Lucent buys into gigabit Ethernet space: Acquisition strengthens footprint

Lucent Technologies announced yet another major move in its effort to conquer the data networking business: the acquisition of Prominet Corp., an up-and-coming maker of gigabit Ethernet switches.

The acquisition, a transfer of $200 million of Lucent stock, is the vendor's first foray into the heavily hyped gigabit Ethernet space. Lucent did not have its own such switch in development and has been planning to acquire a gigabit Ethernet player for some time, said Bill O'Shea, president of Lucent's Data Networking Systems group.

"There was a lot of excitement around gigabit Ethernet at the Networld+Interop show [two months ago]. There is a huge Ethernet universe, with 80% of the network connections today being Ethernet-based," said O'Shea. Recent reports have predicted the gigabit Ethernet industry will grow to $1 billion by 2000.

Prominet, based in Marlborough, Mass., has been shipping its P550 Cajun Layer 2/Layer 3 switch for only three months and may not be the most prominent member of the emerging vendor field. However, O'Shea said the company's well-developed product and management team, led by President and CEO Menachem Abraham, were keys to the acquisition.

"We're ahead of many established players, and we've positioned ourselves for fast growth," said Abraham. The Cajun is a 10/100/1000 Mb/s switch with a seven-slot chassis and 45.7 Gb/s of total backplane.

Lucent will market the Cajun as it own switch. It is unclear how Lucent will further integrate gigabit Ethernet technology with its existing products. The acquisition belies some of the initial friction between gigabit Ethernet vendors and asynchronous transfer mode switch vendors that occurred early this year, when both factions locked horns over which was the best solution for LAN deployment.

The acquisition is the third major LAN-related strategic move Lucent has pulled since September when it formed the new data networking group. The recently announced Livingston Enterprises acquisition and Yurie Systems partnership also targeted emerging LAN access business opportunities.

"Key areas of growth for us are intelligent switching, access, network management and the combination of all our offerings in these areas," said O'Shea.