Cisco makes big friend to help in telecom push

The networking giant has released a number of products in the past year, such as Net-based telephones and other telecommunications systems, with an eye to pushing out telecom stalwarts such as Lucent Technologies and Nortel Networks.

Although the new Net-based technology is less expensive, it has not yet met with broad acceptance in the business community. Cisco, however, believes the market is ready to explode and intends to use its new alliance with NEC to integrate the companies' voice equipment and software, sources said.

As previously reported, NEC's products will work with Cisco's spread of Internet-based voice technologies for businesses, called Avvid.

NEC and Cisco also plan to develop more products under the agreement. NEC will provide customer service for the venture's voice systems, according to sources.

Cisco already has a reseller agreement with NEC in Japan and a joint marketing agreement in Australia. NEC is also a Cisco integrator in the United States.

Separately, Cisco executives yesterday said the company plans to internally develop technology to transport Internet traffic over vast distances using fiber-optic technology.

Industry insiders have said a hole in Cisco's optical-networking strategy is technology that can send Net traffic quickly over large distances, such as between Boston and Los Angeles. Start-ups such as Corvis and Qtera, now part of Nortel Networks, specialize in such gear.

Corvis has been seen in the past as a Cisco acquisition target. But Kevin Kennedy, senior vice president of Cisco's service provider line of business, said the company plans to release new technology from its acquisition of Pirelli by the first half of next year to address the strategy hole.

In addition, Kennedy admitted Cisco suffered a "blip in customer intimacy" in its high-end Internet router business that has allowed rival Juniper to win contracts for its own gear. Kennedy, speaking to reporters at a Cisco conference in San Francisco, said Cisco discovered its problems in the third quarter of last year and has corrected them.

Sales of Cisco's high-end router, called the GSR 12000, continued to grow during this time, but Kennedy said the company "lost a seat" with some customers by promising too much and not delivering. Juniper has garnered nearly 23 percent of the high-end router market in the past two years.