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Technology Stocks : Ascend Communications (ASND) -- Ignore unavailable to you. Want to Upgrade?

To: mrclinton who wrote (51512)	8/4/1998 3:03:00 AM
From: Joseph Pareti	Read Replies (1) \| Respond to of 61433

Re: STRATUS acquisition The street hasn't forgotten the aftermath of Cascade acquisition, the 8k filing of July 1997, the uncertainty around ASND financials in the 3Q1997. Now Cascade proved to be the winning bet (as well as the decision to appoint Michael Ashby CFO ). I am wondering if Stratus can provide much of the same or if it just rekindles doubts on ASND. Consider the following. (comments are welcome ). By the way I considered Friday's sell off as a buy opportunity and bought more :-) "I still don't think they needed the whole company," said Steven Frenkel, an analyst at Paragon Capital. "Although they are going to sell off the other divisions, how much are they going to get for them, and who is going to buy them?" Most analysts agreed that the task of finding buyers may be more difficult than the company expects. There is speculation that a buyer or several buyers already have been found, which Ascend declined to confirm. "I don't think they are going to get much for those divisions," Frenkel added. "Most likely, they are going to have to eat the losses"

To: mrclinton who wrote (51512)	8/4/1998 5:25:00 AM
From: bucky89	Read Replies (2) \| Respond to of 61433

Mr. Clinton, Interesting comments. I thought I might respond: Mory has concerns about Cisco's ability to be price competitive more than anything else What Cisco has that should worry Mory is the huge installed base of routers that they have among enterprise customers. Especially at the high end where Cisco makes their $$, there is so much infrastructure built around Cisco enterprise routers and their specialized (and buggy) software that the costs of switching to non-Cisco are very prohibitive. I work for one of Cisco's largest customers, and they literally have us by the balls. We can buy Bay routers at 1/3 the price of an equivalent Cisco router, but it would be impossible for us to integrate them into our huge Cisco-based network. This installed base of enterprise customers is Cisco's warchest. And as you suggest, Cisco can use this to wage a price war on Ascend's home turf in the carrier market. Since Ascend's enterprise business is weak/non-existent, Mory cannot counterattack in the enterprise market. Today, Cisco is truly invulnerable on their own home turf, the enterprise market. This scenario is always a possibility if Ascend fails to stay one step ahead of Cisco in the carrier market. Ascend has been great at doing this, but how long can they keep it up? I don't know. The only permanent safe haven IMO is running into the arms of a protective Lucent. Many carriers are still sceptic about the abilities of pure IP networks to deliver a true QOS capability. True, IP does not have true QoS, at least not yet. But ATM does not scale as easily as IP. QoS vs. Scalability. These are inherent tradeoffs. Also, none of the carriers are using ATM to deliver QoS, at least not yet. Rather, it's used to oversubscribe bandwidth so that carriers can sell and resell the same physical circuit multiple times to different customers. This makes it cheaper for the customer, while the carrier better utilizes available physical bandwidth. They are comfortable that ATM can deliver this and if someone can have IP routing in this architecture with no bottlenecks (alongside frame relay) then they've got all bases covered. There is no question ATM can deliver this. The only question is can it be scalable to a carrier-sized network and larger. MPOA is one example of a non-scalable IP/ATM implementation. This is where Ascend's IP Navigator comes in. IP Navigator claims to automate and manage the complex and overwhelming process of mapping IP flows to ATM SVC's. So far, no one is using it yet. When it comes to running voice over ATM it's more bandwidth efficient to do this over native ATM than IP. Some will disagree with you. There is RTP header compression which reduces the IP overhead for voice to about the same as ATM. You can fragment IP so that it looks just like and has the same characteristics as ATM. The scenario where this is true is if you do VoIP and then put it over ATM, then you have the additional element of fragmentation which can cause up to 50% additional overhead. Other than that, VoIP can potentially be about as good as VoATM. IP is ubiquitous, while ATM is not. It's much easier to do VoIP at a small branch office or home than to put an ATM concentrator at every location. I believe both VoATM and VoIP have their roles. VoATM is better for trunking, while VoIP will be used at the edges because IP is ubiquitous. This translates into carriers primarily supporting VoATM in the backbone, while enterprise customers rely on VoIP. Once again, I give the edge to Ascend in the carrier network and Cisco for the enterprise. bucky89

To: mrclinton who wrote (51512)	8/4/1998 9:56:00 AM
From: The Phoenix	Respond to of 61433

I think if you asked visionaries from either company how they see public networks being built in the future, they'd tell you big ATM switches replacing 5ESS and DMS 100s (lookout Lucent and Nortel) with the SS7 intelligence to deliver the 800 # and number portability services for voice AND IP intellingence for Internet and corporate data markets. In general I agree. ATM at the core, however most will also agree that carrier will supply IP edges. IP is not relegated to a life in the enterprise. Also when we talk about service providers we should be careful not to lump them together. ISP's (who do provide services) and Cable Co.s (who are also working to deliver multiservice to the home) would much rather have one clean infrastructure - of IP! Why. Becauase that's what they know best. Now, I agree that most everyone will tell you that ATM is the only technology which can deliver true QoS for all traffic types but IP is not that far behind. You'd be surprised at how real this stuff really is...no, not up to ATM standards yet..and may never be. But the best technology doesn't alway win (remember betamax?). What COULD happen is that the ISP's decide to go all IP since the cost of maintaining the infrastrucutre would be reduced and because their mission crirical application is data and www access. Just thinking out loud... Again, I agree with your technical assessment and the superiour qualities of ATM. Just looking at some of the business motivators...and the fact that every one will connect to the network (regardless of type) using IP. MPLS may not be the answer on the edge...maybe on the core. BTW: There are drawbacks to an ATM network when it comes to a true "Service Based Pricing Model". OG