Siemens AG this week officially announced that it would form a new US-based data networking company, called Unisphere Solutions, which it said will bring together all of Siemens' data and IP (Internet Protocol) activities together worldwide.
At a press conference on Monday in New York, Siemens officials said that the new company has been chartered to provide Internet service providers (ISPs) and telecommunications providers with end-to-end data networking applications. Unisphere will also provide products and services such as Voice over IP (Internet protocol) or Voice over ATM (asynchronous transfer mode) to enterprises that currently still manage their own networks.
"Customers are moving away from buying a product," said Martin Clague, chief executive officer of the new company. Instead, they want whole solutions from a single supplier, he said.
Convergence is also driving the deal. "The packet world and voice worlds are coming together. We feel confident. We know the voice world very well," said Anthony Maher, a member of the managing board at Siemens.
With Siemens' expertise in mobile telephony, optical transmission and wireline services: "We know the data and IP world -- we know it, but we want to know it better," which is one reason for forming the new company, Maher said.
The new company, based in Burlington, Massachusetts, is an amalgam of small data networking companies that Siemens has acquired in recent weeks, as well as numerous divisions at Siemens, according to Anthony Maher. Rumours of the acquisitions already appeared in the press last week. Those companies include Castle Networks, of Westford, Massachusetts, which delivers a platform for data networking technologies, as well as Argon Networks, of Littleton, Massachusetts, which makes a high-performance router, officials said at the press conference. Both companies have products in beta testing, Clague said. Also part of the new Siemens company is Accelerated Networks, based in California.
For its part, Siemens will contribute its Internet applications, voice over IP and voice over ATM (asynchronous transfer mode) groups, as well as its directory services group and its enterprise data systems group, all in the US, as well as a software technology information centre in Canada, according to Clague. The new company also will work closely with Siemens' optical switching group.
Additionally, Unisphere will work closely with 3Com, with which Siemens has a strategic alliance, as well as with Newbridge Networks.
Siemens wouldn't comment on what it had paid for the private data networking companies, but said that recent estimates in the [ital]New York Times were accurate. Those reports put the acquisition of Argon at $US240 million and of Castle at $US300 million, and said that Siemens would acquire a $US30 million stake in Accelerated Networks.
"We are taking the best of Siemens and a start-up culture and letting them work together," Maher said of the new company. The Siemens executives stressed that the company would be able to rely on the resources and sales of Siemens worldwide, which would give it an edge over other start-ups.
Siemens has been working on the concept for Unisphere since last spring, Maher said, when it knew it would reorganise its voice and data communications activities into one group called the Information and Communications Group.
The US is also a natural base for the company, he said, because that is where most of the innovations in the market are coming from. "We can move fastest on the ground here [in the US] where the speed is the fastest," he said.
The service provider market is a trillion-dollar business, Maher said, and the space for IP and data is as large as $US167 billion dollars, according to Maher. Siemens plans to invest some $US1 billion in the data/IP networking market, according to a company statement.
Unisphere will have main offices in the US, Canada, and Germany. It will have about 500 employees. In its current form, it has annual revenues of $US200 million, Clague said.