Tech Industry

Cisco to deliver gigabit gear

Initial products and release dates are set in stone, with the first additions rolling out immediately.

Rumors, road maps, and reality: That has been the progression of Cisco Systems' (CSCO) closely watched strategy for Gigabit Ethernet, the next generation of the dominant networking technology for connecting PCs and server computers.

Rumors have abounded in recent months that the leading networking company's acquisition of Granite Systems in September 1996 was not resulting in expected products. To quell that notion, the company took the unusual step of announcing a road map and showing off initial products at this past fall's Networld+Interop, the largest trade show for the networking community--even though the new gear was not expected to ship for some time.

Now initial products and release dates have been set in stone, with the first additions rolling out immediately, to be followed by more gear by the second quarter.

"We think we're positioned pretty well in terms of Gigabit," said CEO John Chambers during the company's most recent quarterly earnings call. "We're a little bit later than I'd like to be."

As the rumor mill worked overtime, competitors such as Bay Networks and 3Com have moved forward with shipment of gigabit-speed gear.

But Cisco's release schedule may have been boosted by word last week of a delay in final approval of the Gigabit Ethernet standard by the Institute of Electrical and Electronics Engineers.

Cisco executives said the recent snag in ratification of the final standard for Gigabit Ethernet will not delay the rollout of their gigabit-speed devices, despite previous comments that stressed the need to make sure the standards work was finalized.

"It's always nice to have products out sooner than later," said Soni Jiandani, director of product marketing within Cisco's enterprise line of business. "But there is going to be some hesitancy due to the fact that the standard has been pushed out. We've always maintained that we will be there when customers demand it."

Given Cisco's monstrous installed base of equipment in enterprise corporate networks, some wonder whether the company will take a competitive hit due the arrival of its equipment relative to Bay and 3Com.

"Cisco has clearly had trouble with Gigabit Ethernet, but Cisco can have all the troubles it wants with Gigabit Ethernet," said Fred McClimans, CEO of market watcher Current Analysis. "No one will ever really know exactly what was going on."

McClimans noted that it made sense for Cisco to accelerate its Gigabit Ethernet rollout, given the fact that the company continues to meet analysts' estimates despite wild fluctuations in several overseas markets, particularly in Asia. For example, it continues to find revenue streams despite significant downturns in Japanese business.

Cisco executives believe they will have an advantage vs. its well-healed competitors and the plethora of gigabit-speed start-ups due to a flexible line of Gigabit Interface Converters (GBICs)--essentially a piece of hardware that goes into every port on a switch chassis.

While others may have to make wholesale upgrades to equipment once a standard is finalized, Marthin Debeer, product line manager for switching, said Cisco will be able to simply replace this piece of equipment, about the size of a credit card.

Included in the rollout is a new five-slot Catalyst 5505 switch and a base chassis to house forthcoming gigabit uplinks, called a Supervisor Engine. Both are available now. Gigabit-speed modules with two and three ports will ship next quarter; a nine-port module will debut this summer. To address routing support, the company will introduce a module for the popular Cisco 7500 line this summer.

Jiandani said the market for Gigabit Ethernet should follow the path of fast Ethernet. That technology experienced limited deployment in the immediate aftermath of final standard ratification and started to take off only when networking card companies combined the speeds of original Ethernet with 100-mbps fast Ethernet.