Bay targets old networks

When networking provider Bay Networks (BAY) was in the midst of serious financial woes last year, many industry pundits pointed to the company's relative lack of presence among sellers of gear to network carriers and Internet service providers as a source of its troubles.

In order to make up ground on dominant players in this space such as Cisco Systems, 3Com (via the U.S. Robotics merger), and Ascend Communications, Bay will release new gear targeted at a network that underlies all carrier layouts that ensures the services offered to the outside world are available and working correctly.

The new products, called the Access Communications Node (CAN) line, are highlighted by a module for the company's versatile System 5000 remote access platform, which is due in the first quarter of next year. Other stand-alone gear for data centers and remote sites will roll out in the fourth quarter of this year.

Bay officials hope that via support for old protocols that dominate this underlying network--such as OS, for Operation Systems, and X.25--the company can drive other elements of its networking strategy into network service provider accounts. Furthermore, via use of the System 5000, the company hopes it can gain a foothold in the large migration market, as carriers update their infrastructures.

The OS layer of a carrier network essentially provides the services that allow the front-end network (upon which the carrier provides services to customers) to run in a reliable and efficient manner. A study by the Yankee Group pegged the market for OS-based data networks to be $4.5 billion to $6 billion over the next five years.

"If you want to go after service providers, this is going after the heart," said William Atkins, Bay's director of business development and strategic planning for telecommunications systems.

A portion of the technology Bay will offer is derived from a partnership with communications infrastructure specialist ECI Telematics.

But challenges lay ahead for Bay as it moves to make up ground in the carrier and service provider segment, according to some.

"People buy what they know," said Deb Mielke, senior consultant for TeleChoice, a consulting firm focused on the telecommunications industry. "It's always hard to unseat an incumbent."

Mielke said the strategy is a good step for the company, however, and may give it an entree into one of the most lucrative niches--carriers and service providers--in the networking market.