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Fore makes gigabit bet

The cell-based specialist hopes to tie its ATM-based gear to the latest speed boost in Ethernet via the acquisition of Berkeley Networks.

Can you teach an old dog new tricks?

That's the question some are asking after Fore Systems, long a bastion of high-speed asynchronous transfer mode (ATM) networking technology based on cells, paid $250 million for a start-up in order to get into the race for a piece of the multibillion gigabit-speed Ethernet pie, a frame-based technology.

Fore already has a stable of Ethernet technology from previous acquisitions, but it has always seemed ancillary to the company's primary focus: providing ATM networks for corporate campuses and service provider networks.

Now the cell-based specialist hopes to tie its ATM-based gear to the latest speed boost in Ethernet--the dominant means to connect PCs to server computers and a network--via the acquisition of Berkeley Networks. The idea is to tie local network backbones to an internetwork of ATM, according to company executives.

"There's no doubt it gives [the Ethernet side of Fore] a tremendous boost," said Donal Byrne, vice president of marketing for Berkeley.

Berkeley is the latest to fall in a high stakes battle between the remaining Gigabit Ethernet start-ups, once a fertile niche that has slowly ebbed due to the acquisition appetites of the big networking players.

Some believe Fore itself is ripe to be taken out, given its singular specialty, but observers believe this latest move makes it likely that the Pittburgh, Pennsylvania-based networking firm will now remain independent, at least in the short-term.

"I really think that Fore needs to be in the frame business," said Craig Johnson, analyst with market watcher the Pita Group. "Acceptance and uptake, however, will be a challenge in the near-term."

On Wall Street, Fore's stock dipped precipitously in the aftermath of the Berkeley deal.

Fore, like a host of others, notes predictions that the market for Gigabit Ethernet is expected to grow to $1.5 billion, according to market researcher International Data Corporation.

One roadblock in the path of immediate results from the Berkeley deal is the lack of an interface into ATM-based layouts within the start-up's own devices. Berkeley executives said support for ATM within its own shipping gigabit-speed equipment will arrive in the first quarter of next year.