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Networking vendors revamp

The most important network in 1996 was, of course, the Internet but while the good old LAN was overshadowed by news driven by the Net, the networking industry was far from static this year.

The most important network in 1996 was, of course, the Internet but while the good old LAN was overshadowed by Net news, the networking industry was far from static this year, both in terms of technology and business shake-ups.

Much of the activity in the networking industry was an attempt to retrofit existing infrastructure and software to fit the new demands of the Internet.

In the network operating system arena, the Microsoft ( MSFT) Windows NT juggernaut rolled on. The company debuted a series of technologies involving Java and ActiveX scheduled for release over the course of 1997. The beleaguered troops at Novell (NOVL) meanwhile decided to repackage NetWare as IntranetWare.

In November, the company also took a stab at making an industry standard of Novell Directory Services (NDS). In 1997, the company will try to spread NDS across as many platforms as possible in order to create a market for a variety of services packages.

Banyan Systems (BNYN) had a similar idea in moving its StreetTalk directory service to Windows NT. Both companies would like to see their directory services--a kind of networking address book--become the standard for cataloging and updating Internet addresses, as well as LAN addresses.

All the major LAN players, Cabletron Systems (CS), 3Com (COMS), and Bay Networks (BAY) continued to offer their own distinct visions of local area networking in 1996.

The most evident trend was driven by the idea that routing is a legacy technology and switching, based on the open basic standard of the Internet the Internet Protocol (IP), is the wave of the future. But here again, all of the major networking players --Cabletron, 3Com, and Bay Networks --offered their own variations on a switch-based approach to IP networks.

For wide area networks, the 800-pound gorilla of networking, Cisco Systems (CSCO) continued to dominate despite increasing competition. Nonetheless, adoption of asynchronous transfer mode (ATM) in the wide area finally started catching on in a significant way, with Fore Systems (FORE), IBM (IBM), and numerous others flooding the market with options.

On the network management software front, the suite became the essential tool for the LAN. Vendors of all stripes tied special-purpose LAN tools to enterprise management consoles to help IT departments grasp the true complexity of their networks from end to end.

But the trend that garnered the most headlines this year was that networking companies of all sizes opened their checkbooks in an effort to diversify their offerings by acquiring smaller companies instead of trying to develop new technologies in-house.

Cisco Systems set the standard early in the year with its $4 billion acquisition of StrataCom. The acquisition gave the networking monolith an immediate and formidable market presence in the carrier markets for frame relay and ATM technology. Cisco followed that by plucking start-up Granite Systems in September and Netsys Technology in October. Other companies followed its lead.

Lucent Technologies ( LU) acquired Agile Networks to boost its networking portfolio with Agile's "virtual LAN" software. 3Com bought OnStream Networks to penetrate into the network services and Internet service provider markets. IBM's $750 million acquisition of Tivoli Systems consolidated the systems management market and created a formidable foe for Computer Associates Unicenter product.

Predictions for 1997
"Obviously, the hot spots are going to center around the continued adoption of LAN switching, competitive pricing on 100-megabit switching solutions, and pretty substantial growth in Fast Ethernet on the shared side, given that prices have come down to all-time lows...There's going to be a lot of positioning as far as Gigabit Ethernet. In terms of the LAN vendors, 3Com, Bay, and Cabletron will try to gain an increased presence in the WAN space. Having a WAN presence may just mean having a remote access product line."
--Esmerelda Silva, analyst with International Data Corporation

"The Aberdeen Group has come up with the concept of the public-private switched network. This explains the phenomenon of Cabletron seeking the high-end as well as Lucent going out and acquiring Agile Networks. The equipment manufacturers are building products that can be sold to the carriers as well as the LAN infrastructure. I think this will be a very important trend in the coming year."
--Samuel Alunni, senior networking analyst at Aberdeen Group

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