Investing in IP switching Technology gets boost against Cisco's proposed tag switching

When Cabletron Systems joined a host of Ipsilon Networks Internet protocol switching supporters last week, it bought not only into the technology but also into the company. Under terms of the new agreement, Cabletron will invest $20 million in Ipsilon.

Most of Ipsilon's other 20-plus partners have struck deals to use the company's IP switching technology. And though early adopter Digital Equipment Corp. also made capital investments, Cabletron's stake is the largest to date.

"Cabletron needed high-level routing functionality that is compatible with its SecureFast [architecture]," said Fred McClimans, chief executive officer of Current Analysis, Ashburn, Va. Until last year, Cabletron had an edge/routing resell relationship with Cisco Systems, he said.

Ipsilon's IP switching will become core to Cabletron's strategy over time, McClimans said. By investing in the company, Cabletron gets a higher level of attention and access, as well as a potentially good return on investment, he said.

The Internet today is primarily made up of routers, said Trent Waterhouse, Cabletron product manager of LAN switching. Instead of tying centralized routers together, customers can upgrade to IP switching, augmenting existing networks for a more efficient and effective plan for the future, he said.

Relative newcomer Ipsilon gets a sound endorsement for its technology and more capital to continue developing IP switching. The technology is pitted against Cisco's proposed tag switching, another IP-based switching technology not yet on the market.

"This is a huge credibility announcement, as well as a channel for sales," said Larry Blair, Ipsilon's vice president of marketing. "This puts Cabletron squarely in the debate of IP switching vs. tag switching.

The two companies will demonstrate product interoperability, including IP multicasting for Layer 2 and 3 switching, at Networld Interop in Las Vegas, May 5-9.