It may be that 1996 has been the year of the networking equipment acquisition, with Cisco Systems Inc, Bay Networks Inc, 3Com Corp and even Cabletron Systems Inc, which at one time was rather sniffy about the trend, have all been furiously in-filling with $50m to $500m acquisitions – but don’t look for the trend to die in 1997. Compaq Computer Corp can be expected to show its hand in a big way, and none of the others looks satiated or to have all of its technologies in place. Yesterday it was the turn of Bay Networks Inc again: the Santa Clara company revealed that it had acquired NetICs Inc, a developer of high-performance Fast Ethernet switches – but one which can scarcely have got its products to market, because the price paid is only $99m – $45m in cash and the balance in new Bay shares. Bay will be taking a charge for a substantial portion of the acquisition price, which of course will be accounted for as a write-off of in- process technology, although it is questionable just how much longer the accounting standards bodies will allow the practice to continue. NetICs gets its name from the fact that its switches are put together from application-specific integrated circuits it designed. They will be used for Fast Ethernet network switches and provide next-generation semiconductor technology for other Bay products. The first switch based on the NetICs acquisition will offer autosensing 10/100Mbps Ethernet transmission speeds at below $250 per connection, and is set for release next quarter. NetICs will continue to work as an independent operating group, coming under Bay Networks’ Enterprise Business Unit, and will focus on developing lower cost infrastructure products that connect Ethernet networks at any speed from 10Mbps to 1Gps.
