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To: djane who wrote (46145)	5/7/1998 2:05:00 AM
From: djane	Respond to of 61433

WorldCom's Sidgmore: face to face with a rampaging Net By Erica Schroeder, PC Week Online 05.06.98 10:30 am ET zdnet.com LAS VEGAS -- If you're not scared, you don't understand. That's the mantra of Internet service provider UUNet Technologies Inc.'s President and CEO John Sidgmore. And in the face of skyrocketing demand from users, a furious rate of network growth and several mammoth-sized mergers to navigate, Sidgmore is one scared, yet happy, executive. In his keynote here at NetWorld+Interop on Tuesday, Sidgmore, whose company has been buoyed by the tremendous growth and demand for Internet services, described the impact of that demand as well as forthcoming technologies and services that will keep the pace of growth unabated well into the next century. "No matter how you measure it, the Internet is growing like crazy," Sidgmore said. "The point of acceleration of growth was only in 1994 with the unveiling of the World Wide Web. Three or four years ago, no one knew what the Internet was. This is a very young industry with a long way to go." Like his keynoter counterpart, 3Com Corp. CEO Eric Benhamou, who spoke earlier in the day, Sidgmore presented his variation on Moore's Law to explain the rate of growth in the Internet access market. While Moore's Law asserts that CPU performance doubles every 18 months, the performance of the Internet doubles every 3.5 months, Sidgmore said. At that growth rate-1,000 percent a year-Internet traffic will soon consume half the available bandwidth on networks worldwide. By 2002, the percentage will climb to 90 percent, and in 2008 Internet traffic will account for 99 percent of the data traversing international networks. "It represents a [network] scaling challenge unprecedented in history," said Sidgmore, who estimated that in three years UUNet's own network will be running at speeds 1,000 times faster than they do today. Over the last year alone, UUNet has increased its international network capacity by a factor of three, and its long distance network has doubled in size. That demand is for the most part being driven by new subscribers and users. Bandwidth-intensive applications such as video have not yet begun to impact networks. "When those [applications] come, we may see even bigger demand," Sidgmore said. Because the rate of Internet growth is so high, and telecommunications market deregulation in the U.S. and overseas is opening previously closed markets, the opportunity exists for new players to arise and provide services to users, said Sidgmore, whose parent company WorldCom Inc. is, not surprisingly, one of those very players. "The old order in telecommunications that has ruled for 100 years is being overturned," Sidgmore said. "This is a world where agility wins, where speed to market wins. New players will shake up the industry. The telecom industry is up for grabs." Thanks to that revolutionary regulatory change, combined with the Internet phenomenon, users will see prices for services fall as well as a plethora of new services, he added. Those changes and opportunities are the framework shaping WorldCom's pending merger with MCI Communications Corp., as well as its CompuServe/ANS Communications Inc. acquisition last year. "We are in the middle of probably the biggest change in the history of communications," Sidgmore said. "Perhaps the biggest change in history, period." "Twenty years from now, people are going to look back at this time as the golden age of communications."

To: djane who wrote (46145)	5/7/1998 2:09:00 AM
From: djane	Respond to of 61433

PCWeek article. Even the mighty can fall. CSCO Layer 3 switching problem By Michael Surkan 05.04.98 zdnet.com Cisco dominates the router field today, but the company is making serious miscalculations on the importance of Layer 3 switching, which will make it vulnerable to a variety of nimbler--and hungrier--competitors. It's almost mid-1998, and Cisco still does not have a decent Layer 3 switch offering (other than its massively over-engineered and expensive high-end Catalyst switches). It makes me wonder if Cisco has any decent Layer 3 technologies on the drawing board. From the vantage point of vertically challenged competitors, such as Bay Networks and 3Com, Cisco Systems must seem like a 500-pound gorilla ready to pounce. Considering the drubbing router vendors have been taking at the hands of Cisco over the past several years, these vendors might consider their prospects bleak. But they shouldn't despair. The router industry is going through a paradigm shift with the advent of Layer 3 switching, and the long-term success of the players will depend largely on how well they respond to change in the next couple of years. Layer 3 switching is not just some exotic technology of importance to a few super-bandwidth-hungry companies; rather, it represents what routers will become in the not-too-distant future. It won't be long before there is no distinction between a router and a switch, since for all intents and purposes, they will be the same thing. Castles in the air Cisco has built its business on the premise that the ultimate solution to thorny networking problems lies in sophisticated software running on high-speed, general-purpose CPUs. The entire Cisco product line has been crafted to exploit this strength in software by standardizing all its wares on a single operating system, its proprietary Internetwork Operating System. In the process, however, Cisco has missed the advances in chip design that have allowed the embedding of consistently more complex logic in raw silicon. Rather than offering network managers impossible choices between capability and performance, Layer 3 switches deliver it all: the performance of a traditional Layer 2 switch with the functionality of a router. Unfortunately, it's not clear that Cisco's competitors fully understand these implications themselves. The Layer 3 switches currently on the market all lack critical features that would allow them to replace routers. Blinding speed is nice, but what Layer 3 switches sorely need are such refinements as WAN ports for T-1, T-3, ISDN and OC-3 connections (to name a few). The software intelligence on Layer 3 switches is also missing basics, such as Classless Inter-Domain Routing and the Boundary Gateway Protocol. Cisco's genius has been in its ability to use a consistent software technology across all its hardware. By contrast, 3Com and Bay wound up with a hodgepodge of disconnected solutions from various acquisitions. In order to exploit their early lead in Layer 3 switching, Bay and 3Com must first understand how to build coherent and complementary product strategies. Unless the Layer 3 switch vendors start realizing that their products are actually super-fast routers and target that market directly, Cisco might just wake up and see what's going on. What do you need in a Layer 3 switch? Contact me at michael_surkan@zd.com. Send E-mail to PC Week \| Copyright notice

To: djane who wrote (46145)	5/7/1998 2:15:00 AM
From: djane	Respond to of 61433

Interview with Lutz on CPQ networking plans May 04, 1998, TechWeb News techweb.com Adding 'Wood Behind The Arrowhead' -- Alan Lutz, senior VP/general manager, Compaq By Compaq is trying to turn success in the PC space into success in the networking space. Most industry watchers expect Compaq to buy networking companies to get the products it needs, but the company will do fewer acquisitions in the future, according to Alan Lutz, senior vice president and general manager of Compaq's Communications Products Group. InternetWeek senior editor Jeff Caruso recently talked to Lutz about what it takes to break into the big leagues and why Compaq would rather partner than buy. InternetWeek: How big does Compaq want to get? You have said that Compaq is a pretty solid Tier 2 networking player. What is Compaq doing to get into the top tier? Lutz: The first step is to develop and increase the effectiveness of our own indirect distribution channels for selling networking gear. If that can be put in place and made effective enough that our desire for revenue growth can be accommodated by those channels, then there's no need for a major acquisition. We very actively seek development partners that can provide us technology and/or product that we have not developed ourselves. InternetWeek: So you go to them for innovation? Lutz: Oh, sure. Some people have said, well, Compaq you just introduced two gigabit switches...but you didn't invent it yourself, so why should we pay attention? And I say, why should I bother to invest significant R&D to build up ASIC teams that are focused on switching, and pay an 18-month gestation period for development, when I can ally myself with somebody like Extreme Networks and solve that problem right away? Compaq has been allying with solution partners for several years, and we actually like that model. InternetWeek: Does that mean Compaq becomes mainly just a reseller? Lutz: No, that means that we spend a lot of time thinking about what we want to invent and what we don't want to invent. InternetWeek: How do you choose what you develop yourself and what you partner for? Lutz: One step is take a look at what's hot in the marketplace. Remote access is very hot. Because it's so tightly aligned with people who use PCs, both portables and desktops, that's just a collaborative sale. So there's a natural technology reason to be there and a natural sales and marketing reason. InternetWeek: You don't think that Gigabit Ethernet falls into that category? Lutz: Oh, yeah. And that's exactly why [our] two major strategic thrusts for 1998 are remote access and Gigabit Ethernet. We found that in selling lower-speed switches, customers always ask, do you have the backbone also? If you don't have the backbone, then you have an impediment to natural interaction with the customer. InternetWeek: If Gigabit Ethernet is one of the key strategic thrusts for you, then why outsource that? Lutz: Right now, you've got options in Layer 2 and Layer 3 switching. Some people think Layer 4 is coming, and if you were going to anticipate the marketplace, you should be investing your R&D in more sophisticated switching. And that's where we actually are putting the wood behind the arrowhead. InternetWeek: You said you're favoring partnerships at this time, but would you make acquisitions of, say, Extreme or some of the other Gigabit Ethernet vendors, or possibly Cabletron? Lutz: The multiples on large networking stocks right now are very high-in fact, higher than Compaq. Without a great deal of synergies, that makes the acquisition dilutive. The more dilutive an acquisition is, the more carefully you should investigate it. That just right now augurs for caution. There are an enormous number of smaller companies that have great technology. What they lack is marketing and sales. With that flow of product ideas, I thought we should concentrate our activities on making our distribution capabilities in networking as strong as our distribution capabilities in PCs. If we can do that, there may not be a need to do a large acquisition in order to achieve Tier 1 status. InternetWeek: OK, but you mentioned remote access, and a lot of the Tier 1 players are moving further into the WAN. How far can Compaq get into that space? Lutz: The more Compaq moves into the public WAN space through this access activity, the closer we get to the equipment that is used by the service providers to allow people to access and to concentrate that traffic and move it through the network. That's a natural move for Compaq. I've got to be a little careful here. We have several insights into what's going on, and that's a natural space for us. InternetWeek: Would you get into WAN switching gear-ATM, frame relay? Lutz: I think there are partners available to us that are already very strong in that area. I wouldn't think that it's particularly prudent to try to reinvent that at this point. InternetWeek: Do you think that xDSL technologies are heading down the same road as ISDN, or is there something different this time? Lutz: I really do think there is something different. The Internet has become the killer app. InternetWeek: But the telcos are probably going to be a barrier, just because they're still going to have to pay for their ISDN equipment by selling ISDN services. Lutz: I have to say that the response to the Universal ADSL activity by all the carriers has been very positive. If they don't move quickly, the cable providers probably will, so there's a natural race going on. We're reasonably agnostic with respect to which network wins. We expect that both of them will split the market, and we want to be in both spaces. Copyright (c) 1998 CMP Media Inc. You can reach this article directly: techweb.com

To: djane who wrote (46145)	5/7/1998 2:18:00 AM
From: djane	Respond to of 61433

Newbridge manages to get foot in AT&T door Wednesday, May 6, 1998 By KEITH DAMSELL Technology Reporter The Financial Post Newbridge Networks Corp. has been enlisted to help build AT&T Corp.'s new worldwide network service, a confidence-building first major deal with the U.S. telecommunications giant that could mean millions in revenue for the Ottawa equipment maker. "It's marvelous news," said Iain Grant, managing director of the Yankee Group in Canada, a high- tech consulting firm based in Brockville, Ont. "It's another endorsement for Newbridge's approach." Newbridge will supply products to enhance AT&T's sprawling managed-bandwidth service, which offers voice, image, video and data services. By the end of this year, the service will be available to all U.S. customers and is then expected to be offered in foreign markets, including Canada. Financial details were not released, but AT&T has "tremendous growth expectations," said spokesman Jim Byrnes. Revenue from the developing network hit US$650 million last year and is targeted to reach US$4 billion in 2002. As a result, it is likely the supply agreement will be "a significant revenue generator" for Newbridge, said Todd Coupland, an analyst with CIBC Wood Gundy Securities Inc. in Toronto. The analyst has a strong "buy" rating on the stock and a 12-month target of $60. Rumors of a big contract have helped push Newbridge shares (NNC/TSE) up from a two-year low of $27 on Feb. 3. The stock rose $1 to close at $45.80 yesterday. The deal means several big telecommunications vendors lost the race to supply AT&T, including Cisco Systems Corp. of San Jose, Calif. Cisco builds traffic switches for the AT&T network, software that caused an outage last month in the communication giant's high-speed data network. AT&T and Cisco are working to change the software to insure the problem doesn't occur again. Despite Cisco's software setback, Byrnes said it was a "wrong conclusion" to suggest Newbridge had replaced the incumbent as AT&T's network provider of choice. In the future, it's likely AT&T will use the technology of both rivals to meet its service needs, he said. "They are not mutually exclusive companies." Cisco was not available for comment. Cisco shares (CSCO/NASDAQ) fell US$15/16 to US$735/8 yesterday. AT&T stock (T/NYSE) was down 7/8 to close at US$613/16 .