INTEL TO PURCHASE TRILLIUM
San Diego, CA — Intel, the world’s largest computer chipmaker, said that it would acquire privately held Trillium Digital Systems for $300 million in cash and unregistered stock in a deal aimed at strengthening its services for networking and telecommunications customers. The acquisition gives Santa Clara, Calif.-based Intel software products, support and other services that complement its communication silicon chip business, Intel said in a statement. The deal, which still must gain regulatory approval, makes Los Angeles-based Trillium a subsidiary of Intel and a part of the company’s network processing group.
“We expect Trillium, as an Intel subsidiary, to continue developing and supporting portable software solutions for the communications industry, while adding a new line of solutions that are optimized for the Intel Internet Exchange architecture,” Tom Franz, Intel vice president and general manager of the network processing group, said in the statement. Last month, Intel reported that its second-quarter earnings nearly doubled, reaching $3.5 billion, or 50 cents a share, excluding acquisition-related costs. That contrasts with a net profit of $1.78 billion, or 26 cents a share, in the second quarter of last year. However, Intel’s operating income, which excludes one-time charges and $2.3 billion in investment gains, increased by only 4 percent. Sales of chipmaker Micron Technologies accounted for much of the investment gain.
NORTEL TO BUY ALTEON IN $7.8 BILLION STOCK DEAL
San Diego, CA — Nortel Networks said that it had agreed to acquire Alteon WebSystems for stock it valued at $7.8 billion. The deal, set to close in the fourth quarter of 2000, is only the latest in a series of acquisitions that have helped Nortel become the world’s second-largest telecommunications equipment provider. Nortel’s deal comes a day after Corning said it had broken off talks to acquire Nortel’s fiber optics unit in a deal potentially valued at $100 billion. Shares of both companies slid on the news, with Alteon dropping 16 3/8, or 11.5 percent, to 126 5/8 and Nortel shares fell 6, or 8 percent, at 72 1/2 late on Friday morning. In a mid-morning conference call, executives at the companies contended that last Friday morning’s selloff was not related to the deal, pointing instead to overall “market volatility” and adding that other technology stocks were down as well. Under the agreement, Nortel will offer Alteon shareholders 1.83148 Nortel shares for each Alteon share. The estimated $7.8 billion purchase price is based on Thursday’s closing price of $144 a share for Alteon, and $78.625 for Nortel shares so represents no premium.
Nortel, based in Brampton, Ontario, said the purchase of Alteon, a leading provider of products that speed up network data transmission, would help it develop a cutting-edge Internet data center capable of delivering content efficiently and reliably at unprecedented speeds. Internet data centers are powerful combinations of servers, routers and other communications equipment used to run Internet Web sites and facilitate e-commerce transactions. Nortel said it hopes to incorporate San Jose, Calif.-based Alteon’s switching products into its technology, allowing it to integrate Internet data centers with its high-speed optical and three-giga-hertz (3G) wireless Internet technologies. Dominic Orr, president and chief executive of Alteon, said the two companies “share a common vision of high performance content delivery services that exploit the high-performance Internet and create new profit opportunities for service providers.” He added that the merger would greatly expand both companies’ reach and give them a leading edge in capturing market share in switching technology. The proposed acquisition of Alteon is only the latest in a string of recent purchases by Nortel. The Canadian company already acquired Architel, a provider of telecommunications systems software architecture, this year.
RED HAT CLOSES WIRESPEED COMM. ACQUISITION
Research Triangle Park, N.C. — Red Hat, Inc., a leader in open source Internet infrastructure solutions, completed the acquisition of privately-held WireSpeed Communications Corporation Inc., a leading developer of network and telecommunications components for embedded systems software. The transaction was valued at $30.5 million based on an average closing price of Red Hat’s common shares for a five-day period ended June 15, 2000. Under the terms of the transaction, Red Hat issued 1,525,365 shares of Red Hat common stock in exchange for all of the outstanding securities of Huntsville, Alabama-based WireSpeed. The acquisition has been accounted for as a purchase. WireSpeed will scale Red Hat’s embedded systems business, which is enabling top companies worldwide to quickly create and deploy next-generation Internet infrastructure solutions, including appliances, handhelds and other post-PC and deeply embedded devices. International Data Corp. (IDC) research predicts that by 2002, there will be more than 55 million handheld and notebook-style information appliance devices and that by 2005, shipments of these appliances will exceed shipments of PCs. Connecting these devices to the Internet and private networks will be essential.
Matthew Szulik, president and chief executive officer, said, “The addition of WireSpeed extends our strategy of providing expertise in embedded, networked and handheld devices that connect to one other over the Internet. In working closely with companies such as Hitachi and Fujitsu to develop next-generation computing devices, we are finding that there is a rapidly increasing demand for embedded systems software, particularly in telecommunications and networking.” International Data Corp. (IDC) research states that paid Linux shipments grew faster than any other server operating system over the past two years, and their preliminary figures for 1999 show Linux shipments hold 24.6 percent of the server operating system market, up from 15.8 in 1998. IDC also states that Red Hat holds 50.2 percent of Linux vendor market share and that Red Hat Linux is by far the most popular distribution, preferred by 68.7 percent of U.S. Linux users. Research firm Netcraft, Inc. ( http://www.netcraft.com ), states that as of May 2000, 36 percent of all public Web sites run on Linux-based operating systems, making Linux the most popular choice for deploying public Web sites. IDC research shows 40 percent of all spending on Linux servers is for Internet related applications, firmly entrenching Linux servers in the Internet infrastructure. Finally, IDC predicts that by 2002, there will be more than 55 million handheld and notebook-style information appliance devices and that by 2005, shipments of these appliances will exceed shipments of PCs.
GIGANET AND NETWORK APPLIANCE FORM RELATIONSHIP
Concord, MASS. — Giganet, Inc. a leader in VI- based data center networks, and Network Appliance, Inc., the leading provider of network-attached data access and content management systems, announced a joint development relationship to enhance Giganet’s new VI/IP technology for Network Appliance systems. Giganet’s VI/IP products will enable new levels of performance over existing networking infrastructures, allowing network storage environments to take full advantage of the effectiveness of the Virtual Interface (VI) Architecture standard. “Network Appliance’s relationship with Giganet will result in an optimization of the performance and benefits of VI networking,” said Mark Santora, senior vice president of marketing, Network Appliance. “With industry leaders like Network Appliance and Giganet working jointly to deliver a standards-based and simplified approach to storage management and deployment, customers will benefit from solutions that provide increased scalability and high performance.”
NAS environments support demanding applications such as Web-based e- commerce, data warehousing, and decision support, and have communication requirements that hinge on the constant, rapid transfer of high volumes of data and files among servers and/or appliances. This creates a level of administrative, intersystem communication that drains significant CPU resources, slowing response time and access to critical data. By implementing high-performance VI-based networking through VI/IP, NAS environments will be able to break the network resource bottleneck and unlock the full performance potential of Network Appliance filers over existing Ethernet networks. “We are very excited to be teaming with Network Appliance on such an important technology initiative,” said Gareth Taube, Giganet’s senior vice president of sales and marketing. “Our VI experience and Network Appliances’ network-attached storage expertise will provide the kind of performance required for today’s demanding e-commerce environments.” Giganet has also recently joined with Network Appliance in the Direct Access File System (DAFS) Collaborative. DAFS is an effort to promote a standard for VI-based file system access across a network.
SYNOPSYS TO ACQUIRE INNOVEDA’S VIRSIM TOOL
Marlboro, MASS. — Innoveda, Inc. announced that it has signed an agreement with Synopsys, Inc., Mountain View, Calif. in which Synopsys will acquire Innoveda’s VirSim electronic design software tool and related assets for a purchase price of U.S. $7 million. VirSim is used as a debugging and analysis environment with hardware description language simulators including the Synopsys’ VCS Verilog simulator. The purchase is subject to customary closing conditions. Both companies expect the purchase to be completed in the next several days. Previously, Synopsys licensed VirSim from Innoveda on an Original Equipment Manufacturer (OEM) basis. Innoveda will retain rights to the product source code and plans to integrate the functionality of VirSim with its suite of verification tools. Other VirSim OEM agreements will be transferred to Synopsys. Innoveda customers who purchased VirSim bundled with other products from the company will have continued support from Innoveda and will be transitioned to an integrated version of the technology over time.
“VirSim is no longer a strategic product for us and now competes in a market crowded with competition,” said Will Herman, Innoveda president and CEO. “This agreement works well for Innoveda. It supports our strategic focus of delivering integrated solutions for system-level design by eliminating OEM support while allowing us to retain the technology for future products and improving our cash position.” Innoveda will be reducing its revenue targets for the balance of the year by approximately US $1.2 million due to the elimination of revenue from VirSim royalties. VirSim provides an integrated set of debug and analysis capabilities for use with Verilog and VHDL simulators on Unix and Windows platforms. The tool has an intuitive user interface that enables designers to interactively analyze large amounts of simulation data. The tool’s database is compatible across all platforms, enabling simulations on a Unix server and analysis of results on a PC. Visit http://www.innoveda.com for more information.
EMC AND VERITAS ANNOUNCE EXPANDED ALLIANCE
Mountain View, CA — Data General, a Division of EMC Corporation, and VERITAS Software Corporation, the data availability company, announced an expansion to their alliance in which Data General will bundle a full-feature version of VERITAS ClusterX for Microsoft Cluster Server (MSCS) with its Cluster-in-a-Box. Previously bundling a limited version of VERITAS ClusterX for MSCS, Data General will now provide a fully functional version, allowing customers to benefit from its comprehensive cluster-management functionality for managing multiple clusters and clustered applications from a single console. As part of this expanded relationship between the two companies, Data General will also resell VERITAS ClusterX for NLB, offering customers a complete Windows 2000/Windows NT solution for their clustered Internet infrastructure.
“VERITAS ClusterX is the ideal solution for providing high availability for MS Exchange, SQL Server, IIS and other applications in rapidly growing clustered Windows environments,” said Steve Colman, vice president of worldwide OEM operations, VERITAS Software. “Data General customers will now have access to an integrated hardware/software solution that’s ideally suited for those environments, simplifying the purchase and configuration of high availability clustering.” “This alliance between our two companies provides greater consolidation solutions for customers currently using Data General Cluster-in-a-Box,” said Andrei Shishov, vice president of product planning and management for Data General, a Division of EMC. “VERITAS ClusterX provides the key features demanded by our customers for reducing cluster cost-of-ownership, while increasing the efficiency of systems management.”
QLOGIC COMPLETES MERGER WITH ANCOR COMMUNICATIONS
Aliso Viejo, CA — QLogic Corp., a leading SAN infrastructure provider, announced that it has completed its merger with Ancor Communications, Incorporated. Earlier both QLogic and Ancor shareholders approved the transaction. Pursuant to the merger, which is structured as a tax-free reorganization for U.S. Federal Income Tax purposes and is intended to be accounted for as a pooling of interests, QLogic will exchange 0.5275 shares of common stock for each share of Ancor common stock. Appropriate regulatory clearances have already been obtained. The merger with Ancor extends QLogic’s extensive portfolio of products based on Fibre Channel technology. QLogic expects to leverage key customer relationships to produce synergistic Fibre Channel solutions for the rapidly growing SAN marketplace.
“The merger with Ancor enhances QLogic’s strength in the SAN marketplace,” said H.K. Desai, chairman, president and CEO of QLogic. “Employees of both companies have been actively planning the successful integration of the business. Our customers will benefit from complete, tested SAN solutions, as well as faster time-to-market deployment of Fibre Channel products.” QLogic expects the transaction to be neutral to slightly accretive to earnings for the calendar year ending December 2001, and accretive to QLogic’s fiscal year ending March 2002, excluding the potential impact of operational and strategic benefits. The Company also noted that it will take a charge to earnings to account for merger and related charges in the September quarter. Visit http://www.qlogic.com for more information.
GENUITY AND HP INK STRATEGIC ALLIANCE
Burlington, MASS. — Genuity Inc. and Hewlett-Packard Company announced the signing of a multi-year strategic alliance to accelerate the delivery of hosted e-services to global enterprises and service providers. Under the agreement, Genuity designates HP as its primary hardware provider for its Windows 2000-based Web hosting services. HP becomes a new sales channel for Genuity’s managed e-business hosting services and plans to create a dedicated Genuity sales team within the HP sales organization. The strategic alliance was formed to capitalize on the rapidly growing managed and custom hosting market, which Forrester Research recently predicted U.S. revenue alone would reach nearly $18 billion by 2004.
The two companies also intend to team to create innovative solutions in key markets, including business-to-business (B2B) private exchanges. The new solutions will fully leverage HP’s leadership in providing always-on infrastructure, services and consulting with Genuity’s comprehensive E-Business Network Provider platform – an integrated combination of best-of-breed Internet access, managed hosting and value-added services including Virtual Private Networks (VPN), security and voice-over-IP (VoIP). The Genuity and HP partnership will accelerate the development and delivery of B2B and business-to-consumer (B2C) extranets and secure managed intranets. Genuity and HP also will pre-configure HP servers in Genuity’s data centers to help accelerate provisioning time and dramatically decrease customers’ time-to-market for their B2B and B2C extranet and intranet solutions. “This is a powerful alliance of two industry leaders uniquely positioned to deliver managed e-business solutions to the market,” said Joseph C. Farina, president and chief operating officer of Genuity. “Partnering with HP is yet another step taken to focus on our value-added services such as Web hosting, to accelerate provisioning time and deliver integrated solutions to our customers.”