Speculation is growing that remote access company Shiva will be the next takeover target in the merger-crazy networking market.
Analysts point to the company's recent poor financial performance and claim it will be squeezed on two fronts - by Microsoft on the client access software side; and by newly merged rivals such as Ascend and Cascade, which could prove too large for Shiva to challenge in its core markets.
Investors worry that, as network vendors make remote access a built-in part of a wide range of products, Shiva will lose its market space. It is further challenged by the increasing use of the Internet to reach corporate data from distant locations.
The rumours that Shiva would be taken over were sparked by the defection of chief financial officer Cynthia Deysher last month, only weeks after the vice president of research and development, Guy Daniello, also quit the company. However, chief executive Frank Ingari said network buyers want to have multiple suppliers and that no one vendor can offer everything.
Facing claims from users and analysts that Shiva's technology will have a limited role in the world of the Internet, Ingari retorted that it would refocus emphasis on to newer technologies, such as its tariff management offerings, designed to reduce corporate telephone bills, and its tunnelling products for creating secure routes across public networks.
He also denied reports that research and development investment, which was 12 per cent of revenue last year, would be cut following Daniello's departure. Shiva's partner Northern Telecom will contribute an unspecified percentage of the R&D budget this year, and is inevitably mentioned by some analysts as one of the possible would-be buyers.
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