Laurel hitches wagon to Marconi

Marconi and Laurel Networks this week announced an OEM arrangement whereby Marconi will resell Laurel's edge router.

Marconi's Broadband Routing and Switching group will offer Laurel's ST200 router under the Marconi brand name BXR-5000. Marconi will market the router to the federal government and global service providers.

"This deal was directly driven by customer demand," a Marconi spokesman says.

The companies will also engage in joint sales, marketing and product development endeavors. Marconi did not purchase an equity stake in four-year-old Laurel, the spokesman says.

Many young start-up companies are being forced by prospective customers into relationships - including being acquired in piece or in whole - with larger, established vendors. Service providers and large enterprises are skittish about dealing with start-ups with unproven service and support infrastructures and limited financial resources.

The Marconi/Laurel arrangement is the latest in a recent string of such deals involving makers of edge routers and switches - Alcatel acquired TiMetra Networks, Tellabs purchased Vivace Networks, and Ciena bought WaveSmith Networks. That Marconi did not acquire a stake in Laurel led one analyst to issue a caveat on the relationship.

"Laurel still needs to find a partner that is willing to provide more financial assurance and support facilities to customers that are leery of buying equipment from a start-up," says Joe McGarvey of Current Analysis. "It’s unlikely that service providers will perceive a strong enough relationship between Marconi and Laurel to enable them to overcome their reluctance to doing business with a start-up, at least until the partnership can generate measurable results in the federal government."

McGarvey nonetheless viewed the relationship positively.

Like Laurel's ST200, the BXR-5000 scales to 160G bit/sec per rack and supports high-density aggregation of Layer 2 and Layer 3 services -- such as Gigabit Ethernet and IP -- into a multiservice core over OC-48 and OC-192 ATM or packet-over-SONET trunks. The BXR-5000 will be bundled with Marconi's BXR-48000 960G bit/sec multiservice core switch.

Marconi says the Laurel arrangement complements a similar activity Marconi has with Riverstone Networks. Under that relationship, Marconi is combining its softswitch with Riverstone's Gigabit Ethernet routers for voice-over-IP opportunities, mostly in Europe, the Middle East and Africa.

Riverstone, however, is attempting to generate more business in the federal government industry to offset sluggish sales to service providers, so the Marconi/Laurel arrangement appears to be a setback for Riverstone.

Not so, says Riverstone. The company is addressing U.S. government opportunties via direct relationships with integrators, VARs and resellers, a spokeswoman says. Marconi is helping Riverstone tap government business overseas, she says.

Marconi has been selling into the federal government for seven years and has installed $1.3 billion worth of equipment. The company would not comment when asked if the Laurel arrangement is in response to the $875 million RFP issued by the government last week to upgrade the Defense Information Systems Agency communications network.

Marconi's Broadband Routing and Switching group, comprised mostly of FORE Systems, a company Marconi/GEC acquired in 1999, is based near Laurel in Pittsburgh. Many former FORE Systems officials started up Laurel right after Marconi's acquisition of FORE.

This story, "Laurel hitches wagon to Marconi" was originally published by The Edge.

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