Cisco launches software for new Internet devices

Susan Taylor

OTTAWA: Cisco Systems Inc. launched a new software on Monday that will help
power the proliferation of new Internet devices set to flood the market, but
experts suggest it won't spark a torrent of sales any time soon.

Cisco, the world's largest maker of data networking equipment, said it has
developed a range of software for routers and servers using Internet Protocol
version 6 (IPv6). It will be available at the end of May. The IPv6 standard
supports a virtually limitless supply of Internet addresses, which are needed
for equipment that connects to the Web, including everything from personal
computers and cell phones to fridges and cars.

Advocates of the six-year-old standard say it is needed because the world
will run out of Internet addresses in 2005 using the current technology,
Internet Protocol version 4, which supports just 4 billion addresses. But
analysts and fund managers suggest Cisco's new products won't unleash a surge of
demand.

"It's certainly an enhancement to the platform and I wouldn't want to
take that away from it," said Martin Pyykkonen of C E Unterberg, Towbin.
"But it's not like some new particular software that's just going to take
the market by storm." Europe and Asia are strong advocates of the standard,
which is seen as critical to the next generation of mobile phone networks they
are planning.

North America, amid a spending freeze prompted by a slowing US economy, is
unlikely to adopt the new technology any time soon, experts say.
"Unfortunately, right now, demand is not there for anything," said
Michael Cohen, co-manager of the Alpha Analytics Digital Future Fund, which does
not currently hold Cisco shares. He added that telecoms company demand is
unlikely to recover in the US for another nine months.

What's more, North America controls 74 per cent of the world's Internet
addresses and there is no urgency to prepare for third-generation networks,
which require "always-on" Internet access and addresses, amid a
patchwork of wireless technologies.

"The real question that I have is why didn't they do this earlier,"
said Cohen. "Cisco is the premier networking company globally - the way to
stay that (way) is to always be first in the space." Cisco, which three
years ago began to offer IPv6 downloads from its Web site, said it launched the
new technology to meet customer requests that stemmed largely from Japan, Korea
and Europe, said Patrick Grossette, Cisco's IPv6 product manager.

"We also know that people have to plan and learn the new protocol, so by
starting now we expect that we can just improve the learning curve," he
said. "If you look at service providers, they need at least six to nine
months before introducing a new service."

The announcement comes as the IPv6 Forum, an industry-led task force
organized to promote the standard, meets with experts from around the world in
Ottawa over the next three days. "This is a strategic step for IPv6 as it
engages Cisco into a world-wide undertaking which will benefit and accelerate V6
deployment in production sites," said Latif Ladid, president of the IPv6
Forum which is meeting this week. "It's a milestone."

Cisco, which said it will add more IPv6 products as demand grows, is
considered to lead this market ahead of such competitors as Nortel Networks
Corp., Alcatel and Lucent Technologies Inc., analysts said.

"While many vendors have been focused on delivering the wireless
Internet or the optical Internet, Cisco has been working on integrating these
and other technologies into the current Internet," said Stephen Deering in
a statement. Deering is a lead designer of the IPv6 standard who is also a
top-ranking designer at Cisco.

(C) Reuters Limited 2001.