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Marconi Gets a Boost

It's won the first order for its BXR-48000 switch, demonstrating the value of its US operations

September 16, 2002

3 Min Read
Marconi Gets a Boost

DALLAS -- NFOEC -- On the first day of the NFOEC tradeshow here today, Marconi plc (Nasdaq/London: MONI) announced the first customer for its BXR-48000 multiservice packet switch/router: the U.S. Government (see Marconi Wins Fed Switch Contract).

Industry sources greeted the news cheerfully. "It's nice to see they're announcing products after all the talk of restructuring, restructuring, restructuring," says Michael Howard, principal analyst and cofounder of Infonetics Research Inc.

And at least one source thinks the news has another upside as well. The source, who asked not to be named, says the BXR-48000 release, along with the company's new financial profile (see Marconi: The Deal Is Done), could be key elements in making the States-based part of Marconi attractive to potential buyers.

"In the past, Marconi's leadership policies overshadowed execution." Post-restructuring, the U.S. management of Marconi's business may have a freer hand, boding well for the company's new flagship. "The U.S. group are very smart and talented guys," says the source, calling its products "the best I've ever seen."

Marconi acknowledges the importance of the BXR-48000 to its strategy. "This is our leading switching and routing product," says spokesman Geof Becker.

Indeed, the development of the switch has long been said to be crucial to Marconi. The company received seed money from the U.S. Government (which agency was involved isn't clear), and spokespeople at U.K. headquarters acknowledge the engineers who worked on it were given cash incentives to keep them from straying during the company's acquisition-related upheaval and financial woes.

It's easy to see why the BXR-48000 is key to Marconi's strategy. As a multiservice switch, it's one of the products carriers are seeking to help them develop new services on existing cell-based networks (see Multiservice Switches). It's also a key element in large enterprises' network planning; and Marconi's government win points to its ambitions in that segment.

But today's announcement raises as many questions as it answers. First off, the size and scope of the government contract aren't clear. Marconi will only say the deal involves the Department of Defense. And so far, it looks like a one-shot deal. While Marconi says it's in trials elsewhere, it can't say whether it's in the running for awards at RBOCs, which are seen as crucial to the success of the future multiservice market.

It also seems all the parts of the BXR-48000 aren't ready yet. At present, the switch/router supports cell-based traffic at rates to OC48 (2.5 Gbit/s). Crucial support of cell-based OC192 (10 Gbit/s) isn't ready, although it's in beta testing and scheduled for delivery to the government "within a few weeks," according to the company.

It will be early 2003 before the BXR-48000 is equipped with IP packet capabilities, including support of Multiprotocol Label Switching (MPLS) and packet-over-Sonet, and even later when those are available for OC192. "We're driven by demand, and today most demand is for Asynchronous Transfer Mode (ATM)," says Marconi spokesman Jim Blew.

Indeed, Marconi's not alone in having some key features on its roadmap instead of its shelves. Multiservice core switch competitors such as Cisco Systems Inc. (Nasdaq: CSCO), Équipe Communications Corp., and Nortel Networks Corp. (NYSE/Toronto: NT) are all in the same space, waiting to add features and trying to line up key customers.

Meantime, Marconi appears to be striking out in another key direction, and rumor has it the company's planning a rollout of SDH products later this week. Spokespeople wouldn't confirm, however.

And they scoff at rumors that all or any part of the company may be for sale (other than the groups the vendor's earmarked for sale in its recent financial announcements, such as its outside plant and power group). "We're not talking about any sales. We just completed a major step in our restructuring," says Blew.

— Mary Jander, Senior Editor, Light Reading

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