"Heard On The Street" Column
Issue: October 1999
By: Frank Bisbee
Recently at the BICSI Conference in Reno, Nevada, Graybar (St. Louis, MO) and ITS/ETL unveiled a new program. At an invitation only luncheon, Graybar gave a presentation on the new Graybar VIP (Verified Independently for Performance) Program. The premise of the program as presented is that a need exists to independently verify the performance of high speed cabling systems so the customer gets what the customer needs. Graybar retained ETL to develop testing criteria for channel performance. We understand there will be two categories of performance testing available. However, those details will be made available later.
This is an ambitious program and we hope that Graybar will make the same "level" of commitment to this endeavor that Anixter has already made for years. If imitation is the highest form of flattery, then there should be lots of smiles at Anixter. The journey to success on this type of program is a long and expensive trip, but it always starts with the first step. We shall monitor and report on the footprints in the sand as the VIP Program develops. www.graybar.com
The Alltel Jacksonville Communications Product Center held their 1999 Networking Conference on September 23rd. The conference featured 3Com, BICC - General, Hubbell, and Adtran. Tim Livingston, Alltel's JCPC Manager, said, "The attendees reflected a much higher level of attention to performance and faster networks." www.alltel.com
Cisco Systems (San Jose, NY) has agreed to purchase Cerent Corp. (Petaluma, CA) and Monterey Networks Inc. (Richardson, TX) for about $7.4 billion. The widely reported acquisitions represent Cisco's biggest purchase to date, and its latest move to expand its already dominant role in the market for computer networking equipment.
The systems provided by both Cerent and Monterey effectively allow data and voice to travel as smaller packages across network pipes. The two purchases mark buyout-hungry Cisco's most aggressive moves yet into the market for sending data, voice and video on fiber optic cables. Analysts said the purchases should turn up the heat on competitors, including telephone equipment suppliers Lucent Technologies, Inc. and Nortel Networks.
Cerent's only product, the Cerent 54, is a box the size of a microwave oven that sits between the fiber optic cable and router or other device. Using sophisticated software, it organizes and compresses the data - whether voice, data or video - and vastly increases the size of the pipe through which that information is sent.
It also lets Internet service providers change the effective size of the data pipe, known as bandwidth, almost on the fly. Service providers - such as PSINet, a Cerent customer - can then allocate bandwidth in a matter of minutes rather than the several days now required.
"This will allow Cisco to penetrate more deeply what has been a traditional stronghold of Old World players, and that helps to explain why they're paying so much for it," said analyst Michael Cristinziano at Gerard Klauer Mattison & Co. (New York, NY).
Boards of both companies have voted in favor of the deals. Cisco will exchange 100 million shares of its common stock for all of closely held Cerent's shares and options. The purchase of privately held Monterey Networks is valued at $501 million based on the 7.3 million shares Cisco is paying.
Cerent did not come cheap. With the $6.86 billion Cisco is paying - together with the 6 million-share, or 9 percent stake, Cisco already held - the deal values each Cerent employee at $26 million. While small now, the market Cerent and Monterey tap is expected to grow into the billions of dollars in the next few years.
Currently, Cerent is losing money - it lost $29.3 million, or 54 cents a share, on sales of $9.92 million for the six months that ended June 30. Cerent was founded in 1997 and now has 287 employees, It said July 22 that it planned to raise $100 million through an initial public offering, but analysts said it was obvious Cisco had made Cerent an offer it could not refuse.
Monterey Networks makes cross-connect technology that boosts capacity deep at the core of an optical network. It is now testing products with Internet service providers.
The acquisitions show how Cisco's strategy has shifted in the last two years as the stakes rise and it takes on far larger competitors. Before, it focused on acquiring technology that helped its routers - its bread-and-butter products that shunt back and forth on networks - run as fast as possible.
Now, though, Cisco has set its sights on companies that are developing ways to transmit voice, data and video over a single network using ATM, or asynchronous transfer mode, and Internet Protocol, or IP, technology. At least 12 of Cisco's 40 acquisitions, including Cerent and Monterey Networks, have been related to the convergence of voice and data networks.
Cisco, Lucent and Nortel Networks, as well as smaller data networking and telephone equipment companies, are waging a pitched battle to make gear that lets service providers, such as cable and phone companies, run voice, data and video across one network. Such moves are rapidly expanding the size of the market Cisco is addressing. According to Cristinziano, in 1998 it was addressing a market worth $20 billion and had about 50% of it. But by 2002, because Cisco is aggressively moving into new market, Cisco's market opportunity will be $140 billion.
Cerent's and Monterey Networks' technology "is something service providers lust after, high-bandwidth optical equipment makes all the sense in the world," Cristinziano said. www.cisco.com
Cable Design Technologies Corporation (CDT - Pittsburgh, PA) has announced that it expects to exceed analysts' consensus estimate of $0.35 per share for its fourth fiscal quarter by more than 15%, which would represent an increase in excess of 40% over the third quarter. CDT attributed its current earnings momentum to strong business conditions, particularly in the network systems marketplace.
In commenting on the announcement, Paul M. Olson, President and CEO, stated, "It appears that Y2K spending is moderating and companies are refocusing on increased speed and bandwidth capacity of their network systems infrastructure. CDT has invested over $50 million building additional manufacturing capacity and installing state-of-the-art equipment and technology to be in a position to be one of the leading suppliers of these higher bandwidth products. CDT's copper-based structured cabling systems are capable of operating in excess of 300 MHz which provide at least 4.8 gigabit per second of bandwidth capacity. Our investments have also increased CDT's capacity to manufacture telecommunication distribution cables that are required to support the needs of the fast growing Internet." www.cdtc.com
Lucent Technologies, Inc. (Murray Hill, NJ) has announced plans to scoop up Exel Switching Corp. for $1.7 billion in stock. Lucent expects the deal, which places a $37 per share on Exel, to close by year's end and hopes to begin incorporating Exel's programmable switch technology with Lucent's own major switching platforms early next year.
The buyout would be Lucent's latest acquisition of a company with strong networking equipment and software. So far, the results of the buying spree have been positive, observers said.
For example, Lucent bought Ascend Communications Inc. in July 1999 for $20 billion. Prior to the acquisition, Ascend was in the forefront of the Internet access router market.
"What Lucent brings to Ascend is even more name recognition than Ascend had alone," which raises the visibility and the availability of the technology, said Gary Young, Marketing Manager at Atlanta Internet service provider Digitel Corp. Digitel started beta testing a new Lucent multiservice access router, the SuperPipe 95, whose underlying development was made by Ascend.
With an acquisition of Exel, Lucent hopes to use the Exel technology, which encompasses both hardware and software elements, as an open programming environment. The goal is to allow service providers and third-party developers to quickly write new services applications capable of running on either circuit-switched or emerging IP networks.
As such, Exel's media gateway and programmable feature server products are intended to complement Lucent's core switching platforms, the venerable 5ESS Switching platform, the newer 7R/E Packet Solutions hybrid packet and circuit line and the new SoftSwitch platform for next-generation environments.
Although the Exel products can be used to program applications for use on other vendors' core switches, Lucent hopes the Exel acquisition will attract more service providers to its own core switching platforms, officials said.
"An application, once written, and especially if it proves to be popular, can begin running on multiple platforms, not just on ours but also on our competitors'," said Dan Stanzione, Lucent Executive Vice President and COO.
In addition to its efforts to integrate Exel's products with its own, however, Lucent will devote considerable administrative resources to ensure the successful merging of the companies' respective corporate structures - a skill Lucent has sharpened as a result of its recent acquisitions.
In recent years, Lucent has engulfed 14 companies for a total of more than $30 billion. Those earlier deals have given Lucent impressive skills in managing mergers, said Frank Dzubeck, President of Communication Networks Architects, an industry analysis firm in Washington. For instance, employees at Ascend were impressed by Lucent's team approach to the integration process, "and the surviving entity was a merged entity rather than a Lucent-dominated entity," Dzubeck said.
Other components to Lucent's success with mergers is that past deals have occurred across Lucent's many divisions, making it easier for the company to manage simultaneous acquisitions, he said. www.lucent.com
Hurricane Floyd was the largest hurricane to approach the eastern U.S. in history. John P. Clifford, Vice President of REXEL DATACOM, said, "We certainly were lucky that the storm turned away from Jacksonville, Florida. The city really took the storm to heart and recognized the potential for damage. Our Jacksonville office was manned by a small crew to handle emergency situations and customers with mission critical applications. Luckily, we only had two calls all day." This is another fine example of the service quality provided by REXEL DATACOM. www.rexelusa.com
Anicom, Inc. (Rosemont, IL), a distributor of multimedia technology products, has signed an agreement to distribute the NORDX/CDT line of Integrated Building Distribution Network (IBDN) products throughout North America. NORDX/CDT (Pointe Claire, Quebec, Canada), a subsidiary of Cable Design Technologies, is a manufacturer of structured cabling components and solutions.
Scott C. Anixter, Chairman and CEO, stated, "We are very excited about the prospects for enhanced growth and profits through our partnership with NORDX/CDT." He continued, ". . . NORDX/CDT provides us with outstanding products to distribute."
Carl E. Putnam, President and COO, stated, "This is a terrific opportunity for Anicom, that will provide our North American contractor market with enhanced service through extensive inventory sales and technical support. The diverse product line from NORDX/CDT will be distributed through our North American stocking facilities." www.anicommm.com
Normand Bourque, NORDX/CDT's CEO, commented, "We are very pleased that this extended partnership gives us the opportunity to work alongside a leading distribution specialist such as Anicom. Through Anicom's expertise our structured cabling products will penetrate all corners of the rapidly expanding North American market." www.nordx.com
Berk-Tek (New Holland, PA), an Alcatel company, has introduced new indoor/outdoor buffer tube break-out kits designed for field termination of any loose-tube cable with field installable connectors.
William D. Charuk, Berk-Tek's Fiber Optic Business Manager, said the new break-out kits offer a small, simple and cost-effective solution for users who want to field-install connections. "The kits provide the most compact, easy-to-install break-out solution, requiring no additional hardware or space than that needed for terminating tight-buffered cable. Plus, they snap together without epoxy," Charuk said.
Berk-Tek's buffer tube break-out kits feature a 900-µm break-out assembly that is color-coded to match the fiber color scheme. The outdoor kits have clear Teflon® 900 µm color-coded tubes for easy identification. The furcation unit is available for any standard sized buffer tube.
The break-out assembly is available with 6- and 12-fiber kits with break-out tube lengths of 24" or 36". The different lengths offer users flexibility to incorporate a variety of hardware options.
Microtest, Inc. (Phoenix, AZ) has announced reduced pricing for its Fiber Solution Kit for fiber networks. Formerly listed at $1,295, the Fiber Solution Kit is now available for $995.
Comprised of FiberEye, a fiber optic power meter, and FiberLight, a fiber optic light source, Fiber Solution Kit addresses the challenges of installing, maintaining, and troubleshooting multimode, fiber optic local area networks. The Fiber Solution Kit is an easy-to-use tool that helps keep optical networks running at peak performance by allowing users to assess the power throughput of the optical fiber transmission paths quickly and accurately.
"The Fiber Solution Kit is the entry-level member of Microtest's growing line of fiber optic test products. With the addition of OMNIFiber to our line, we have elected to realign prices of our other fiber tools," said Mark Johnston, Director of Technology Development. www.microtest.com
Berk-Tek (New Holland, PA), an Alcatel company, has added two new members to its growing family.
The first is Gary F. Isleib, who has been hired as a Process Development Engineer. Isleib (Douglassville, PA) will be primarily responsible for developing improved manufacturing methods for Berk-Tek's line of enhanced copper products and will report to Raymond Littlefield, Berk-Tek Engineering Manager.
Isleib previously was a Design/Production Engineer for Micro-Coax (Pottstown, PA), with a primary responsibility for designing and developing semi-rigid coaxial cable to meet customer and market requirements. He also worked for Quality Microwave Interconnects, Inc. (Wilmington, MA); Yankee Atomic Electric Company (Bolton, MA); and Martin Marietta (Orlando, FL). He is a graduate of the University of Central Florida where he received a BS in electrical engineering and a veteran of the U.S. Marine Corps.
The second new addition to the Berk-Tek team is Ernest L. Hatfield, who has been appointed Vice President of Fiber Optic Cable Manufacturing at Berk-Tek's Fuquay-Varina, NC facility.
Hatfield will be responsible for strengthening manufacturing operations and the overall Fuquay-Varina organization to achieve the highest performance levels and to meet the company's strategic objectives for 1999 and beyond. He will report to William R. Francis, Berk-Tek's Executive Vice President of Operations and Technology.
Hatfield previously was General Manager for the Alcatel Shanghai Optical Fiber Cable Co., Ltd., an Alcatel joint venture that manufactures submarine, ADSS, OPGW and terrestrial fiber optic cable. Before that, Hatfield was Director of Manufacturing for Alcatel Telecommunications Cable's fiber and cable facility at Claremont, NC. He has also worked as a Plant Manager in Alcatel's fiber and cable plants. Before joining Alcatel in 1988, he worked in various manufacturing assignments for Union Camp Corporation, Corning, Inc., and Siecor.
Hatfield received a BS in electrical engineering from the University of Kentucky and also attended the University of Florida. He completed the Manufacturing Management Program at the University of Virginia's Darden School. He is also an U.S. Army veteran. Among his civic activities are the Critical thinking Institute, Junior Achievement and the Project 2000 Goal 4 committee.
A new cabling system from a Midwest company may solve LAN throughput problems that heretofore were undetectable by network managers. Prestolite Wire (Southfield, MI) has unveiled a cabling system for 100Base-T LANs designed to prevent bandwidth and data loss over Category 5 unshielded twisted pair (UTP) wiring.
The cabling system, called TrueNet, was developed to ensure that users upgrading from 10Base-T to 100Base-T get the full performance of the tenfold increase in bandwidth they expect. TrueNet consists of horizontal cable, patch cable, jacks and patch panels for connecting clients to servers. TrueNet is designed to protect Ethernet signals from impedance problems that sap performance and cause data loss.
For instance, if there's an impedance mismatch on the cabling between the client network interface card and the patch panel, and the patch panel and server NIC, throughput could drop off dramatically because frames would be dropped and have to be retransmitted. If 1% of data needed to be retransmitted, the data rate on a 100M bit/sec link would drop to 20M bit/sec, a decrease of 80%, according to Prestolite. Standards organizations have allowed a +/- 15 ohm variation in the impedance differential between Category 5 UTP cord and horizontal cabling. Prestolite has decreased that differential to +/- 3 ohms. The result, company officials say, is improved impedance matching between patch cords and horizontal cabling, resulting in less data being retransmitted. Lower retransmission means higher data rates.
Indeed, Prestolite is offering a five-year guarantee of zero bit error performance on its TrueNet structured wiring products. "There are a lot of customers who aren't really aware of the issues they have with their cabling infrastructure," says Esmeralda Silva, a LAN analyst at International Data Corp. (Framingham, MA). "If there's a tool that allows you to bring Category 5 cabling up to spec, it's valuable to the end user." Prestolite developed TrueNet in conjunction with Krone, a German company that develops cabling systems for high-speed data networks. TrueNet costs about $65 per node and is available now. www.prestolitewire.com
Tyco International Ltd. (Hamilton, Bermuda), a diversified manufacturing an service company, and AFC Cable Systems, Inc. (New Bedford, MA), a manufacturer of prewired armor cable, have announced that they have entered into a definitive agreement pursuant to which Tyco will acquire AFC Cable. AFC cable shareholders will receive a fraction of a Tyco share valued at $45.00 per share for each share of AFC Cable. The transaction is valued at approximately $575 million.
AFC Cable, with annual revenues of approximately $275 million, is a designer, manufacturer and supplier of prewired armor cable, flexible conduit, modular wiring systems and electrical fittings used in a wide range of electrical, voice and data distribution products.
"AFC Cable provides an excellent range of products that complement our Allied Tube & Conduit electrical products," said L. Dennis Kozlowski, Tyco's Chairman and CEO. "The combination of AFC Cable's offerings with Allied's electrical conduit, our steel support products and cable tray products will greatly enhance our value to electrical distributors. This acquisition, which will be immediately accretive to earnings, will also enhance our presence in the fast-growing do-it-yourself market."
Ralph Pappito, Chairman and CEO of AFC Cable, said, "This transaction provides exceptional value for shareholders of AFC Cable and allows our shareholders to participate in the future growth of Tyco. Our management team is very excited by the opportunities the combination with Tyco presents for both companies and our customers." The transaction, which will be accounted for as a purchase, is contingent upon customary regulatory review and approval by AFC Cable shareholders. The Boards of Directors of both companies have unanimously approved the transaction, which is expected to be tax-free for the shareholders of AFC Cable. Under the terms of agreement, the fraction of a Tyco share will be $45.00 divided by the average of the volume weighted average prices of Tyco shares on the New York Stock Exchange for the five consecutive trading days ending on the fourth trading day prior to the date of the AFC Cable Shareholder Meeting.
AFC Cable terminated its January 27, 1999 Merger Agreement with Thomas & Betts Corporation, subsequently allowing Tyco to sign the merger agreement with AFC Cable.
Microtest, Inc. (Phoenix, AZ), an industry leader in handheld cable certification products, has announced major additions to its OMNI cable test product offerings. Included is shipment of
OMNIScanner is one of the industry's most advanced handheld cable certification tools. Introduced in the summer of 1998, OMNIScanner is the first product to certify Categories 5, 5E and 6 cabling and provide measurements for Category 7.
Moreover, OMNIScanner is now the first and only product to feature patent pending TDNXT (Time-Domain NeXT) and TDRL (Time-Domain Return Loss) diagnostics. With the introduction of OMNIFiber, it is the only fiber certification tool to support measurements for both single-mode and multimode fiber cabling in a single unit. www.microtest.com
Berk-Tek (New Holland, PA), an Alcatel company, announced that it has been awarded up to $1 million in grants from the Pennsylvania Department of Community and Economic Development. The funds will support the company's $11 million expansion of its New Holland facility now underway.
Berk-Tek is adding 50,000 square feet of primarily office and additional manufacturing space to its existing 250,000 sq. ft. facility at 132 White Oak Road in Earl Township, Lancaster County. The expansion is expected to generate about 100 new jobs within the area.
William R. Francis, Berk-Tek Executive Vice President of Operations and Technology, said the state support includes four specific grants:
"Berk-Tek is extremely pleased by the responsiveness of Pennsylvania, the Governor's Action Team and the Department of Community and Economic Development in meeting our needs at this time. We also deeply appreciate the support of Earl Township and Lancaster County and its Planning Commission," said Francis.
With the expansion expected to be completed in November, Berk-Tek will be able to increase its monthly production of its high-performance copper cable to 18,000 miles from 12,000 miles. The cable is used for local area networks (LANs), as well as other high-speed data communications applications.
The project also includes construction of a state-of-the-art Alcatel Network Communications Center for technology development and training, as well as the addition of new offices, equipment and technology.
Berk-Tek was established in 1961 by Joseph L. Boscov with a $16,000 investment and in a two-car garage at his home at Sinking Spring, Berk County. First called Berkshire Technical Products, Boscov moved Berk-Tek to New Holland in 1985 and in 1993 sold it to Alcatel, the world's largest telecommunications firm with headquarters at Paris, France. Today, approximately 40% of Berk-Tek's employees still live in Berks County.
3Com and Mohawk/CDT announce a "Gigabit Ready" cabling service.
Mohawk/CDT identified as 3Com's preferred cabling partner.
3Com Corporation and Mohawk/CDT (Leominster, MA), a division of Cable Design Technologies Corporation, have announced a worldwide 1000BASE-T validation program designed to help large and medium sized enterprises prepare for the implementation of "Gigabit-Over-Copper" technology. The IEEE recently ratified the 802.3ab standard for Gigabit Ethernet over Category 5 cabling, with the first recommendation being to test a network's cabling plans. Based on the these standards, 3Com and Mohawk/CDT's program will help speed the implementation of 1000BASE-T products, ensuring customers can implement the new high-speed technology to support the growing network demands of today's e-Business culture.
To help customers comply with the IEEE's cable testing recommendation, 3Com will leverage its highly rated website www.3Com.com to offer this testing service with Mohawk/CDT. The program evaluates the customer's installed Category 5 cabling to determine whether the infrastructure is suitable for implementing 1000BASE-T. Performed by certified Mohawk/CDT contractors, the validation includes the following:
"Three trends are driving the demand for high-speed networking: the creation of a knowledge-based economy; the growing convergence of voice, video and data; and the phenomenal growth of the Internet," said Edgar Masri, Senior Vice President of 3Com's network systems business unit. "1000BASE-T puts the high end of networking within the financial reach of mid-sized companies. For 20 years, 3Com has led the way in the Ethernet market and, through innovative services such as the 1000BASE-T validation program, 3Com strives to continue to earn its leadership position."
"Advances in digital signal processing have extended the life expectancy of copper cabling for high-speed data transmission," said Chris DiMinico, Director of Network Systems, Cable Design Technologies. "High performance copper cabling will continue as the horizontal media of choice for current and next generation technology. Mohawk/CDT will continue to be a leader in infrastructure cabling, providing customer-focused products and services in a rapidly changing communications industry."
The 1000BASE-T validation program is currently available in the U.S. and is scheduled to be available in Germany, the United Kingdom, France, Belgium, Luxembourg, the Netherlands, Italy, Spain, Sweden, Denmark, China, Hong Kong, Singapore, Australia, Mexico and Japan by the end of this calendar year. www.mohawk-cdt.com
The new Adventum™ loose-tube, plenum-rated fiber optic cable that can be run from the outdoors directly into a plenum environment enabled an Ohio installer to generate some significant savings on the installation of a five-building LAN and WAN for a secondary school system in Medina, Ohio.
George A. Souris, President of Cabling Concepts, Inc. (Lakewood, OH) said that by using Adventum fiber manufactured by Berk-Tek (New Holland, PA), an Alcatel company, they were able to run from aerial to underground to an indoor plenum with no transition points, which produced about $10,000 in labor and materials savings.
Cabling concepts recently completed the large project that involved installation of nearly 8,000 feet of fiber backbone for the school's 100BASE-T Fast Ethernet LAN and WAN, as well as the installation of conduit between the buildings and ducts within the buildings.
TytonHellerman (Milwaukee, WI), the North and South American arm of Bowthorpe plc's cable management group - will officially change its name to HellermannTyton, which conforms to the name of the group's sister companies elsewhere in the world. Located in 26 countries, HellermannTyton provides global cable management solutions, and the name change is a reflection of the group's abilities to provide solutions worldwide. Major, global customers use HellermannTyton products and the name change facilitates global sales, operations and corporate recognition.
Jim Campion, Executive Vice President for HellermannTyton, explains, "HellermannTyton is a major force in global cable management. As our group companies work even closer togetber, our customers will find that the global research and development, engineering, operations, and sales and marketing teams will benefit them through greatly enhanced product offerings and streamlined global operations. We're easy to do business with on a worldwide basis, and the name change reflects that." Campion continues, "Nothing has changed in the management structure or day to day operations with any Bowthorpe cable management company due to the name change."
HellermannTyton's website address and E-mail will officially change, although prior Internet addresses will be maintained. HellermannTyton can be reached on the web at www.hellermann.tyton.com or E-mailed at firstname.lastname@example.org. All other corporate contact information remains the same.
HellermannTyton manufactures a wide range of cable management products including cable ties, tools, and accessories; wiring duct and raceway; cross connect products including patch panels and outlets; and an extensive variety of identification products including computer printable, preprinted, and hand writable labeling systems. HellermannTyton in the United States was founded in 1969 as an affiliate of Bowthorpe plc and continues to apply global technology and development to provide solutions locally.
The Association of Cabling Professionals (ACP) is developing into a Wired Community! Be sure to check this website TODAY for details on a free new interactive area within the site. Word has it that it is modeled on a highly successful site elsewhere on the Web. We also hear that the Grand Opening of this new part of Wireville will be attended by a cross-section of the most influential people in the cabling industry. This might well be the most important networking opportunity the cabling industry has seen in years! BE THERE!
Cabling Business Magazine is ALMOST FREE. You have to fill out a subscription renewal every 6 months. If you haven't been doing this, start NOW. Subscription forms are in the magazine and on the website www.cablingbusiness.com or call (214) 328-1717. This is a small sacrifice for such a big value.
Be sure and check the class schedule for Cabling Business Institute in Dallas. CBI has also added the ACP certified 200 course to their offering. www.cablingbusiness.com The have a world-class training facility with regular classes on installation, structured wiring with Category 5 certification, LANs, fiber optics and design.