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Compaq full-speed into networking

The PC giant launches its foray into high-speed networking, relying heavily on technology from start-up Extreme Networks.

Gigabit-speed equipment provider Extreme Networks has two things a start-up needs to be successful: a giant partner and a potentially hot product.

Multibillion-dollar PC giant Compaq Computer (CPQ) officially launched its foray into high-speed networking today, as previously reported, based largely on technology from the Cupertino, California-based start-up.

Compaq's licensing of Extreme's switching devices can only enhance the nascent firm's viability in a glutted market for high-speed networking gear based on the next generation of Ethernet, which runs at 1000 mbps (megabits per second).

But next week, Extreme may send shock waves through the industry with the announcement of a high-density desktop switch with gigabit support for about $100 per port for standard switching and about $150 a port for the addition of routing capabilities.

Compaq's move to shore up the high end of its networking business could signal a greater emphasis on what so far has been a largely forgotten component of the PC giant's product portfolio. "If we see something we like, we'll go get it," said Robert Murray, Compaq's director of marketing for North America, confirming the company's relationship with Extreme.

The company will offer two models: one with 16 10/100-mbps ports and 6 gigabit ports priced at $23,710, and a second with 8 10/100-mbps ports and 3 gigabit ports priced at $18,040. Both switching devices are shipping now.

Extreme will unveil the Summit 48 switch next week, a device that includes 48 10/100-mbps ports and 2 gigabit uplinks. Combined with an ExtremeWare software package for switching and routing functions, the company can offer standard switching for desktops or add more advanced routing functions, as needed.

The prices for the options are much lower than those of other start-ups as well as those of higher-volume players such as Bay Networks, Cisco Systems, and 3Com. Extreme chief executive Gordon Stitt said the company hopes to gain entry into customer accounts with the new switch and then pull enterprise-class products in its portfolio along with it.

"A lot of it comes down to starting with a clean slate," Stitt said, addressing the low introductory pricing for the gear.

"It's very aggressive and it's going to put a lot of the big guys on the defensive," said John Armstrong, an analyst with Dataquest.