1) \| Respond to of 3299

<..Nortel hasn't been an acquirer so that seems unlikely..> ===== Nortel Eyes Acquisitions As Part Of Data Networking Push PALO ALTO, Calif. (Dow Jones)--Northern Telecom Ltd. (NT) said it is eying acquisitions as part of a new push into the data communications market. The telecommunications equipment supplier is looking particularly at acquiring fibre and 100 megabit Ethernet technology, said F. William Conner, president of Nortel's newly formed data networking unit. On a conference call with reporters, Conner described acquisitions, as well as partnerships and internal research and development, as the means Nortel will use to expand its product portfolio. The company already markets the Passport family of wide-area-network switches in addition to IP, or Internet protocol, voice products from its Micom subsidiary. In an announcement Monday, Nortel said it was forming a new division with 3,000 employees to focus on the data networking market.

To: SteveG who wrote (306)	2/5/1998 2:00:00 AM
From: SteveG	Respond to of 3299

<A> Cisco Goes It Alone Into WAN To Keep Growth Rate Up By Mark Boslet PALO ALTO, Calif. (Dow Jones)--Cisco Systems Inc.'s (CSCO) interest in selling WAN, or wide area network, equipment to telecommunications carriers, Internet service providers and corporations is not new. But the networking equipment supplier's willingness to go it alone in this potentially large market is. At stake are the spoils of a lucrative market for a new generation of networking gear - equipment meant to integrate data and voice in one network. Such a change would essentially relegate today's massive phone system as a branch of a much larger and faster entity. And while it is not clear whether Cisco will be able to dominate this market the way it has the markets for Internet routers or local area networking equipment used by corporations, one thing is clear. The company is positioning itself to catch a wave of product adoption expected to gather momentum in the next 12 to 18 months. Cisco has made no secret of its interest in partnering with Lucent Technologies Inc. (LU) and Northern Telecom Ltd. (NT) to sell to the North American market. Chief Executive John Chambers says he continues to work toward this "aggressively," and already, Cisco has struck deals with telecommunications companies Alcatel Alsthom (ALA) in Europe and NEC Corp. (NIPNY) in Japan. But neither North American company appears interested in forging a partnership with the company, which it views as a potential invader of its core markets. So the San Jose, Calif., company announced yesterday a do-it-yourself strategy that will sharply increase its hiring of engineers and sales staff, as well as bump up development and distribution spending. The reason is obvious. For Cisco to maintain its growth rate - the company's revenue grew from $714 million in 1993 to $6.4 billion in fiscal 1997 ended July - it needs to reach into new markets. With a projected $90 billion in annual revenue, the market for voice and data equipment fits the bill. But it also requires moving quickly. Hesitating will give competitors - start-ups and existing companies - the all-important opportunity to get to the market first, Chambers has said. And Lucent and Nortel are no laggards. Both have efforts to rev up their sales of data networking gear well underway, with Nortel announcing yesterday it is hunting for acqusitions. The integration of "voice and data is the new mantra" in the industry, said Tim Luke, an analyst at Lehman Brothers. "You're going to see Cisco, Lucent and Nortel pursue this very hard." With growth of its core router business having slowed over the past year or so, Cisco will hire 1,000 to 1,500 people in the next three to four months, about double its original plans to add 700 over the period. It also said spending would climb to 34% of revenue over the next three to five quarters, up from 32.7% in the second quarter ended January. Much of the increase is to be focused on research and development. "I don't have any doubts Cisco will put a stake in the ground, and I wouldn't want to be in its gun sights," said analyst Andy Schopick of Nutmeg Securities. In fact, it already has staked out some ground. In 1996, Cisco acquired StrataCom, the maker of powerful frame relay and ATM switches for the WAN. More recently, the company picked up little Ardent Communications Corp. In addition, its first products supporting voice and data are coming out, including router modules supporting voice traffic and the company's 3800 access platform, which uses frame relay or ATM switches to send phone conversations. The company has been headed in this direction for a while and this is where its growth will come from now, said Chris Stix, an analyst at Cowen and Co. ======= Fwiw, Chambers gives keynote address at H&Q Comm Symposium tomorrow 7:35 -8:05, then is on panel discussion "The New Central Office".