Ascend expects to grow, but not exponentially
Sunday, March 01, 1998
By MICHAEL O'CONNELL, Sun Staff
WESTFORD -- If Ascend Communications wants to add 2,400 workers in Westford, as was reported in a
front page story in The Sunlast week, it's got a lot of work to do.
The story grew out of comments made by public officials at a Westford selectman's meeting in a discussion
of a request for state money to build a road to the office park where Ascend now employs 460.
There were no representatives from Ascend nor from The Chiofaro Co., the developer, at the meeting.
But interviews since then make it clear that, considering Ascend's present size, growth rate and position in an
increasingly competitive industry, no one inside or outside the company is laying any large bets on
accomplishing that kind of expansion.
"The only timetable we're looking at in terms of headcounts is over the next 24 months," Schneider said in an
interview last week. "We won't be adding 2,400 anytime in the next 24 months. We are growing, but in
Westford we won't hit those kind of numbers."
That's not to say Ascend isn't studying the possibility of a big expansion in Westford. Schneider said
Ascend's in-house real estate staff has put together expansion models for each of the company's large
locations -- the San Francisco Bay Area, Minnesota, Salt Lake City and Westford -- in case the company
needs to move fast to lock up space in a tight market.
But he wouldn't discuss how many people the company could employ in particular locations if business took
a sharp upturn.
"We have to have a handle on what's possible, and not just in Westford," he said. "Both Cascade and
Ascend have had facility crunches in the past and we don't want to get caught short."
Almeida, Calif.-based Ascend makes equipment that pushes information across the Internet and other
wide-area data lines. It established its presence in Massachusetts last summer, when it purchased the
fast-growing Cascade Communications of Westford.
Ascend's growth plans shape up as an important issue over the next few years, and not only for the
company. The plans will have a bearing on the development of what could be the biggest office park in
town, and on the town's attempts to improve the traffic flow along Route 110.
Ascend has never given out a 2,400-job projection publicly. Town officials came up with the figure
themselves. Town Manager Glenn Fratto said the company has discussed with local officials the possibility
of filling up a whole 1.1-million-square-foot office park that's being planned in Westford. A consulting group,
the Northern Middlesex Council of Governments, estimated that the buildings that remain to be built could
hold up to 2,400 workers.
Ascend currently rents 320,000 square feet in the Nashoba Corporate Center's only building.
Cascade signed its deal with The Chiofaro Co. to rent the former Concurrent Computer building in
Westford in December 1996, before Cascade was sold to Ascend. Back then, Cascade officials talked
openly of wanting to expand into other buildings that Chiofaro would build in the park.
Mark Roopenian, a Chiofaro broker that's overseeing the leasing on the Westford site, said Ascend hasn't
committed to taking the whole park. But he said the developer has a tacit agreement to give Ascend the first
call on any of the buildings that get built there.
"We're working with Ascend to accomodate their expansion needs," he said. "The park was intended to
accomodate Cascade (and now) Ascend. But any expansion talk right now is preliminary in nature."
A 2,400-job expansion could best be described as a dream situation for Ascend.
There aren't many precedents for this kind of growth. Sun Microsystems -- the California company with
21,500 workers worldwide, $7 billion in annual revenues and $760 million in annual profits -- is building a
million-square-foot campus in Burlington. Sun said the site could employ up to 4,000 there in several years.
The company currently employs 1,300 in Chelmsford and a different Burlington site.
But Ascend isn't as big -- or as successful -- as Sun. Ascend struggled a bit last year, losing $49 million in
the June quarter, when a software glitch delayed sales of an important data switch product. The company
rebounded the next two quarters to post a $101 million annual profit on sales of $1.1 billion.
The company currently employs 1,800 -- worldwide.
A pair of analysts who follow Ascend said they expect the company to grow and post decent results over
the next year. But they said they would have a hard time projecting what kind of real estate expansions
Ascend might take on.
"It's just so hard to say what companies are going to do to structure their own business," said Brendan
Hannigan, with Forrester Research in Cambridge. "So many things can happen."
Ascend could buy other companies, keep the units in the same places and add employees there. Or, if it
buys a block of companies in Greater Boston, it could merge all of the new operations into Westford, like
Cisco Systems of California did in building up its 350-employee Chelmsford site. That could increase
employment here by decent amounts, but it wouldn't be creating new jobs.
Schneider said the company plans to continue to pursue acquisitions, but he declined comment on whether it
expects any deals in the Boston area. |
