Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: djane who wrote (53719)	9/5/1998 7:21:00 PM
From: djane	Read Replies (18) \| Respond to of 61433

High-tech investors told to 'stay calm' [Woo recommends ASND] theglobeandmail.com Analysts recommend sticking to basics Wednesday, September 2, 1998 By Tyler Hamilton and Mark Evans The Globe and Mail Technology investors are being told to stay calm and stick to the basics as they mull over the aftermath of Monday's sudden market drop, led by some of the biggest stars in the high-tech sector. The advice from industry analysts for the moment is simple: Invest in companies with profits, cash flow and strong revenue. Mark Lawrence, president of CML Capital Ventures in Toronto, said the mantra for investors still keen about technology stocks should be "selective buying," a far cry from the bandwagon mentality that sent many high-tech stocks soaring in recent months. "I don't think [investors] should abandon the sector at all," he said. "I still think technology will be a strong part of corporate expenditures around the world and will continue to be used as a way to improve margins." Roger Dent, research director at Yorkton Securities Inc. in Toronto, said current market conditions play in the hands of experienced, patient and knowledgeable investors. He said some investors are feeling uncomfortable and bending to the market's mood. "In times like this, the first reaction that investors have is to head for the largest, most liquid stocks," Mr. Dent said. "You also get occasionally short-sighted panic-like selling. This can create some of the best buying opportunities for [more experienced] investors." Experience is why Mr. Lawrence remains an avid supporter of Geac Corp. , whose stock has fallen 50 per cent in the past five months because of concerns that its profit growth may be slowing. He said Geac is a good example of a solid company trading at a far lower multiple than its U.S. rivals, thereby offering a good buying opportunity. At the other end of the spectrum, Mr. Lawrence said, are Internet-based stocks, which have shown the ability to climb as fast as they can decline. While the Internet is quickly becoming a legitimate business and communications tool, Mr. Lawrence said he remains leery of companies with high market capitalizations but weak fundamentals -- such as profit, cash flow and revenue. The panic buying spree that just months ago catapulted young stocks -- such as Internet company Amazon.com Inc. -- to great heights turned on Monday into a blue-chip flea market, where the name of the game was sell, sell and sell more. The hardest hit high-tech blue chips were Dell Computer Corp. of Round Rock, Tex., Cisco Systems Inc. of San Jose, Calif., and Murray Hills, N.J.-based Lucent Technologies Inc. , whose stocks were battered by percentage losses in the double digits. Microsoft Corp. of Redmond, Wash., came close to the 10-per-cent mark, falling $9.31 to $95.94. Dell took the hardest punch. It plunged $18.75 (U.S.) on Monday to $100 on the Nasdaq Stock Market. It was also the most actively traded stock for the day, with trading volumes of 48.6 million shares. Observers say it was only a matter of time before blue-chip technology stocks felt the tornado that for months has been hammering the sector's less-stable trailer park variety. But now that all have felt the storm, they say Monday's injured will be the first to heal. "We think [large caps] will be the first to bounce back," said David Powers, an analyst with Edward Jones in St. Louis. "Our message is to stay calm, stay invested, and if you have some money to put to work, now is a pretty good time to dip your foot back in the water." Indeed, many of those hit Monday did bounce back yesterday. Cisco was up $8.12 to close at $90, Dell gained $8.38 for the day, closing at $108.38 and Microsoft was up $5.31 to $101.25. One exception was Amazon.com, which fell $3.80 to $79.95. Mr. Powers said investors need to recognize that there are many stocks floating around that are well below the market average -- some as much as 50 per cent off their 52-week highs. That's not to suggest that the market is no longer volatile. Mr. Powers said there could be more downside in the near term before a new bottom is formed. "But once people get the green light to get back into the market, [high-tech blue chips are] the first place they'll look." Richard Woo, an analyst with Thomson Kernaghan & Co. in Montreal, said it's a great time to buy the shares of North America's leading telecommunications and networking equipment companies, such as Cisco, Lucent and Ascend Communications Inc. of Alameda, Calif. He said these companies are world leaders and are showing no signs of slowing profit and revenue growth. "It's time if you're a long-term investor to start picking up some of these companies. The U.S. companies are at the leading edge of technology. This is not a time to hold tight, this is a time to look at the opportunities." Mark Pavan, an analyst with Yorkton Securities, said the recent hit on high-tech blue-chip stocks doesn't have much impact on the stock of smaller Canadian software companies. Whether an investor is looking at a Northern Telecom Ltd. or a smaller company like OpenText Corp. of Waterloo, Ont., the same rules apply, he said. "We're telling our clients to stick with the fundamentals." Hi-tech stocks Yesterday's 52-week 52-week Stock close, $U.S change high low IBM $117.94 +5.31 $118.94 $110.75 Microsoft 101.25 +5.31 101.75 94.5 Dell Computer 108.38 +8.38 110.00 93.75 Compaq Computer 29.94 +2.00 30.19 26.94 Yahoo! 72.25 +3.25 76.50 59.00 Amazon.com 79.95 -3.80 86.38 65.00 Cisco Systems 90.00 +8.12 90.62 81.87 Lucent Technologies 77.25 +6.12 78.62 70.87 Ascend Communications 38.06 +2.87 38.12 32.62 S&P 500 compsite index 994.24 +36.96 1,000.71 939.98 S&P 500 high technology subindex.820.45 +51.52 823.20 760.95 Nasdaq composite index 1,575.09 +75.84 1,576.84.1,477.06 News \| Sports \| The Arts \| Commentary \| Focus & Books \| Report on Business Back to the top of the page We welcome your comments. Copyright c 1998, The Globe and Mail Company All rights reserved.

To: djane who wrote (53719)	9/5/1998 7:25:00 PM
From: djane	Respond to of 61433

Phone services hit the Internet [PSIX/ASND VoIP] plesman.com by Denise Romberg Vying for an edge in the hot voice services market, Internet service provider (ISP) PSINet announced recently it will launch the first phase of its Voice-over-Internet Protocol (VoIP) service aimed at businesses. Analysts, however, say the technology suffers from both hardware manufacturer hype and significant barriers to wide acceptance. PSINet's suite of Internet telephony services, known as PSIVoice, will be available initially to its 39,000 business customers, allowing firms with private branch exchanges (PBX) to route voice calls directly across the Internet. According to the company, the iPEnterprise service will provide customers with turnkey voice services equivalent in performance to traditional dedicated telephone line PBX service and cost savings of as much as 50 per cent. PSINet said its VoIP service will also include simplified dialing codes, desktop faxing, conference calling and unified messaging. The voice service market has become quickly populated by many different vendors, not all of whom share the same vantage point, explained Louise Labuda, director of marketing at Vienna Systems Corp. in Kanata, Ont. The telephony equipment provider is an affiliate of Newbridge Networks Corp. Corporations electing to implement VoIP service will need to choose between deploying it through an in-house infrastructure to eliminate monthly voice service fees (which requires the capital expenditures and management costs for new hardware), or an outsourced solution such as that offered by PSINet, which leaves the control and management in the hands of an ISP. "At the end of the day, everybody is after the same packet. Everybody sees the convergence of voice and data and it's just a matter of which network are you going to use and who's going to have the boxes for the IP network. Is it going to be the traditional voice vendors or the data vendors?" Labuda asked. A study published early in August by Forrester Research, Inc. of Cambridge, Mass., contradicts vendors' claims that IP telephony can reap savings in long distance telephone charges. Researchers called the implementation of one network where corporate voice and data communications converge a dream that will achieve only minimal cost savings. The study, following a survey of 50 Fortune 1000 companies, says that cheaper phone bills and reduced network administration have been hyped by the networking hardware manufacturers who overlook the complexity of administering integrated networks. For most companies, assuring predictable performance for data transmission already taxes network administration without adding the further demands of voice traffic. "The reason for doing this (VoIP) is to save money; there are no new compelling applications, so unless you had a lot of international traffic, we found it wasn't worth the hassle, you didn't save a lot of money and it took a long time to break even," explained report author Maribel Lopez. "This might work for small businesses that don't have good phone rates and it works for consumers who are looking at a difference between 10 cents and one and a half to three cents a minute, depending on the quality they want." Lopez pointed out that most of the Fortune 1000 companies are paying about five cents (U.S.) per minute for their long-distance calls. "I didn't get into the costs you would eat up by migrating your network over, I just did a straight calculation of cost and I couldn't come up with a justification," she said. The technology, still in it's infancy, "is not reliable enough for companies to use as a primary type of telephone connection because the quality is definitely not as good as the telephone system," says analyst, Ruth Chatterton of TeleChoice, Inc., a telecommunications consulting firm in Boston, Mass. She added that data and voice convergence is an economic decision and corporations must see good economic advantages and increased efficiencies before combining voice and data networks. While VoIP could be an option for long-distance telephone calls, "I'm pretty cautious, I don't know if companies will ever really 100 per cent switch over," she said. There are just too many concerns at this time, not the least of which is prioritizing voice packets so that they "don't get trapped behind the bigger Mack truck kind of data packets." Schemes that determine message priorities are one of several standards related issues yet to be resolved, Chatterton said. Jeff Phillips, a TeleChoice analyst in Tulsa, Okla., pointed out that other issues which can slow down implementation concern the allocation of Internet connection costs and developments in VoIP technology that will permit callers to use Internet telephony by following similar procedures and accessing services such as those available through their current office telephone equipment. While PSINet may be enjoying an advantage over competitors who have not yet experimented with the technology, Chatterton said, "it's a short term advantage, like any technology. Just as fast as you can adopt it, somebody else is too, so you have to get better at it faster than they can." The second phase of the PSIVoice service, iPEnterprise Plus, is due later this year and will add voice communications to corporate extranets. The third service of the suite, IPGlobal, is aimed at the consumer market where PSINet plans to deploy gateways that will interconnect with the public switched network (PSTN). PSIVoice operates on Ascend Communications Inc.'s MultiVoice architecture designed to deliver voice and fax over IP, frame relay and asynchronous transfer mode (ATM) networks. PSINet customers will need to add Ascend MAX 2000 or MAX 6000 routers installed and connected by PSINet to existing PBX systems and networks. BACK INDEX FORWARD Copyright c 1997 Plesman Publications Ltd. Reproduction in whole or part without permission is prohibited.

To: djane who wrote (53719)	9/5/1998 7:31:00 PM
From: djane	Respond to of 61433

IP Telephony Vendors Scooped Up in Merger Frenzy [Nice ASND/SRA analysis] [See link for analysis of CSCO/Summa, LU/Worldport and others] soundingboardmag.com By Paula Bernier This summer saw a flurry of vendor mergers, narrowing the field of equipment suppliers in the Internet protocol (IP) telephony arena and signaling the beginning of what is expected to be an ongoing trend. IP Telephony Deals Buyer Bought Deal Value Ascend Communications Inc. Stratus Computer Inc. $822 million Bay Networks Inc. NetServe GmbH Undisclosed Cisco Systems Inc. Summa Four Inc. $116 million Comdial Corp. Array Telecom Inc. $5.75 million Digi International Inc. ITK International Inc. $25 million ECI Telecom Ltd. NKO Inc.'s telephony systems division Undisclosed Comdial Corp. (www.comdial.com) bought Array Telecom Corp. (www.voipgate.com) for C$8.7 million (about US $5.75 million) in cash. Digi International Inc. (www.dgii.com) recently competed its acquisition of ITK International Inc. (www.itk.de) for $12.5 million in common stock and $12.5 million in cash. ECI Telecom Ltd. (www.ecitele.com) cut a deal with privately held NKO Inc. (www.nko.com) to buy its IP telephony systems division. Meanwhile, Bay Networks Inc. (www.bay.com) plans to buy Berlin-based NetServe GmbH, a company specializing in packetized voice over cable networks. Ascend Communications Inc. (www.ascend.com) said it will buy Stratus Computer Inc. (www.stratus.com). And Cisco Systems Inc. (www.cisco.com) is acquiring Summa Four Inc. (www.summafour.com). Comdial was attracted to Array because its IP telephony software supports such features as debit card billing, credit card billing and remote programmability, says Comdial spokesman Dick Bucci. Comdial had a relationship with privately held Array Telecom, which had been owned by Array Systems Computing Inc., prior to its purchase of the company. Under that deal, Comdial licensed Array's IP telephony software to run on the Comdial Ctvoice product for the enterprise. Array also has been selling a carrier gateway under the name VOIPgate.com since 1997, according to Bucci. Comdial--which sells digital switches, wired and wireless phones, call center hardware and software and voice processing in addition to Internet protocol telephony gateways to small-and mid-sized organizations--plans to release a new, H.323-compliant version of VOIPgate.com within a few months, he says. Digi, meanwhile, found ITK fit nicely into its open systems server strategy, says Digi senior vice president Jonathon Killmer. ITK has an integrated services digital network (ISDN) concentrator card and Internet telephony technology that Digi wanted to integrate into its product line, he says. Digi will port ITK's IP telephony software onto its own concentrator card by December, he says. In the meantime, Digi will sell ITK's standalone IP telephony gateway, called NetBlazer 8500. Other vendors also are integrating the ITK technology into their products, notes Killmer. Siemens Public Communications Network Group (www.siemens.com) recently announced plans to employ NetBlazer to enable its EWSD circuit switch to all do IP voice packet switching (Sounding Board, August, page 16) and, Killmer says, the company is close to striking a similar arrangement with switch vendor Ericsson Inc. (www.ericsson.com). As for ECI and NKO, a privately held U.S.-based IP telephony vendor, back-office systems were the driving force for the deal. NKO's convergent support system (CSERV) provides customer registration, customer support and billing support and call record processing as well as network directory and provisioning management. NKO Service Division, meanwhile, operates global IP telephony network NKONet, which provides services to carriers and end users. ECI Telecom sells a family of carrier-class IP telephony gateways and related products. The company also has marketing and equipment development agreements with VocalTec Communications Ltd. (www.vocaltec.com) (Sounding Board, May/June). Of course, these deals may reflect a larger trend that has seen telecom vendors tying the knot with data communications vendors. Recent deals along these lines include Northern Telecom Ltd.'s (www.nortel.com) purchase of Bay Networks, and Lucent Technologies Inc.'s (www.lucent.com) Yurie Systems Inc. buy. Stratus Buy Positions Ascend for Packetized Data By Paula Bernier In another move to cement the bonds between the data and voice worlds, Ascend Commun-ications Inc. (www.ascend.com) is purchasing Stratus Computer Inc. (www.stratus) in an all-stock deal, which was valued at $822 million at the time of the July 31 announcement. With the Stratus purchase, Ascend gains ownership of Stratus' signaling system 7 (SS7) technology. SS7 is the public switched telephone network's (PSTN's) method to set up and tear down calls, as well as signal the network about what customer subscribes to what service. Now companies such as Ascend want to expand SS7 so it also can offload data traffic from voice switches and handle network administration in Internet protocol (IP) telephony networks. According to Ken Fehrnstrom, Ascend's senior vice president of business development, IP telephony gatekeepers offer some network intelligence today, but that's limited to mapping and is not as robust as it is needs to be. "All the gatekeeper does is provide connection into the Internet networking cloud," Fehrnstrom says. "The SS7 node is the node that every calls goes to. So we're routing the call sooner in the network." In addition to its SS7 technology, which has gained most of the attention in this Ascend deal, Stratus also has units that focus on operations support system (OSS) software and fault-tolerant computers, which can be leveraged for IP telephony as well as traditional telecom applications. OSS software is used to handle such back-office functions as billing and customer care, network monitoring and management and service provisioning. Fault-tolerant computers are used to host critical network applications such as signaling and network management. Stratus also has an enhanced service creation environment on which enhanced services such as prepaid calling cards can be written and reside, Fehrnstrom adds. Fehrnstrom says Ascend's purchase of Stratus will accelerate its previously announced strategy by a year or more. Stratus will release a new version of its SS7 service node software to support IP telephony in the first quarter of next year, according to Fehrnstrom. This spring, Ascend and a handful of other data communications vendors, including Bay Networks Inc. (www.bay.com), Cisco Systems Inc. (www.cisco.com) and 3Com Corp. (www.3com.com), in separate announcements, said they would be using Stratus' SS7 technology. They planned to use the signaling technology to offer solutions to offload Internet traffic from the PSTNs onto data equipment, and later to provide signaling and enhanced services for IP telephony (Sounding Board, May/June). Stratus expects to continue working with all those companies under its new ownership, according to Fehrnstrom and Stratus Public Relations Manager Lynette Gutcho. [Fascinating] ______________________________________________________________ PSINet Unveils VoIP Strategy By Paula Bernier It appears that Internet protocol (IP) telephony is finally starting to catch on with the Internet service provider (ISP) set. PSINet Inc. (www.psinet.com) recently announced a trio of IP telephony services--under the name PSIVoice--for the intranet, extranet and consumer markets. The services will run over IP connections on PSINet's frame relay backbone and will be based on equipment from Ascend Communications Inc. (www.ascend.com). With 39,000 corporate customers in 36 countries, it's not surprising that PSINet's IP telephony efforts are focused primarily at corporate multinationals. iPEnterprise enables businesses with private branch exchanges (PBXs) to use PSINet's frame relay/IP network for carrier-grade voice services between their locations. The service is targeted at distributed corporations with offices overseas. iPEnterprise Plus enables corporations to reach select destinations--such as business partners, customers or suppliers--outside their intranets via low-cost IP telephony links. The extranet service will allow for simplified dialing codes and other enhanced features such as desktop faxing, conference calling and unified messaging services. Customers, who will be charged on a flat per-site basis (PSINet says the exact fee will vary based on the customer) rather than a per-minute charge, can expect to save 20 percent to 50 percent over what it would otherwise cost them for their voice communications, says PSINet's chief technology officer Chuck Davin. "[It will be] tiered based on the number of simultaneous voices that are supported," Davin says. As part of the two business services, PSINet will install an IP telephony-enabled Ascend MAX2000 (supporting a single T1, or 1.5 megabits per second link) or MAX6000 (supporting four T1s) at the customer premises. The devices will act as dedicated IP telephony gateways (not as general data access devices). The Ascend products work with most popular PBXs, such as those from Lucent Technologies Inc. (www.lucent.com) [That's convenience] and Northern Telecom Ltd. (Nortel) (www.nortel.com), says Roger Boyce, Ascend vice president and general manager. Service and provisioning capabilities may vary depending upon the flexibility of the PBX, he adds. iPGlobal, meanwhile, is targeted at the consumer market, although PSINet plans to sell it largely as a wholesale service to other carriers that want to sell it to consumers. The consumer product will be based on Ascend's TNT, DS-3-level product. iPEnterprise is available now to any PSINet existing customer. iPEnterprise Plus is scheduled to be available later this year. iPGlobal is expected to make its debut early next year, with the deployment of gateways for that service largely depending upon where PSINet sees demand (the company has not yet struck gateway interconnection agreements with other carriers or settlements providers). So why did it take so long for PSINet to get into IP telephony? Unlike some of the next-generation telcos that have come out with IP telephony services over the past several months, PSINet is focused on the business market, so it waited to come out with its services until it could ensure high-quality connections, Davin says. "Many early voice over IP focused on consumers; we're focused on the corporate customer base," he says. "And with [these customers] quality is a cardinal issue." Davin says the quality of its IP telephony connections will be "nearly imperceptible" from voice conversations on the public switched network or via dedicated voice lines. Compression will vary depending upon customer requirements, he says, adding the Ascend products support all popular IP telephony compression schemes.

To: djane who wrote (53719)	9/5/1998 7:45:00 PM
From: djane	Respond to of 61433

Must-read. 8/31/98 InternetWeek interview with Chambers Excerpt: Some analysts said that Ascend Communications is ahead of Cisco in the carrier market. Did the StrataCom acquisition yield the right WAN products for you? Chambers: Ascend is absolutely our most challenging competitor in the WAN ATM switch area. But we have moved from being a nonplayer three years back to a leading position and are fast moving past Ascend and 3Com in that area. We finally got the products we need. Cascade was a very good acquisition, conceptually and productwise, for Ascend. We just announced our high-end ATM-IP switches-the 8500, 8540, 8800-the result of the StrataCom acquisition. StrataCom did give us an end-to-end story, but a big acquisition is really tough to do, and I'm glad I wasn't trying to do it across the country. internetwk.com August 31, 1998 An interview with John Chambers, president and CEO, Cisco Cisco Continues to Raise the Bar On July 17, Cisco's market cap hit $100 billion. But aside from a five-minute toast with his top aides, CEO John Chambers was focusing on raising the bar even higher. That same laserlike focus he brought to the company in the late 1980s is still the guiding force. InternetWeek executive industry editor Saroja Girishankar caught up with Chambers to discuss Cisco's strategy for continued growth. That strategy will include a dozen or more acquisitions this year in an effort to establish itself as the leading provider of integrated voice, data and video networking to the enterprise and service provider markets. InternetWeek: What is your view of the Northern Telecom-Bay Networks merger and the impact on Cisco? Chambers: The Nortel-Bay merger is indicative of how data, voice and video are coming together and how leading vendors need the combined capabilities. The end-to-end [integrated] strategy is moving faster than we expected. To implement that, you either develop the products yourself, partner or acquire. We tried very hard to partner with Nortel or Lucent, but we were just unable to do that. InternetWeek: Why did it not work? Chambers: The partnership broke down for several reasons. To partner, you've got to figure out target segments, product overlaps and speed to market while getting organizations to work both culturally and chemistrywise. For several of those reasons, it just did not work out. InternetWeek: Can you be successful going it alone? Chambers: We will not go it alone. We will do it through a combination of developing some two-thirds of the products ourselves and one-third through partnerships and acquisitions. InternetWeek: How is the market shaking out? Chambers: The data communication market is consolidating rapidly. Cisco has acquired 24 companies and others are following a similar strategy. Similar consolidation will occur in the traditional voice area. It is going to be an IP or ATM world as you go forward in the data infrastructure. InternetWeek: For Cisco to address the carrier and ISP markets, do you need to move deeper into voice over ATM? Chambers: We have no religion when it comes to technology and we basically let the market determine what product we go into. You will see our products do IP and ATM. In terms of voice, you need to do it in conjunction with data and video end-to-end and only a few companies can do it. That is why half of our acquisitions this year have been in the integrated data/voice/video area and half of the 10 to 15 companies we plan to acquire over the next 12 months will be in that area. InternetWeek: It seems like Cisco's main focus now is service providers. How does that impact enterprise users? Chambers: Enterprise is still larger than our service provider market as far as the customer base. We do expect the service provider side to grow 10 percent to 20 percent faster year after year than the enterprise marketplace. As for products, enterprise customers will be able to use the ones developed for service providers for their intranets and extranets. InternetWeek: How will Layer 3 switches affect your router business? Chambers: We don't care how the market evolves. We intend to be No. 1 and No. 2 in the product area, and we also combine the products into the same chassis so that customers can grow within each area. InternetWeek: Some analysts said that Ascend Communications is ahead of Cisco in the carrier market. Did the StrataCom acquisition yield the right WAN products for you? Chambers: Ascend is absolutely our most challenging competitor in the WAN ATM switch area. But we have moved from being a nonplayer three years back to a leading position and are fast moving past Ascend and 3Com in that area. We finally got the products we need. Cascade was a very good acquisition, conceptually and productwise, for Ascend. We just announced our high-end ATM-IP switches-the 8500, 8540, 8800-the result of the StrataCom acquisition. StrataCom did give us an end-to-end story, but a big acquisition is really tough to do, and I'm glad I wasn't trying to do it across the country. InternetWeek: What are the areas you need to innovate in next? Where are you putting your R&D resources? Chambers: We are spending more than $1.4 billion next year in R&D, and that's more than we earned in sales just five years ago. We've also made a very conscious decision that R&D is going to run in excess of 12 percent of revenue; we learned the hard way that when you are late to market, it takes you years to catch up. We are heavily invested in the DSL, ISDN, cable and wireless areas. Our intent also is to be No. 1 in ATM in the enterprise, the desktop and within the workgroup. InternetWeek: Switching gears, besides privacy and security, what other elements are needed to boost the Internet economy? Chambers: You said it right. Security is a key issue; so are ease of use and government noninterference. I have been talking to world leaders, including the prime ministers of Japan and Australia, about those issues. InternetWeek: How will Year 2000 compliance impact growth of the Internet economy? Chambers: Everybody just got blindsided, honestly, but many of the companies, particularly here in North America, are well prepared. Europe looks fine, too, but Asia is behind. In terms of spending, some of the IT budgets are being shifted to Year 2000 fixes and away from other developments. But, even more important than the dollars, I am concerned about management's time and resources that are being taken by the problem. InternetWeek: Recently, you've made more acquisitions in the software management, caching and firewall areas. Do you see yourself moving further into software? Chambers: You are going to see software continue to expand within Cisco in terms of the amount of resources we apply to it, whether it is internal resources, partnering or acquisitions. InternetWeek: How will Cisco's relationship with Microsoft change as you put more intelligence into the networks? Chambers: The Microsoft partnership is working out well for us. We are combining its directory with ours. InternetWeek: What kind of a company will Cisco be in the year 2000? Chambers: We will be the leader in data, voice, video and all major segments of the market--the service provider, enterprise, small-to-medium-sized business, and the consumer.