Bay Networks is understood to be close to plugging a hole in its portfolio, following growing speculation that it would buy gigabit Ethernet startup Rapid City Communications.
According to US sources, Bay is believed to be on the brink of spending $200 million on Rapid City Communications to gain easy access to the company?s gigabit Ethernet technology.
Although Bay representatives were prevented from commenting on the proposed deal ? which is supposed to be concluded later this week ? the company admitted it had an ambitious timetable for product development.
Mark Hyland, reseller development manager at Bay, said: ?The quickest way to gain access to the technology would probably be to acquire a company. That?s usually the way it?s done.?
Alison Taylor, networking analyst at Dataquest, said Bay had to acquire a company that possessed that technology to get into the market on time: ?It?s not developing anything internally so it has got to acquire ? it?s a logical step.?
Last September, Cisco Systems bought Granite Systems for #220 million to plug its own hole in gigabit Ethernet technology.
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