Xylan box has eyes for gigabit

By Robin Schreier Hohman
Network World, 09/21/98

Calabasas, Calif.

The Gigabit Ethernet market is hot, and Xylan wants in on the action. The company is pinning its hopes on an unannounced multiservice box called the Omni Switch/Router - a chassis-based device that sources say not only handles Gigabit Ethernet, but also ATM, token ring, FDDI and slower flavors of Ethernet.

Despite its all-in-one nature, the Omni Switch/Router has its heart in the gigabit world. In fact, the device is aggressively priced at less than $2,000 per port for Gigabit Ethernet, a move that's sure to force other vendors to react. The device is aimed squarely at the enterprise, either in the data center or wiring closet, depending on configuration, say those familiar with the company's plans.

The Omni product, to be announced next Monday, is in beta testing now and will ship at the end of this month. Xylan officials declined to comment on the switch.

Xylan has other announcements in the works, including:

The development of new Application Specific Integrated Circuits (ASIC) for its OmniStack line, which are expected to lower the price of the boxes and to ship by the first quarter of 1999.

The release of more details about OmniCore, a 160G bit/sec monster switch that will support either 48 Gigabit Ethernet ports or 24 OC-48 ATM ports. The OmniCore isn't expected to ship for about a year.

Includes Layer 3 switching

The Omni Switch/Router has 32 Gigabit Ethernet ports and 256 Fast Ethernet ports. As its name suggests, the box sports Layer 3 switching, which combines routing and switching in one box. It has a backplane of 22G bit/sec and a routing speed of 12 million packet/sec.

In contrast, the current OmniSwitch product has a total of 96 Fast Ethernet ports but no Gigabit Ethernet ports, and has a 256,000 packet/sec Layer 3 switch engine.

Users looking for more basic Ethernet will find that the 10/100M bit/sec ports will list for under $220 per port.

The higher density of the 10/100M bit/sec ports on the Omni Switch/Router will also enable Xylan to compete more effectively against Cisco's Catalyst 5000 and 5500 in the wiring closet, experts say.

The Omni Switch/Router will support up to two FDDI uplinks, something Xylan supplies only with its nearly obsolete PizzaSwitch, the precursor to the current OmniStack stackable line.

Xylan doesn't actively market the PizzaSwitch, although the company will sell the product if a customer specifically requests it. The FDDI modules will allow Xylan to market this switch as a smooth migration from FDDI to Gigabit Ethernet.

Xylan will also produce 32-port token-ring modules, for a total of 256 ports.

If the Omni Switch/Router looks familiar, it is because it has the same form factor as the existing OmniSwitch, and will ship in three, five and nine-slot configurations.

The Omni Switch/Router modules will come in the following configurations: four-port Gigabit Ethernet modules and 32-port 10/100M bit/sec autosensing modules. As in the OmniSwitch, one slot has to be occupied by a management module.

Any-to-any switching

The Omni designation refers to the ability to do any-to-any switching, one of Xylan's specialties. The OmniSwitch can do cell and frame switching, allowing ATM and Ethernet modules to switch in the same chassis.

However, the Omni Switch/Router works differently and only does frame switching. In fact, the ATM modules will only provide uplinks into an ATM switch.

The new switch uses the same Xylan Operating System as all of Xylan's switches, so it also has the same features, such as policy-based quality of service.

At least one Xylan user says he'll welcome the new switch. "I think routers as independent boxes are clearly at the end of their life cycle," says Tom Collins, telecommunications manager at 3M Corp. in St. Paul, Minn.

3M currently uses mostly Bay Networks routers but has chosen Xylan's switches for the company's corporate backbone. Collins is particularly happy with Xylan's ability to integrate switched Ethernet and ATM.

The Omni Switch/Router has been cloaked in a veil of secrecy, and until last week was code-named X-Frame. Xylan is so confident of the market for this switch the company has told Wall Street analysts that it expects the switch to account for one-third of the company's revenue in the fourth quarter of 1998.

Xylan's stock in slump

Xylan's stock price has been declining steadily for weeks, as have most other stocks, especially in the high-tech sector. However, Xylan's steep descent is a puzzle to many industry and financial analysts because the company has seen four good growth quarters, and is considered to have a technologically sound product line (see story, page 17).

Last week, Xylan went on a technology road show, trying to convince financial analysts that the company is in good shape, despite its declining stock prices.

The analysts weren't hard to convince, and many continue to recommend the stock as a buy or as a strong buy, saying the stock's real value should be in the $26 to $30 range. Last week, Xylan shares were selling for $13, a 52-week low.

Selling more than switches?

Takeover rumors are a constant in this business, and Xylan has been mentioned as a possible target of Alcatel and Lucent. To be fair, there's hardly a switch-ing company in existence that isn't being mentioned as a takeover target.

A recent news report that Alcatel was looking at Packet Engines brought even more uncertainty about Xylan, because Alcatel accounts for nearly 20% of Xylan's revenue, second only to IBM in the OEM market. Jeff White, Packet Engines' vice president of marketing, says the company doesn't comment on rumors.