Compaq and Intel have agreed to work together to develop networking products designed to give them a leading position in the departmental switching and access market. But Compaq will choose 3Com, whose market Intel is aggressively targeting, as its network interface card (NIC) supplier next week.
The Intel deal covers joint licensing, engineering and product development for NICs, switches, hubs, remote access servers and digital subscriber line (DSL) products. It is a blow to Intel?s rival 3Com but Compaq?s NIC contract, which supplies cards for its reseller configure-to-order programme, could prove more lucrative for 3Com as it guarantees sales. The alliance with Intel, the latest of many deals between networking and hardware companies, aims at future development and sales - and many such alliances collapse before generating money for the partners.
Compaq and Intel representatives said they will develop Gigabit Ethernet and xDSL remote access servers and network adapters, hoping to help customers migrate to Gigabit Ethernet. Compaq?s vast indirect channel resources should help the alliance win business, analysts said, although some products may be sold through its growing direct business. Alan Lutz, senior vice president of Compaq?s communication products group, said: "We?re certain this joint effort will inexorably alter the landscape of the networking marketplace."
One analyst said both Intel and Compaq are weak at the high end of the market for hubs, switches and routers and could be aiming to launch a combined challenge to 3Com, Cisco and Bay Networks in those fields. He said both partners are industry heavyweights but do not have the same position in networking, something they aim to change by joining forces. The companies expect to launch jointly developed products during the fourth quarter.
3Com revealed Compaq will announce on Tuesday that it will become "a key supplier" of NICs for the PC and server vendor?s configure-to-order programme, under which the supplier and its resellers assemble PC models to customers' order rather than building up inventory (see Newswire 23 September) but did not offer any more details about the deal.
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