By Andrew Lawrence in Cannes
IBM Corp has given up any aspirations of becoming a branded supplier of networking equipment to the telecoms sector, and will instead become an arms supplier to all sides, its executives told a meeting of networking analysts in Cannes, France on Monday.
As the film festival closed, Michel Mayer, General Manager for IBM Networking Hardware Division, based in Raleigh, North Carolina, opened IBM’s Net’99 Conference with the admission that IBM does not have the capabilities to go and rig out a full Deutsche Telekom network. It has therefore decided not to take on the leaders, Lucent Technologies Inc, Cisco Systems Inc and Nortel Networks Inc. Instead it will try to sell them all or any of its networking technology. IBM believes it is a leader in policy driven networking, IP switching and server to network interfacing.
According to Mayer, IBM has asked the leading suppliers if they would be willing to buy from IBM and all have said yes. Alcatel and Nortel already use IBM’s Prizma switching technology, developed at the IBM Zurich Research Laboratory over the past ten years, and Cisco already resells some of IBM’s S/390 mainframe web server technology. IBM expects its silicon germanium technology to be particularly attractive to manufacturers of small, low-end devices.
IBM’s goal is to build up its networking OEM business to the level of the storage OEM division. Storage was a key component in IBM’s recent $16bn, seven year OEM and technology deal with Dell Computer Corp, signed back in March. IBM does not disclose revenues for its networking hardware division, although one executive said revenue is about the same as 3Com’s. 3Com posted revenue of $5.42bn in 1998.
IBM emphasized that it will continue to compete against Cisco and others in the market for enterprise devices such as Ethernet and asynchronous transfer mode routers and switches.
