April 8, 2003 9:00 PM PDT

Procket Networks unveils first products

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Five-year-old Procket Networks introduced its first products on Wednesday: a pair of terabit routers for major telephone and Web service providers, government agencies and very tech-savvy businesses.

Bruce Van Nice, product marketing director, said Procket Networks is the first to sell terabit routers, beating Juniper Networks, Cisco Systems and seven other companies to the market.

The equipment is aimed at telephone companies and others that need to move huge amounts of data at very fast speeds. At the heart of most of these networks is gear that operates at one gigabit per second.

While faster, there's no guarantee that the telecom industry, one of Procket's major potential customers, wants or needs Procket's products after being battered for two years by overbuilt networks, massive debts and a slowing U.S. economy. Some analysts predict further consolidation or outright failures among the company's prospective customers. The telecom bust "makes it difficult for start-ups who must compete on having better technical ideas," said Dataquest analyst Tim Smith.

A source at one of the four Baby Bells-?Qwest Communications, Verizon Communications, SBC Communications and BellSouth--said the reception for these high-priced baubles will likely be icy. "Cores (routers meant for the core of a network) that handle terabits? That's a ways off," the source said.

Procket's Pro/8000 routers are based on an operating system developed by Procket cofounder Tony Li, who also helped develop the software that runs all Cisco routers and high-end Juniper Networks routers. Van Nice indicates that the company intends to license the operating system to manufacturers.

Procket has been operating in a stealth mode for five years after raising $272 million. With Wednesday's announcements, the company is officially open for business. Its Pro/8801 router, which costs $65,000, is now available. The Pro/8812, which costs $237,000, will ship in the second quarter.

Twenty-five companies, including Japanese broadband provider NTTPC Communications are now testing the equipment. Van Nice did not disclose any information about additional companies in trials with the gear.

Procket believes its products are 30 percent to 65 percent less expensive than anything Cisco and Juniper now offers. It undercut its competitors--namely Cisco and Juniper--by building equipment out of chips that can be programmed, allowing the same chip to serve a variety of purposes. Most router companies make their equipment out of chips designed for only one purpose, which is more expensive but creates fewer operational problems.

"We want to challenge the status quo," Van Nice said.

A Cisco representative had no immediate comment. A Juniper Networks representative could not be reached for comment.


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