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July 22, 1994

WELLFLEET-SYNOPTICS MERGER TO PUSH FOR STANDARDS FOR ASYNCHRONOUS TRANSFER MODE

By CBR Staff Writer

The biggest problem that could come as a result of the Wellfleet Communications Inc and SynOptics Communications Inc ‘merger of equals’ is the name. At the moment the possibilities appear to be the unimaginative; Wellfleet SynOptics Network Systems Inc or SynOptics Wellfleet Network Systems Inc – a headline writer’s nightmare. We suggested FleetSyn but they were not impressed… They reckon the merged company will have around 21% of the market, with its nearest rival in Cisco Systems Inc with 19% of the routers and switches market, and a combined turnover of $1,036m. The merged company hopes that with its combined strength and presence on standards boards it can push through remaining standards for Asynchronous Transfer Mode. They feel all the companies’ products are complementary: Wellfleet’s routing and wide-area network technologies with SynOptics’ intelligent hub, switching and complex management capabilities. There will be no overlapping of product range, no duplication of effort to be addressed, and rather than heads rolling, they are rushing out to hire more of them. The only possible area of competition is over the Asynchronous Transfer Mode interface. SynOptics is already there with its own chip set but Wellfleet’s is still under development using the second generation Fujitsu Ltd chip set. As and when the Wellfleet offering becomes available it will be fully compatible with SynOptic’s, adhering to the same industry standards, and will slot into the Wellfleet-SynOptics vision of the Virtual Local Area Network. The Virtual Network is a set of end stations participating in a broadcast domain whose assignment to a particular domain is not dependent on reconfiguring the physical cabling. This reduces the labour costs for moves, additions and changes and offers nearly unlimited

By David Johnson

flexibility of network configuration. Merging local networks and Wide Area Networks, the Virtual LAN will encompass Frame Switching for local networks and use Asynchronous Transfer Mode, also running Synchronous Digital Hierarchy or Sonet Synchronous Optical Network interface standards, for wide area networks. The companies expect that the product, combining both routing and switching technologies, will be avilable in 12 to 18 months. They have asserted that customer investment in intelligent hubs and routers will be protected as they will be integratable into new architectures with advanced network management and migratory products to enable the transition from shared-media-based networks to switching-based networks in the future. However, the first reaction to the merger saw Craig Benson, chairman of Cabletron Systems Inc rubbing his hands with glee. He believes Cabletron will be able to build on its ties with Cisco Systems Inc, Wellfleet’s competitor in the router hardware market, and reap the reward at the expense of SynOptics. He said that SynOptics, Cabletron’s rival in hubs that connect personal computers with disparate networks, sells its products with Cisco routers. As a result of the merger, he believes that SynOptics’s customers will only be offered Wellfleet’s inferior routers and will turn to buy from Cisco and therefore Cabletron. Benson appears to be blowing in the wind. According to SynOptics, only the multimedia Model 3800, of the System 3000 range, uses a Cisco router card and at a joint press briefing Wellfleet and SynOptics went out of their way to stress that this product will be unchanged by the merger and will continue to use the Cisco router. Paul Trowbridge at SynOptics feels that Cabletron’s extraordinary press release belies the concern that the merger has caused smaller rivals. If customers had wanted to use Cabletron hubs with their Cisco routers, they would have done so before now but did not. Wellfleet and SynOptics’ existing product ranges will continue and appear to mesh well. And as all products conform to industry standards, they will all be compatible. The merged company reckons it will be able to offer a full range of network products and this might threaten the growth of fast-growing hu

b sellers like Cabletron.

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