Filling out its LAN and campus backbone product line, Lucent Technologies, Inc. today announced it will acquire Gigabit Ethernet start-up Prominet Corp.
The move gives Lucent a diversification path beyond its recent ATM-heavy push into data networking. In September, Prominet began shipping its P550 Cajun Switch, providing standard 10M Ethernet as well as 100M and 1G switching capacity.
Next year Prominet will begin trials of the P550 Cajun Switch with Integrated Routing, which adds Layer 3 routing capability as well as prioritization based on Layer 3 and Layer 4 application information.
For Lucent, the acquisition fulfills a recent promise to offer customers a choice of ATM and high-speed Ethernet LAN infrastructures.
In September Lucent unveiled a campus ATM backbone switch, the AX 500, as part of its new family of data products. Both the Lucent AX 500 and Prominet Cajun switches will be able to feed LAN traffic to Lucent new MX 1000 multiservice ATM enterprise switch, scheduled for delivery in the first quarter of 1998.
For Prominet, the acquisition by the $26 billion Lucent alleviates worries about escalating product-development costs. "When you are growing like we are, the cash consumption is incredible," said Menachem Abraham, Prominet's president and CEO. After the acquisition closes next March, Abraham will join Lucent as president of its newly christened Gigabit Ethernet Switching Products division.
"This has turned out to be a far more crowded market than any of the startups had anticipated," added David Passmore, president of Decisys, Inc., a consulting firm in Herndon, Va. "Unless they get acquired, a lot of them won't make it."
Lucent executives did not seem fazed by the prospect of offering two competing LAN technologies when it begins bidding for enterprise networking business in earnest next year.
"We expect Menachem's team to be religious zealots for gigabit Ethernet, and our ATM team to be zealots for ATM," quipped Bill O'Shea, president of Lucent's Data Networking Systems group.
A purchase by Lucent instead of one of the Big Four internetworking companies may have been Prominet's best option, given that its Marlborough, Mass. headquarters is located close to Lucent's data networking organization in Concord, Mass.
"A lot of the networking companies have their plates full," Passmore said.
Like traditional rival PBX vendor Northern Telecom, Inc., Lucent has concentrated its internal data development on ATM because of its voice heritage, given ATM's inherent support for voice, video and data.
"We didn't have a gigabit Ethernet switch in development," O'Shea said. "We always planned to enter this space through acquisition."
The move will put pressure on Nortel to enter the high-speed Ethernet market to complement its Magellan frame relay/ATM family of enterprise, campus and branch switches, Passmore said.
Senior Editor Robin Schrier Hohman contributed to this story.
