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THERE ARE LOTS OF NEW PRODUCTS FROM WHICH TO CHOOSE. AND THE GOOD NEWS IS THE PRICE DIFFERENTIAL IS DECLINING.
Gigabit Ethernet technology is a reality. Customer shipments of Gigabit Ethernet products began in Q2 97 and are steadily rising. Products are now generally available from most Gigabit Ethernet vendors. The market is heavily populated with vendors and the competition is strong. The Gigabit Ethernet standard was extended to provide a viable solution for multimode fiber optic problems but is expected to be ratified in June 1998.
The industry has mushroomed from just a few vendors with Gigabit Ethernet products to more than 40 vendors with more on the horizon. More Gigabit Ethernet products were announced at NetWorld+Interop 98 in May. More than a dozen of these companies are start-ups that developed the initial Gigabit Ethernet products. Some of these startups have been acquired by the leading networking vendors. Others are hoping to be acquired by major vendors.
Acquisitions began last year when Bay Networks picked up Rapid City Communications in June 1997. Lucent Technologies announced in December 1997 that it had acquired Prominet Corporation, another start-up and a leader in Gigabit Ethernet switching. Then Cabletron Systems announced its acquisition of Yago Systems, a leader in Gigabit Ethernet switching and routing. (Cabletron had previously held 25 percent of Yago's capital stock.) Cabletron also acquired Digital's Network Product Business Unit, which developed Digital's GIGAswitch, a large-scale Gigabit Ethernet switch. Rumors are circulating about the imminent acquisition of start-up Packet Engines. Packet Engines, which was instrumental in initiating the Gigabit Ethernet market, produces a large-scale switch, a full-duplex repeater, and a peripheral component interconnect (PCI) network interface card that it began shipping in mid-1997. Undoubtedly, there will be more acquisitions of start-up companies by the end of the year.
A NEW PARADIGM
Where and for what purpose is such massive bandwidth needed? Is there a large enough demand for a market to support an industry that has grown to the size that the Gigabit Ethernet industry has become?
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