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December 1, 1987

ATLANTIC NETWORK SYSTEMS ENTERS X25 MARKET, ADDS STRING OF NEW PRODUCTS

By CBR Staff Writer

Atlantic Computers Plc’s Atlantic Network Systems Ltd has taken on new personnel and three new products to enable it to bid for corporate networking contracts. The products are an X25 switch from Hughes Aircraft, a time division multiplexer from Newbridge Networks and a self-designed V.32 modem with network management. Corporate marketing manager Malcolm Reip and sales and marketing director Chris Baldock may not be aiming for the 45% compound growth for the company that they experienced at Case during its most illustrious eight years but they see good prospects in a market that has changed considerably since the late 1970s. Atlantic Computers Plc has invested UKP6.5m in reorganising its Lion Systems research arm and MPL Power Systems, building up personnel, and bringing on board new products in an attempt to make Lion a profitable concern. Atlantic Network Systems is calling the X25 switch it is taking from Hughes the ANS 4000 series. This is the successor to the switch that DDC developed for Telenet in the 1960s and which Plessey distributes in the UK. Atlantic will sell the new product on an exclusive basis in the UK and Ireland: Plessey and Telenet are working to integrate the Plessey packet switch and the Telenet switch into a single product line. Atlantic’s new time division multiplexer from Newbridge Networks, the management buyout of part of Mitel Corp’s Welsh operations, is called the ANS 6000. Atlantic has a non-exclusive agreement with Newbridge for joint development of the product in the future. The new V.32 modem, called the 2032, was designed in-house and is to be launched along with the other two products at the Telecommunication Managers Association exhibition in Brighton next week. Severe price erosionThere are two differences between our V.32 product and the others on the market from Concord Data Systems, British Telecom, Codex and Dacom, says Chris Baldock, Ours incorporates network management and we are aiming it at a different market. The companies mentioned sell their V.32 products as async dial-up modems but that market is suffering severe price erosion. We will sell ours into the leased line modem market, which is the only growth market for modems at the moment. Managing director of the new division Warren Palmer, formerly head of Atlantic’s public relations unit, says he would be disappointed if the area of communications did not contribute 10% of group profits by 1990. The company is now negotiating with a US company to manufacture and distribute the modem in the US. It has also agreed with research and development company Wall Data of Seattle, Washington that it should manufacture its year old Orator personal computer-based ‘agile modem’ in the US. Atlantic Network Systems is concentrating on the European market. It does not expect the US market to contribute more that 5% to 10% of earnings. You’ve got to limit your risks in the US market, go in and grab what you can and then get out quick, says Baldock. It is not a good idea to go in by acquisition, he says, obviously casting his mind back to his days at Case Communications. Atlantic is also developing in-house a MAP-compatible local area network for release in the next year and will plans to continue to grow by acquisition from mid-1988.

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