Compaq Computer Corp is planning an assault on the networking market and is buying in the expertise it needs through a non-exclusive licensing deal with Cisco Systems Inc (CI No 2,693). It plans to integrate the latter’s Internetwork Operating System software into personal computer-based router products, the first of which is planned for launch during the first half of next year. At present, details are thin on the ground, and at the UK press conference to announce the deal, Cisco said the companies were not there to make a specific product announcement, but to talk about the technology licensing agreement. However, Ed Reynolds, Compaq’s group product manager, said the routers will use a PCI architecture, and will be iAPX-86-based. Compaq is planning to target small- and medium-sized businesses, as well as the remote access needs of Fortune 1,000 companies. Reynolds also hinted that the company is planning forays into other segments of the networking market, implying that it has its eye on the hub and switch segments as well. The company decided to make its move now, Reynolds said, because as mature as the router market is, there are the beginnings of a wave in the smaller- and medium-sized businesses, and because these companies are looking for a channel-ready solution, which the company’s experience in the personal computer market will enable it to provide. But Reynolds said the company recognises that it will have a bit of an uphill struggle at first, since its name has not been associated to date with networking. That’s why it has licensed Cisco’s Internetworking Operating System logo as part of the deal, and said it expects to draw a certain amount of market presence with that brand equity. The two companies will also work jointly on marketing, service and support, and plan to develop network management applications incorporating Compaq technology, as well as the CiscoWorks management applications. Compaq plans to market its products through its existing distributor and reseller channels. According to Reynolds, a lot of them are already in this business and, for those that have not begun delving into internetworking, we will offer training and market development assistance. Cisco said it was attracted to the deal, since it will help it in its mission to establish its operating system as the de facto industry standard for internetworking. He also hinted that, for this reason, other licensing deals could be expected in the future.
