Full Story Full Story


Cisco Targets Rapidly Growing Market for Enterprise ATM Switches By Acquiring ATM Assets of LightStream Corporation

San Jose, Calif., Dec. 8, 1994 -- Cisco Systems, Inc., today announcedthat it has signed an agreement with LightStreamCorporation (Billerica,Mass.) to purchase LightStream's industry leading enterprise-class ATMswitching assets and technology in exchange for $120M (US). The newlycreated Cisco ATM Enterprise Business Unit will be based in Billerica. Theagreement is subject to receipt of certain government approvals and isexpected to be consummated in January 1995. Cisco expects that theagreement will result in a one-time charge against after-tax earnings ofbetween 20 and 25 cents per share in the company's second fiscal quarter of1995 as a write off of in-process LightStream R&D.

LightStream, formed in 1993 as a joint venture between Bolt Beranek andNewman (BBN) and Ungermann-Bass (now UB Networks), has developed one of themost advanced enterprise-level ATM switches on the market, the LightStream2020. DataQuest estimates that the market for this class of ATM switchwillexceed $1B in calendar 1998. Another industry analyst firm, the YankeeGroup, predicts an average annual growth rate of 182 percent for thismarket over the next three years.

In addition to the LightStream agreement, Cisco has also signed acomprehensive business agreement with BBN that includes the formation of astrategic alliance that involves the joint marketing of BBN's capabilitiesin the area of internet services and the use of Cisco products in theseservices.

"Upon completion of the acquisition, Cisco will be the only networkingcompany able to offer its customers a choice of all the key technologiesneeded for the switched internetworks of tomorrow -- enterprise ATMswitching, workgroup ATM switching, LAN switching, and routing," said JohnChambers, executive vice president of Cisco.

"We are particularly pleased with this agreement," Chambers continued,"because LightStream's industry-leading ATM technologists share our visionof a customer migration to ATM that will be enabled on the strength ofvalue-added software. This is much akin to our own CiscoFusion blueprint for scalable ATM-based networks.

"Cisco's experience in designing, building, and supporting complex,global computer networks should also work to speed market acceptance ofcurrent and future LightStream technology," said Chambers.

LightStream and the Four Types of ATM Switches

The current generation ATM technology that Cisco will acquire fromLightStream is generally considered to be that of an enterprise-class ATMswitch. An enterprise switch is usually located on a customer's premisesand provides multimedia transport services, including data, voice, andvideo, for private ATM networks. Unlike a basic ATM service multiplexor,an enterprise ATM switch has the capacity for local switching andintelligent services. The allocation of bandwidth, management of theentire network, and the provision of value-added services, such as routing,virtual LANs, and circuit emulation, are key attributes of enterprise ATMswitches. With the LightStream 2020,Cisco will bethe only major internetworking vendor to offer an enterprise ATM switch.

Workgroup-class ATM switches, such as Cisco's currentHyperSwitchA100,as well as ATM switches from companies such as 3COM, Bay Networks, and ForeSystems, play a different role in switched internetworks. Workgroup ATMswitches are largely used to connect power users and create departmentallocal area networks inside a single large building or a small campus. Inindependent testingfrom LANQuest Laboratories earlier this year, Cisco'sHyperSwitch A100 proved to be the only available workgroup ATM switch thatcould be relied upon not to lose data in a high-performance, client/servernetwork architecture.

There are also two types of larger ATM switches on the market todaythat are typically used for public ATM networks. The first, described asWAN access ATM switches, are typically located within a central office orexchange of a PTT or service provider. WAN access ATM switches typicallyprovide either frame relay or SMDS services in addition to ATM. Theseswitches, in turn, provide low-cost access to very large, central officeswitches, which comprise the core of a service provider's ATM network.

Earlier this year, Cisco demonstrated complete interoperability amongthe LightStream 2020 enterprise ATM switch and Cisco 7000router at Interop 94 in Atlanta. The data andvideo demonstration showed how switched internetworking could integratemultimedia applications in a financial trading environment.

Agreement Details

Upon final approval of the agreement to purchase LightStream's ATMassets and liabilities for $120M, LightStream's current-generation product,the LightStream 2020, will be immediately sold through Cisco's global saleschannels, including the company's direct sales organization in the UnitedStates as well as selected channel partners.

LightStream employees, including over 60 engineers, will remain basedin Billerica, Mass., and will operate as an independent business unit,called the ATM Enterprise Business Unit.

Cisco Systems,Inc. is the leading global supplier of enterprisenetworks, including routers, LAN and ATM switches, dial-up accessservers,and network management software. These products, integrated by Cisco'sInternetwork Operating System (IOS) link geographically dispersed LANs,WANsand IBM networks. Cisco is headquartered in San Jose, California and inthe U.S. is traded under the NASDAQ symbol CSCO.

Web Content Display Web Content Display
Web Content Display Web Content Display

Web Content Display Web Content Display

Stay Connected

Cisco Facebook @CiscoSystems on Twitter Cisco on Google Plus (+)
Cisco on LinkedIn Cisco on Pinterest Cisco on Youtube
Cisco - The Network RSS Cisco - The Network Podcast on iTunes Mynewswire Email - Cisco Newsletter
Web Content Display Web Content Display
Web Content Display Web Content Display
Web Content Display Web Content Display

Web Content Display Web Content Display

MyNewswire Subscription

Subscribe to MyNewsWire
Sign up now for free.

Our email newsletter, MyNewsWire, is your source for the latest Cisco news, press releases, features and videos. We'll help you stay up-to-date on technologies, events, innovations, and more. And now, you can get it as often as you like—free.