On the edge - Bay Networks strives to become one-stop network equipment source - related article profiles Bruce Sachs, executive VP and general manager - Company Business and Marketing - Cover Story

Communications News, Jan, 1997 by Jon Pepper

When Bay Networks acquired Xylogics in late 1995, it also acquired the services of Xylogics' president/CEO, Bruce Sachs. Last May, Sachs was put in charge of the newly-created Internet/Telecom business unit as part of Bay's strategy to provide complete solutions to defined market segments. "The idea was to create cross-functional teams comprising product management, marketing, engineering, senior management, sales, etc., that focus on nothing but Bay Networks product solutions in the Internet/Telecom service provider customer environment," says Sachs, general manager and executive vice president, Internet/Telecom and Remote Access Business Units (ITBU).

The idea also created managerial and technology challenges for Sachs. He wants his group to eat, breathe and sleep network designs, product requirements, and future needs and problems of our customers."

The technology focus is on what Sachs calls "edge access technology," which is "all the products and all the technologies that get you from the edge of the service providers to the customers: leased line routing, ISDN access, cable modems and so on." In the end, he says, "we want to provide one-stop network equipment shopping."

For the Internet/Telecom group, Sachs, objective is to create a billion-dollar-a-year unit within Bay -- more than twice its current revenues -- "within a couple of years."

Not all the technologies existed within the group, so Sachs has already overseen three acquisitions to fill out the line, and the management problem has been to integrate the pieces of Bay and the new acquisitions within the new group.

Sachs has a sense of urgency about it all -- an entrepreneurial eagerness that Bay expected from him -- and particularly about the market segment he is targeting: "We think that edge access is a huge growth marketplace. The entire edge-access product sector is not dominated by one vendor.

"In fact, it is rare to find a single vendor dominating more than one of the edge technologies and we believe that we are one of two companies in the world that owns a wide variety of data networking technologies placing us in a unique market situation-routing and ATM switching, and network management and the breadth of edge-access capabilities.

"In other words, we can build solutions that are highly integrated and solve the problems service providers face as their businesses transform. That is the core of Bay Networks, Internet/Telecom Business Unit strategy. We are focused on some of the large issues that service providers face as this goes from the world of maybe 2,500 or 3,000 service providers to a world of some consolidation and some real distinct differences among those service providers.

"We've been leading the market in defining the new services and differences within the competitive service provider market. Because we own the breadth of technology we do, we are one of the few that can solve the wide range of issues that exist and will exist for service providers."

Because the Internet covers such a wide variety of customer types, differentiation of services will become a necessity, especially as service providers are having their networks used not only for basic access but, in effect, for private intranets.

"When we talk to Fortune 500 companies, we try to explain to them: 'You don't have to connect all the remote offices to each other with leased lines as you may have in the past. Why don't you let us route things into a fat pipe into your headquarters and provide remote access to your traveling and other remote access users? It's our job to route them for you and provide easy and reliable remote access.'"

As an example, Sachs envisions an interactive game provider that does not want to build its own network. "The ISP can leverage its own nationwide network, and let the gaming customer dial into that network. Bay Networks can make it look like the gaming business's own private virtual network -- it's transparent to the gaming user."

The challenge for a service provider now is that it has problems guaranteeing real-time access for transaction processing, Sachs says, In trying to differentiate itself, the service provider wants to offer that kind of speed; if it can, then it runs into competition from the big telcos.

In the case of the interactive game company, the service provider runs into some tough problems: "For example," says Sachs, "you need to authenticate the interactive game customer in the headquarters of the interactive game company's computer room and not in the service provider's computer room.

"The same thing occurs in transaction processing: you are doing authentication in multiple places and the performance demands vary. If the customer is doing Web browsing at home, then the performance demands aren't that intensive. If the Web page gets delayed a bit, it is not a big problem. But if I am a Sega and running interactive gaming and there is a two-second latency in the update to the consumer's screen, then the game has just become useless."