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Siemens partners on Net-based phone gear

The German network equipment maker joins forces with Cabletron Systems spinoff Enterasys Networks to build Internet-based phone gear for businesses.

LAS VEGAS--German network equipment maker Siemens has joined forces with Cabletron Systems spinoff Enterasys Networks to build Internet-based phone gear for businesses, according to company executives.

The two companies have in recent months teamed to build new hardware that combines Siemens' voice products with Enterasys' networking equipment designed to shuttle data over office networks, said Cabletron Chief Executive Piyush Patel. The result is next-generation technology that combines voice and data traffic over a single connection based on Internet protocol (IP), he said.

"We have the IP expertise. They have the voice expertise. It's a natural partnership," Patel said in an interview here at the Networld+Interop networking industry trade show this week.

The offerings by Enterasys and Siemens will compete with Cisco Systems, 3Com, Avaya, Alcatel, and others that have built Net-based phone equipment that carries phone traffic over data networks.

In recent years, network equipment makers have touted the technology as a cheaper way to route phone calls compared with traditional phone systems. They argue that marrying voice and data services will make corporate networks easier to maintain and will result in new phone features such as unified messaging, which allows people to check their voice mail, e-mail and faxes over a phone or PC.

Patel said Siemens and Enterasys will unveil their product plans soon. The joint project by the two companies stemmed from a partnership in which Siemens sold Enterasys' networking gear in conjunction with its own voice products, Patel added. Siemens representatives could not be reached for immediate comment.

Analysts say the Siemens and Enterasys partnership is part of an emerging market that is poised to explode. A recent study shows the market grew from $34.1 million in revenue in 1999 to $192.8 million in 2000, but it was still just a tiny piece of the $20 billion traditional phone system market, according to technology consultants Synergy Research Group.

But the Net-based phone market will eat into the traditional voice equipment market within five years, growing to $548 million this year and $3.9 billion by 2005, according to the Synergy report.

Siemens previously had a failed joint venture with 3Com to build voice-over-the-Internet technology for businesses. 3Com and Siemens originally partnered for a $100 million joint venture in 1998 to develop telephony products for corporate networks. But the pair killed the partnership in mid-1999 after 3Com bought Net-based phone systems maker NBX.