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Alteon speeds ahead with new deals

Gigabit start-up will announce partnerships with SGI and Network Appliance, as well as new software to allow quick access to server data.

Gigabit-speed start-up Alteon Networks continues to make deals and deliver new gear that could separate it from a crowded field.

The San Jose, California-based company, which was founded in May of last year, has focused on developing networking hardware and accompanying software that uses next-generation Gigabit Ethernet technology to offer high-speed connections to server computers.

Alteon has also been early out of the gate with new product and with signing up partners to resell its gear, which could be a key advantage as the market shakes out, according to industry observers.

That trend will continue with the announcement of new deals next week with server vendors Network Appliance and Silicon Graphics.

The company has already inked reseller deals with server giant Sun Microsystems and computing power NEC, which will focus its efforts on overseas markets.

"Distribution is the name of the game for success with these gigabit switch vendors," noted David Passmore, president of the Decisys networking consultancy.

In conjunction with the new deals, Alteon will announce a software upgrade for its Aceswitch family of switching hardware.

An Aceswitch optimized with the new transport protocol software allows one switch connecting multiple servers to become a "front end" for data requests to those computers.

Using the software, the switch can balance requests so that no one server in a server "farm" is overloaded. Company officials said the technique could be particularly useful for Internet service providers (ISPs) and content-hosting companies with a large dependence on server performance. The new software will debut by the end of the year, with a $3,000 price tag. The currently shipping Aceswitch 110 is list-priced at $8,995.

Alteon may be making enough moves to carve out a lucrative niche in the gigabit-speed networking gear space. A shakeout is predicted, however, as soon as funding for the densely populated army of start-ups dries up.

"This is just an incredibly crowded field," said Passmore. "It's unfortunate so many people chose to jump into the market--there's too much money chasing the exact same market opportunity."