ore Systems Inc., the ATM market leader, said last week its firs
t-quarter financial results would come in well below expectations. The news fueled fears that ATM is starting to fade, but the high-speed networking technology may yet settle into a comfortable niche in the local area, users and analysts say.
The Warrendale, Pa., maker of ATM LAN switching products estimates that net income for the quarter ended June 30 was down sharply from the year-earlier quarter, to the range of $4.7 million to $6 million, compared with $11 million a year ago. Revenue was an estimated $95 million to $97 million, up from $83 million a year ago.
Meanwhile, one of ATM's leading lights, Dave Beering, former senior telecom analyst at Amoco Corp., says he has left the oil company following its decision to pull widely publicized ATM plans. "Amoco had tremendous budget cuts and elected not to pursue ATM and a number of broadband networking initiatives," he says.
Beering's departure comes after the closing this spring of Aries, an oil-industry ATM test bed codirected by Beering and fun
ded by the American Petroleum Institute. Aries ended on schedule when funding ran out, says Beering, who adds that the project may be revived as a commercial venture early next year.
Another ambitious ATM deployment seems to be steaming ahead, albeit later than originally planned. McDonald's Corp. has started rolling out ATM at its Oak Brook, Ill., headquarters. This year and next, the company plans to install an additional 2,000 ATM nodes to the Oak Brook campus, extend ATM/ switched Ethernet to 20 regional sites, and pilot ATM carrier-based services.
ATM has other believers. Chrysler Corp. earlier this year began deploying ATM in its auto-design facilities in Auburn Hills and Plymouth, Mich., where CAD is the primary application. "Three years ago, when the decision was made, we needed guaranteed and consistent bandwidth for our design processes," says Chrysler network engineer Bob Rogers. "There was an up- front cost, but if we had done slow, piece-by-piece migrations to [progressively higher-speed]
Ethernet, it would eventually cost far more."
Still, ATM's cost and complexity are barriers for most users, particularly with the emergence of Fast Ethernet and the promise of Gigabit Ethernet. "We considered ATM, but in the local area, Ethernet with 100-Mbps trunks meets our needs," says Michael Bowles, senior staff consultant at Avon Products Inc. in Rye, N.Y. "It's simple and easy to implement." Avon is considering a Gigabit Ethernet switch from Extreme Networks Inc. in Cupertino, Calif., as an upgrade option.
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ore Systems Inc., the ATM market leader, said last week its firs
t-quarter financial results would come in well below expectations. The news fueled fears that ATM is starting to fade, but the high-speed networking technology may yet settle into a comfortable niche in the local area, users and analysts say.
