Cisco Offers Some Holiday Cheer for Local Networking Players
Wonderware Adds Space to New Lake Forest HQ; VitalStream Plans Reverse IPO
TECHNOLOGY by Andrew Simons
Networking kingpin Cisco Systems Inc. has been singing a yuletide song that’s music to the ears of Orange County communications chip and gear makers. It begins with the word “stabilized.”
“We see things have stabilized and are a lot better than in the months from February to July, where they were falling very significantly around the world and in Asia,”‘ Gary Jackson, Cisco’s vice president for Asia, told Reuters in a recent interview.
That’s welcome news to local broadband gear boys Conexant Systems Inc. and Broadcom Corp., which make chips that go into the routers and switches that direct data around the Internet. Both chipmakers have suffered this year as spending from Cisco, 3Com Corp. and Nortel Networks Inc. dropped off a cliff.
Recent comments from Cisco and other networking gear makers seem to indicate that excess inventories are dwindling and an uptick in sales could be taking hold.
“We hope the year 2002 will show the kind of improvements that the (gross domestic product) growth predictors are suggesting,that it will be marginally better than 2001,” Jackson told Reuters. “But we are all just going to have to wait and see.”
3Com also offered some encouragement earlier this month. The company reported a loss of $47.1 million, or 14 cents a share, for the three months ended Nov. 30. Analysts had expected a loss of 22 cents a share. Revenue for the quarter notched up to $394 million, up from $390 million in the previous quarter.
OC stands to benefit from any improvement in networking spending. With several networking startups,such as Lake Forest-based VSK Photonics Inc. and Irvine-based Morpho Technologies Inc.,having launched their business in 2001, they could gain steam with an industry pickup next year.
Happy New Year, OC.
Wonderware Expands
Industrial design software maker Wonderware Corp., part of Britain’s Invensys PLC, plans to take another 10,000 square feet at the Allred Corporate Center in Lake Forest.
The expansion increases Wonderware’s total in Lake Forest to 116,000 square feet in three buildings under way in the first phase of the Allred center. Wonderware plans to move its North American headquarters from the Irvine Spectrum to the new office park in February.
In 1998, Invensys acquired Wonderware in a deal valued at nearly $375 million. Wonderware ranked No. 5 on this year’s Business Journal list of OC software companies, with $156.2 million in revenue for the 12 months ended March 30.
“The project has been unusually compressed to accommodate the need to move quickly, especially in light of the expansion,” said Meg Farrell, director of real estate for Wonderware. “We are all working extremely hard to meet the many deadlines associated with a fast-track project such as this, and have received enormous support from everyone involved to make this happen successfully.”
The company employs about 324 in OC, with about 800 employees companywide. In 1999, Invensys acquired Newton, Mass.-based Marcam Solutions and Canada’s Avantis and folded those companies into Wonderware. Invensys also owns Brea-based Simulation Sciences Inc. and Irvine-based Triconex Corp., which are separately run.
VitalStream Deal
Irvine-based VitalStream Inc. signed a letter of intent to acquire Salt Lake City-based Sensar Corp. in what appears to be a reverse public offering. Sensar is a holding company that trades on the low-profile over-the-counter exchange. Through September, Sensar counted $85,000 in sales.
VitalStream helps companies stream content over the Internet. The deal is expected to close in a month. The new company is set to be based in Irvine.
Under the deal, VitalStream plans to continue developing its own business. The merger will provide the necessary capital to fund operations, according to the company. Sales and marketing efforts will be expanded to help attract more customers and increase brand awareness, VitalStream said.
“From VitalStream’s perspective, a merger with Sensar will immediately enable us to accelerate the growth already being achieved in our business and will allow us to embark on an acquisition strategy building on our existing business model,” VitalStream Chief Executive Paul Summers said.
