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: bucky89 who wrote (56697)	11/3/1998 8:56:00 PM
From: gbh	Read Replies (1) \| Respond to of 61433

Silicon Valley: Cisco Scores By Kevin Petrie Staff Reporter 11/3/98 6:02 PM ET SAN FRANCISCO -- Score one for Cisco (CSCO:Nasdaq). Enron Communications' decision to build a telecommunications network to send data using only Internet-Protocol systems from Cisco with fiber-optic gear from Ciena (CIEN:Nasdaq) is a coup for data networker Cisco in its battle against both Lucent (LU:NYSE) and Ascend (ASND:Nasdaq). The contract presages a gradual shift in network architecture away from phone systems toward the Internet. After examining all the options, Enron nixed plans to purchase additional layers of network technology from Ascend, Lucent and other suppliers, according to research vice president Stan Hanks at Enron. "We looked at most of the Sonet equipment and the ATM equipment on the market," Hanks says. Lucent relies on sales of Sonet or "synchronous optical networks," an older form of fiber-optic technology. Ascend is a key player in ATM or "asynchronous transfer mode" switches for the backbone of carrier networks. While many carriers to date have balanced numerous layers of technology in their networks, Enron has opted just to stick with the simpler offerings from Ciena and Cisco and save money. "We think it's a 30% to 40% impact on working capital and 60% impact on operational costs," says Hanks. "That's big." Enron had to choose between quality and price. "There are some things that [IP] just can't do right now, and that's perfectly fine with us," Hanks says. For example, Enron has no immediate plans to send voice calls over this data-based system. Lucent and Cisco are girding to battle in the converging fields of telephone service -- Lucent's forte -- and the Internet. The network of tomorrow likely will be based on data systems rather than voice. It will take some time to arrive there. Enron Communications, a subsidiary of Enron (ENE:NYSE), seems to be following in the footsteps of energy company Williams (WMB:NYSE) by building a telecommunications network. Enron intends to lease capacity on its pipes to carriers, allowing them to ship Internet traffic. Given the current unreliability of IP technology, Enron will be unable to carry phone calls on this system in the near future. Enron appears to be the first company to choose strictly IP, according to analyst Mat Steinberg with market researcher Ryan Hankin Kent. He says Lucent is working to meet this challenge by developing IP vertebrae for network backbones. A spokesman for Ascend says the company is fast cooking new offerings as well. "You can bet that at some point we're going to have capabilities that Ciena and Cisco are offering today," he says, adding that Ascend's current products can succeed alongside IP. "There's definitely a movement afoot for carriers to simplify their networks," says a Lucent spokeswoman. But she says it is too early to tell whether many carriers really will opt for the bare-bones IP approach, given the numerous factors they must weigh. The spokeswoman declined to speak about Enron in particular. Shares of Ciena have climbed sharply from the lows around 8 in mid-October, on speculation that the company might be acquired. Ciena's proposed merger with Tellabs (TLAB:Nasdaq) was canceled in September after Ciena lost prospective business with AT&T (T:NYSE) and others. In afternoon trading, Ciena shares were off 2 7/8 to 18 15/16 on heavy volume, as investors sold on the news of a contract that might have proved smaller in dollar volume than expected. Ciena said it has shipped $23 million of product to Enron already; other terms were not disclosed. Cisco's stock was down 1 5/16, or 2%, to 63 3/8. If other carriers follow Enron's lead, Cisco might gain an early advantage in its battle to challenge Lucent.

To: bucky89 who wrote (56697)	11/4/1998 9:35:00 AM
From: Hagar	Read Replies (1) \| Respond to of 61433

I do understand the details of routing and switching. Specifically IP switching calls for mapping paths through a network and applying some circuit identification to them. Standards being what they are means this can only occur in a homogenous network with somewhat proprietary protocols. The route lookup occurs at the edge (ingess) which yields the circuit to the other edge or destination. The edges still need to co-exist in a purely routed environment if they connect to other devices. Historical routed networks operate hop by hop employing some of the technology found at the edge in the IP switched environment. It just seems to me one hardware platform can be used in both environments. Are the hardware architectural requirements so different for purely routed environments from multi-service switched environments? I believe NO. With a company focused on eps this makes me wonder what senior management is planning (or not) with the divisions. I belive focus is the key to success when your growing. I see the RAC business is focused, and the switching business is focused. This IP stuff doesn't seem the have the same focus.