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Compaq hasn't forgotten networks

Amid a flurry of talk about acquisitions and direct sales, Compaq continues to roll out products that connect PCs and servers to networks.

Amid a flurry of talk concerning acquisitions and direct sales of PCs, Compaq Computer (CPQ) continues to roll out products that connect its PCs and servers to networks.

Although Compaq entered the networking market two years ago with splashy acquisitions and high expectations, the product line has taken a back seat to the growing wars in the PC and server markets, according to some industry observers. The company's networking prominence in the public eye has also been hampered by two internal reorganizations.

The latest rollout offers more fodder for skeptics who question Compaq's networking prowess since the company also announced a multibillion dollar stock deal for server systems veteran Tandem Computers. (See related story)

Analysts also wonder how Compaq will sell its networking offerings, especially in light of recent machinations over a direct sales model for its PC division. With little to differentiate Compaq from competitors in the networking area, such as 3Com and Intel, the company appears to be relying on name alone, according to some.

Nevertheless, the company will ship two new hubs, two new switches, and routing enhancements in the third quarter of this year. It will also continue to target small and medium-sized businesses with Ethernet-based networking gear.

"They're trying to continue playing in a game that's already been set," noted Craig Johnson, principal analyst for Current Analysis. "The opportunity exists for them, there is no doubt. Hewlett-Packard has made a lot of money here."

The company will introduce the Netelligent 5226, a new 24-port, 10-mbps Ethernet switch with two 100-mbps uplinks. The model is priced competitively, in the less than $100 per port range, but could face stiff competition due to a lack of standout features, according to analysts.

Another switch, dubbed the Netelligent 5708, offers eight autosensing 10/100-mbps ports of bandwidth for about $300 per port.

Compaq will also offer users two 24-port autosensing 10/100-mbps Ethernet hubs in managed and unmanaged configurations. The units can be stacked in racks of five hubs. They are priced at a little over $2,500 for the unmanaged version and $4,300 for the managed version, placing them in the middle tier in the Ethernet market. The boxes also include support for Fast Ethernet uplink modules.

As part of the launch, the company will also deliver low-end, unmanaged 10-mbps hubs in configurations of 5, 9, and 17 ports with prices around $15 per port. "This looks like a complementary add-on business," Johnson observed.

Compaq will also augment its 8500 series router with a software upgrade that adds IP firewall capabilities to the box and roll out a new version of its Netelligent management software, which is bundled with all of the company's gear. The new version includes support for hierarchical network maps and alarm filtering, among other features.

As part of the announcement, Compaq will introduce two new 56-kbps fax modem cards and two network controller cards.