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Alcatel hopes security will get users to switch

European telecommunications equipment maker looks to push into corporate switching, a market long dominated by Cisco Systems.

Alcatel is focusing on security in an effort to gain a foothold in corporate switching, a market long dominated by Cisco Systems.

On Monday, the European telecommunications equipment maker announced the Automated Quarantine Engine, a new software product that applies a security policy to its enterprise switches, called OmniSwitches. The company also announced new relationships with endpoint security firm Sygate and Fortinet, a maker of Internet Protocol virtual private networks and firewalls.

Through these partnerships, Alcatel said it will be able to prevent and contain attacks on the network.

Cisco and Enterasys Networks have already announced similar planned programs. Cisco's Network Admission Control will integrate Cisco networking gear with software from three antivirus providers--McAfee, Symantec and Trend Micro. The integration enables networking products such as switches and routers to check for host integrity on devices connected to the network.

Cisco in June announced the first phase of those products and said it plans to implement the strategy on its routers first and add functionality to its LAN (local area network) switches in 2005.

Enterasys announced its products in February. Several networking companies and antivirus providers also plan to to provide similar functionality on a wider range of networking products.

Alcatel is using Sygate's host-based antivirus technology to ensure that PCs and other machines connecting to the corporate network are running antivirus software, personal firewalls and operating-system patches. If an endpoint is not properly secured, the Automatic Quarantine Engine will send the machine to a separate virtual LAN and automatically apply updates.

Through the Quarantine Engine, Alcatel switches will also be able to communicate with third-party intrusion detection and prevention systems. Once a worm or virus is detected, the Automatic Quarantine engine will locate the offender and place the infected device into a quarantine.

Because Alcatel does not have a security appliance of its own, the company plans to resell Fortinet's intrusion detection, VPN and firewall products along with its switches through its channel partners.

Alcatel has been focused on the enterprise market in North America since the late 1990s. In October 1998, it bought a company called Packet Engines for $315 million. A few months later, it spent $2 billion in cash on start-up Xylan.

While most analysts give the OmniSwitches high technical marks, the company has barely made a dent in the market. Cisco currently dominates LAN switching with roughly 70 percent market share, according to Synergy Research Group's first-quarter 2004 report. Alcatel trails behind Cisco and several other competitors, including Nortel Networks, Hewlett-Packard, 3Com, Extreme Networks and Foundry Networks.

Alcatel's strength is in the telecom equipment market. More than 70 percent of its $15.4 billion revenue in 2003 came from sales to wireline and wireless telephone carriers.

Sales in Europe account for about 50 percent of the company's revenue. North American sales make up only about 15 percent.

The company has mostly leveraged its strong Internet Protocol PBX business to sell IP data gear. But Brian Witt, director of product marketing, said the company is starting to change its strategy.

"This year, we are starting to focus more on data-only resellers," he said. "I would agree that the LAN switch market is dominated by Cisco. But there is still room for second-tier players like us. Our goal in IP networking is to lead the market in building convergence-ready networks that require high availability and high security."