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June 20, 1997updated 05 Sep 2016 12:57pm

BAY BUYS RAPID CITY FOR $155M TO FILL PRODUCT GAPS

By CBR Staff Writer

Not without its share of troubles in recent times, Bay Networks Inc is looking to kick start its efforts in the IP switching and gigabit ethernet markets by acquiring privately-held start-up Rapid City Communications (CI No 3,067). According to Bay, the $155m acquisition made in Bay stock in exchange for all outstanding shares in the company, will give the it access to gigabit ethernet technology that it has been unable to develop on its own. Rapid City brings high-density backbone and routing switches will also plug gaps in its product line. We had a hole in this space said Peter Tarrant, vice president of business development at Bay. Rumors had long been circulating about a possible deal (June 12), and talks between the two companies had been taking place for a number of months. Bay says it went to all the gigabit ethernet start-ups looking for a suitable acquisition but after a long period of product testing opted for Rapid City. Bay maintains the deal will boost it recently announced Adaptive Networking to offer straight IP switching products, that do not require changes to be made to existing IP networks in order to run traffic using IP Switching. Bay claims that rival technologies from 3Com with Fast IP and Cisco with its Tag switching strategy cannot offer the same performance improvements without changes being made to existing protocols and network infrastructure. Rapid City had unveiled its Fully Integrated Routing Switching Technology (FIRST) f1200 product earlier in the year at the Networld+Interop show in May. The unit has 15Gbps shared memory switch fabric that offers 7Gbps of throughput. Individual ports can be set to deliver Layer 2 or Layer 3 switching with over 7Mpps aggregate packet forwarding performance whether routing, switching, or a combination, says the company. The f1200 has eight-slot chassis with six I/O slots supporting a mix of 10/100/Gigabit Ethernet connections. There is also up to 12 ports of Gigabit Ethernet and up to 96 ports of autosensing 10/100Mbps Ethernet. Bay’s plans to add support for its Optivity network management software as well as extending the testing of the f1200 will delay the planned shipping of the unit from the third quarter to the end of the year. Last year saw some pretty frenetic acquisitions in the networking world and this year looks to continue that trend. Last month saw network specialist Network Peripherals Inc buying Netvision Corp in a bid to speed up its switching interests, particularly in the Gigabit Ethernet and Fast Ethernet technology areas (May 12). Despite arriving late to the gigabit ethernet acquisition trail – Cisco made its acquisition of Granite Systems last September for $220 (CI No 3,154) – Bay maintains it will beat Cisco to market with its gigabit offerings. Founded in April 1996, with $6.5m in venture capital, the Mountain View, California-based Rapid City, will now become part of Bay Network’s Enterprise Business Group with the aim integrating Rapid City’s sales force immediately. Rapid City’s chief operating officer Joe Kennedy will become Bay’s vice president and the other 57 employees at the start-up will continue to operate under Kennedy, who will report to Lloyd Carney, executive vp at Bay’s Enterprise Business.

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