A flurry of activity from network vendors has resulted in Alcatel becoming the latest telecoms manufacturer to buy its way into the datacoms area.
Following on the heels of already merged vendors such as Nortel and Lucent, Alcatel has acquired datacoms equipment manufacturer Xylan for $2 billion.
Olivier Houssin, executive vice president of Alcatel, said: 'Customers are now demanding integrated systems from information companies rather than separately from voice or data companies.'
Xylan will become the hub of Alcatel's enterprise networking activity, providing IP-based converged voice/data products. Both companies will also offer IP and ATM based products to their combined carrier customer base.
Alcatel already sells Xylan products and, according to Krish Prabhu, chief executive of Alcatel, the manufacturer now plans to 'flood the channel'.
However, despite purchasing Xylan, Alcatel will continue to sell Cisco hardware. 'We will continue to sell Cisco kit as it offers routers that Zylan doesn't,' said Houssin.
The moves is a continuation of a pattern started last year of telephone equipment makers being forced to expand their product lines amid the explosion of the internet and as the appetite for data grows. Nortel's acquisition of Bay Networks and Lucent's acquisition of Ascend are other recent examples.
According to analysts, Alcatel has come under increasing threat from the converged companies and networking giant Cisco.
IDC analyst Katy Hartley recently wrote in a report: 'Cisco is an impending threat to Alcatel's position in the Wan core as it enters the core infrastructure market. Traditional competition from Lucent and the combined Bay/Nortel may also threaten Alcatel's position.'
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