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Technology Stocks : Newbridge Networks -- Ignore unavailable to you. Want to Upgrade?

To: Brett Nelson who wrote (4340)	5/2/1998 1:58:00 PM
From: pat mudge	Read Replies (1) \| Respond to of 18016

On a scale of 1 - 10 (1 being best) what was your overall impression of NN at the HQ conference. It seems the stock might be ready to turn itself around technically, but I would be interested in your more fundamental view. Brett -- Let me alter your request slightly and rate NN's global position as a networking company rather than its H&Q presentation --- which was great, but beside the point in terms of where it's headed. For the last few days there's been a discussion on the Ascend thread about the different networkers, specifically Cisco versus Ascend, and it's occured to me there's something missing. It's not just technology and overall solutions that give a company a leadership position. It's not even that plus management, though that's important. I'm a novice so correct me if I'm wrong, but from my perspective, the factor most often over-looked is global positioning. The best parallel I can find is Britain. They once ruled the world. In the late 19th century, Victorians claimed "The sun never sets on the British Empire." Fast forward to the end of the twentieth century and you find a nation smaller than the state of Oregon with a GDP $1.19 trillion (vs. US $7.61, China 3.39, Japan 2.85, Germany 1.7, and France 1.22] that, amazingly enough, is ranked fourth in the world for industrial power. Without a knowledge of world history, one could well ask why? For lack of a more sophisticated word, I'll call it global presence. The same indefinable element that made American tycoons marry their daughters off to British aristocrats. Power, clout, influence, presence --- call it whatever you want --- the Brits had it and the Yanks didn't. It's the same with networkers and telecommunications vendors as they face a converging industry racing to meet a seemingly insatiable demand for bandwidth. It's not enough to have the best technology. It's not enough to have the finest management. It's not enough to have the most entrenched presence. It takes them all. And to accomplish this, companies have to combine their strengths. I'm sitting here watching the clock, with a deadline to meet, so won't get to pursue my thesis the way I'd like. But to answer your question about Newbridge's position, I think they saw the writing on the wall several years before their competitors. Perhaps because Terence Matthews was educated in the British system and steeped in its history --- and in the history of its subjects from a nationalist perspective --- he could grasp the global picture and what it would take to win against the odds. I don't know --- a subject for another day. As for Newbridge, they began developing ATM before the competition, they recognized the need for a powerful alliance before the others and aligned themselves with the largest telecommunications company in Europe --- Siemens. When that decision was made, Matthews may have decided the FCC and the RBOC structure in the US would make them slower to change and so went with a European partner. Again, I don't know, but Europe has been quicker to adopt ATM and the choice of Siemens seems to have been right. Newbridge is ahead in ATM development, it has a global partner with a strong presence not only in Europe but in Asia and beyond, and they have talented, committed management. Terence Matthews owns approximately 25% of the company and from all I've heard, this intelligent, fiery, assertive Welshman has what it takes to make his company the world leader in the exploding area of data and voice communications. Just for fun, check out international offices for all the competing companies. Now, I'm off to Orange County for the day --- Linds wanted a shopping trip for her 19th birthday, so a shopping trip it is. Later -- Pat [http://www.odci.gov/cia/publications/factbook/index.html ]