70-81 Tigris

In 1998, Ericsson acquired ACC as part of its plan to reshape the company to meet the communication challenges of the next millennium. ACC has had a long history in the early pioneering development of the Arpanet—the prolog to the Internet. Santa Barbara (ACC’s headquarters) was the site of one of the first of four nodes to be knitted together, in 1969, to provide the world’s first packet-switched network. From this foundation, a team of engineers formed ACC and set about developing products to meet the growing requirements of the university and defense industry during the late 1970s and early 1980s. ACC has had many networking firsts, such as advanced techniques for minimizing wide-area bandwidth costs and the introduction of a branch office router for under USD 2,000. During the past two years, ACC has reshaped itself in preparation for what it saw as confirmation that the Internet protocol (IP) would become the nextgeneration network protocol. This new direction focused on the delivery of a new technology platform that allows smooth and cost-effective migration from the traditional narrowband world of carriers into the world of IP. Ericsson realized that the acquisition of ACC would bolster its presence in the IP world and provide a production-ready, carrier-class product family that would help transition its customers into the new telecoms world. Moreover, the acquisition was part of Ericsson’s string-of-pearls strategy, which is designed to catapult Ericsson into the IP world. This strategy includes the formation of a US-based Data Networking and IP business unit, which brings together Ericsson’s breadth of data networking products and skills; gives a foundation for existing and new partnerships in the nascent IP world; and gives Ericsson the ability to build or acquire IP excellence across a range of technology solutions. In doing so, Ericsson positions itself • to migrate existing wireline and wireless customers toward IP communications; and • to build complete end-to-end network solutions based on the Internet protocol. Ericsson’s string-of-pearls strategy is considered to be more innovative than similar strategies to bolster IP competence in telecommunications companies. It provides for selective acquisitions that target key product areas, such as access, service, infrastructure and management. This strategy enables Ericsson to build a best-of-breed stable of products which in themselves are superior to competitive products and which as a whole offer an impressive solution for endto-end connectivity. The ACC acquisition supports this best-of-breed strategy—the Tigris family of products was awarded the “Oscar” of the data communication industry, namely the 1998 Hot Product of the Year award. ACC’s IP capabilities and its focus on the rapidly growing access market complement Ericsson’s aggressive foray into data communications and IP.