Based near one of NASA's space centers, an old player in the telco equipment space is expanding is product line to provide small business and enterprise networking equipment.

by Alex Goldman ISP-Planet Managing Editor [April 30, 2004]

When you think of Huntsville, Alabama, you might not think "high tech." Maybe you haven't heard of NASA's Marshall Space Flight Center (whose museum is worth a visit and is friendly to teenagers). And you might not have heard of ADTRAN.

The company is earning many accolades, especially right now, during earnings season. In the DSL Prime News Briefs published yesterday on this website, Dave Burstein said of ADTRAN, "A pleasure to report positive results of real profits and sales, not 'operating,' 'EBITDA,' or 'adjusted.' ADTRAN sales increased 32 percent to $114 million in Q1, compared to $86 million in Q1 2003. Net income increased 94 percent to $20 million. A significant portion of the increase is small DSLAMs being deployed by the Bells, a market that has been exploding."

The point we're making here is that it's no accident that one of the tech sector's most profitable equipment makers is based in Huntsville, and we're also pointing out that although we'll be covering ADTRAN routers in this article, the company also makes a great deal of upstream equipment too (ISDN, T-1, and more, in addition to the DSLAMs Burstein mentions).

ADTRAN's router and switch strategy is to provide cheaper products with a "familiar interface" to companies that are very cost sensitive. "So your 'familiar' OS is selling well," we say. We are immediately corrected. The OS may look like Cisco's but the back end is a pure ADTRAN product.

Explains Joe McCalin, product manager of ADTRAN's Enterprise Networks Division, "we have the benefit that others went before us. We learned from their mistakes. As a result, we believe that our products are best in class."

And they have a Web GUI in addition to the Cisco-like CLI interface.

When they add that the company does not charge an annual fee, and offers a five year warranty on all products sold in North America, we blurt out, "that's impossible!"

"At ADTRAN, we have a saying: 'it's not impossible; it's ADTRAN," says Danny Windham, the general manager of the Enterprise Networks Division, and a company vice president.

Keeping cost down is all about the details, Windham explains. "We have 18 years of product development experience and a culture of cost efficiency. Other companies might focus on getting to the market fast."

For example, the company designs its own built in power supply whereas Cisco buys an off-the-shelf power system for Taiwan. Windham says ADTRAN saves $4 or $5 per unit, and the products fit it all on one PCB, while Cisco units require two or more.

Design efficiency has meant a certain amount of fewer features, but ADTRAN's adding the features back. In a blitz of press releases in the past few weeks, the company announced several upgrades and new products.

On May 30, 2004, it said that traffic shaping features in the latest release of its OS, such as priority queuing and frame relay fragmentation, will better enable the company's products to prioritize VoIP packets. The company calls this feature "VoIP ready."

On April 13, 2004, it announced the NetVanta 1224R ($1,195—"R" is for "router") and 1224STR ($1,295—"ST" is for the 1000Base-T/SFP port on this router) products, which incorporate the new OS, and provide an all-in-one solution for branch offices, with IP router, VPN, firewall, managed Ethernet switch, and WAN interface. An optional ($495) security package adds support for IKE, XAUTH, RSA SecurID, and X.509 Digital Cirtificates. The VPN also costs extra

The company compares its ADTRAN NetVanta 1224 STR, costing $1,595 plus $695 for VPN with a Cisco 2950T switch ($1,295), Cisco 1721 router ($1,195), a T1 WIC card ($1,000), and VPN and firewall ($2,400) for a total price difference of $2,290 (ADTRAN) versus $5,890 (Cisco)—and that's before factoring in ADTRAN's free phone support and firmware upgrades as compared with Cisco's, which are not free.

The product complements the standalone NetVanta 2000 firewalls, described in a previous article, ADTRAN Dares You to Compare. The company announced a new model, the NetVanta 2050, on March 17, 2004. The product enters the ultra-low cost end of the product line, selling for $345 as firewall only or $395 with both firewall and VPN. It is intended for the SOHO environment.

The company's NetVanta 3000 is a gateway to a variety of environments, from POTS to optical to various flavors of IP (so some deployments could use the 3000 to handle the upstream and a 2000 series product to deliver the Ethernet to, say, 24 corporate users), and the NetVanta 5000 series offers serious throughput for the corporate head office.

The point the company wants to make to anyone designing or installing corporate WANs and LANs is simply this: dare to compare. A company that merely asks that you test drive its product, like ADTRAN, seems to be very confident that you'll like what you find.

—End