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Technology Stocks : BAY Ntwks (under House) -- Ignore unavailable to you. Want to Upgrade?

To: bgg who wrote (5459)	4/20/1998 5:03:00 PM
From: Kenneth E. Phillipps	Read Replies (2) \| Respond to of 6980

I am a relatively new investor in network equipment stocks. I am trying to understand the market in this sector. I notice that QWEST split their recent order by ordering IP equipment and services from CISCO and ATM/Frame Relay equipment and services from ASCEND. Is ASCEND a player in IP equipment and services? What would be the reason for QWEST splitting their order in this manner? Does the recent problem at ATT with frame relay have anything to do with QWEST purchasing ATM/FR from ASCEND? While Ascend and Cisco battle it out in the core switching market, will this help BAY? Ken Phillipps

To: bgg who wrote (5459)	4/21/1998 7:38:00 AM
From: A. Fineigler	Read Replies (1) \| Respond to of 6980

Cisco is not the biggest and most successful because of product quality - quite the contrary, their products often come near the bottom rankings in independent laboratory tests (see Network World for numerous test results). They are the biggest because they are the biggest ... the old IBM syndrome where "nobody ever got fired for buying Cisco equipment" ... and as you said they have the complete solution with all the necessary components, making it easier for IS departments to manage their purchases. The industry is now mature enough where sales and marketing are more important than technology, as companies leapfrog each other's technology and buyers want a stable relationship with their suppliers more than they want absolute leading edge technology. Re Bay, I think House will succeed and Bay will do well, but it is not in the cards for them to supplant Cisco any time in the foreseeable future. AF

To: bgg who wrote (5459)	4/21/1998 12:58:00 PM
From: The Phoenix	Respond to of 6980

bgg. Bay raises awareness of the technology...invents it...spends the money to peak interest and then Cisco comes in and takes the business anyway. hey, it's OK if BAY wants to take the arrows for Cisco. Cisco is very wise in this way. They watch competitors attempt new things and learn from their mistakes, then they come in and do it better. That's one of many things that make Cisco unique. Stockman contends that Cisco is not an innovator - that they follow the market. Well, this clearly is not the case when it comes to multiservice layer 3 nets. You see, companies like BAY tweak/play with currently technology..attempting to improve on it. Cisco is out there "changing the rules" completely. Even so, we have to remember that cisco has much more to lose with it's huge installed base than does companies like BAY. BAY can afford to take chances with technology...after all they have little to lose. Cisco on the other hand has a lot to lose and therefore must take a much more sane and methodical aproach to rolling out new technology. So, while BAY is busy reinventing the router by placing routing tables in silicon...Cisco is out there creating more value for customers by allowing existing L3 environments to support multiservice voice and video... Now, what do you think users care more about. Saving money by integrating all their traffic or putting in a faster "router"? Of course there are those that will indeed opt for the later but it's a much more difficult "sell" to corporate CFO's. The payback almost impossible to calculate. However showing a clear cut payback by eliminating mulitple lines or dial charges...allowing the capital investment to pay for itself is a no brainer sell. Cisco is leading this charge - CREATING this market and is way ahead of the competition. You see, Cisco understands customers...understands their motivations and builds solutions to address these rather than technology for the sake of technology. Gary