Compaq buys into Ramp Networks

Compaq (CPQ) has made an undisclosed equity investment in Ramp Networks, which makes network connectivity devices for small and medium-sized businesses. It's the second major investment Compaq has made in networking this year.

Under the deal, Compaq will license technology from Ramp, and the two companies will work together to develop remote access products, said Ed Okkola, vice president of the communications product division at Compaq.

While neither company would disclose future product plans, it seems likely that the products will be aimed at the small business/small office market. Ramp specializes in simplified, all-in-one connectivity devices for small groups, said Mahesh Veerina, Ramp's president. One of the company's key products is the WebRamp M3, a connectivity package that allows small offices to hook up to the Internet through ordinary phone lines. It retails for approximately $439.

The size of Compaq's investment in Ramp was not disclosed. Ramp is privately held and has raised approximately $21 million, including the Compaq investment, in three rounds of financing. Ramp will likely attempt a public offering within the next 18 months, said Veerina.

In April, Compaq purchased Microcom for close to $280 million. Microcom makes PC modems and remote access server chassis for Internet service providers. Compaq, a market leader in PCs and server systems, said it will use Microcom's expertise to introduce new remote connectivity products.

The Ramp investment will complement the Microcom purchase, added Cynthia Schrock, director of marketing in the communications group at Compaq. "We're interested in building a line of remote access products," she said.

Compaq has bought its way into the networking hardware market, plucking NetWorth and Thomas Conrad in 1995 to offer switches, hubs, and adapters.