Networkers gun for remote access
Networking players Cabletron Systems and Bay Networks gird themselves to do battle in remote access space.
Remote access is a general term used to describe the market for hardware that allows remote users to connect to computers. It could be anything from a modem or an expensive concentrator--essentially, a piece of hardware that contains hundreds of modems that users can connect to. The high margins and huge revenue opportunity are found in the concentrator--or remote access platform--space, especially given the stunning growth of interest in the Internet.
The reasons remote access is on the tip of so many tongues in the networking industry are simple:
First, corporate employees are increasingly using their laptop computers to gain access to their internal networks while on the road.
Internet service providers (ISPs) are continuing to expand their modem pools to keep up with explosive demand for Internet access and value-added network services.
Finally, companies are realizing that telecommuting programs can be implemented easily, potentially keeping valued employees from moving on to other job opportunities closer to home.
Growth in the sector is expected to be explosive. The Gartner Group consultancy predicts that there will be nearly 60 million users of remote access technology by the year 2000, with the figure doubling two years later. Those users will likely have more than one access method for using their modems and software, they say.
These factors have led all the major networking hardware players to expand their product lines. Most notable is 3Com, which immediately became a huge player in the market with its $6 billion acquisition of US Robotics.
A report compiled by the Dell'Oro Group on revenue derived from first-quarter 1997 sales in the overall remote access market shows that U.S. Robotics held a slim lead over Ascend Communications.
When breaking down segments of the market, however, Ascend has a substantial advantage in the lucrative remote access concentrator space, a booming niche that caters to large enterprise networks and ISPs, according to the Dell'Oro Group. Various rivals like Cisco Systems and Bay Networks have targeted this area for high growth potential over the next few years.
Bay is quickly filling in product holes in its remote access line (See related story) by adding a midrange platform for far-flung ISP sites and corporate enterprise networks. Cabletron also is following suit. The company is offering up new modules for the CyberSwitch remote access platform that support digital modems and shoring up its low end with a new box called the 5500, which supports up to 120 simultaneous remote users.
"It's just all come together," said Cindy Dames, a product manager for Cabletron who has focused on the market for the past eight years.
In the coming months, all these players will attempt to gain advantages in the eyes of customers by increasing the port density of their systems and lowering the cost per port. Analysts say the space will support a wide array of companies, but pricing could become a key selling point as expanding ISPs and corporations look to get the most bang for their buck.