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To: James A. Venooker who wrote (57478)	11/24/1998 11:52:00 PM
From: Kent Rattey	Read Replies (1) \| Respond to of 61433

LUCENT BUYS BETTER ACCESS By Owen Thomas Red Herring Online November 24, 1998 A year after its acquisition of Livingston Technologies, Lucent (LU) continues to strengthen its presence in data networking with new buys. Now, however, it's shifting its attention from servers and routers to the software that runs on the network. On Tuesday, Lucent announced it would acquire Pario Software, a tiny software developer based in Redwood City, and combine it with Livingston. And last month, it spent $50 million to buy Quadritek, which makes software for dynamically assigning IP addresses -- a task essential to run complex Internet-based networks. All part of a plan Livingston, which became Lucent's Remote Access Business Unit, makes remote access servers for office networks and Internet service providers. But it also pioneered Radius, software that has become a de facto standard for identifying and authenticating users. Pario's software, Port Authority, is an easy fit with Livingston's Radius, since both are written in the Java programming language. Port Authority adds more advanced security features, however, and Pario brings high-profile customers like WebTV Networks, Pacific Bell Internet Services, and Southwestern Bell Internet Services into Lucent's fold. "Whether you're a small ISP or the largest ISP on earth, everyone uses Radius, at least to authenticate users," brags Alex Henthorn, a software manager at the Lucent business unit. According to Mr. Henthorn, Radius, which Lucent gives away to purchasers of Livingston hardware, is a "raw technology" that many customers modify in-house. Now, he says, the company is aiming to turn it into a more complete solution for ISPs that need to authenticate and bill users dialing into their networks. Quadritek's appeal stems largely from its IP network administration tools. The firm, based in Malvern, Pennsylvania, counts 400 customers worldwide, mostly the large enterprises and service providers Lucent has been targeting. Fight firewall with firewall The software acquisitions pit Lucent against Check Point Software (CHKPF), maker of Firewall-1, a market-leading product that protects corporate networks. Check Point has based much of its business on turning Firewall-1 into a secure platform for network services. Lucent's own firewall product, the Lucent Managed Firewall, addresses the more complex security challenges that ISPs face. Service providers have to protect their networks both externally -- against outside hackers -- and internally -- shielding each customer's site from other customers. In response to this challenge, Check Point recently released Provider-1, an advanced version of Firewall-1 that allows for easier partitioning of networks. Since its start in 1996, Lucent has competed with data communications giants like Cisco Systems (CSCO). Lucent's 1997 investment in Juniper Networks and the acquisition of Livingston aimed directly at Cisco's network equipment market. But the latest buys enter Lucent into a new field of competition.