Packet Reaches Deal With Nec Agreement Enables Nec To Incorporate Packet’s Technology In Its Products

The world’s leading manufacturer of designer microchips has purchased the right to incorporate Packet Engines technology into its products.

Through the licensing agreement, NEC Electronics Inc. will be able to build a Packet Enginesdesigned media access controller into the custom-designed microchips it produces for its customers.

“They’ve entered into this agreement so their customers can build equipment that can interact with ours,” said Bernard Daines, Packet Engines founder and president. “NEC is a very large company, and this is a very significant deal for us.”

Daines said the agreement is important for its cash value, although he would not divulge specific figures. But as important, he said, is the deal’s endorsement of Packet Engines, and the viability of its ground-breaking technology.

It means that NEC believes Packet Engines will be a significant player in the emerging high-speed computer network industry.

Packet Engines, founded in late 1994, is a leader in producing equipment and intellectual property to allow computer networks to exchange information among personal computers at speeds 10 times faster than the current industry standard.

The company is in intense competition with 20 or more other companies worldwide to perfect the technologies and capture the market for the equipment that will allow networks to make the jump from moving information at 100 megabits per second to 1,000 megabits - or one gigabit - per second. The name of the format on which this technology works is ethernet.

Packet Engines has grown from three employees two years ago to more than 110, and a monthly payroll now in excess of $600,000. Packet will have 150 employees by year end. But if it is successful in winning the race for a market Daines believes will be in the billions of dollars in only a few years, Packet Engines will grow much larger.

Daines has been a pioneer in the development of the 1,000-megabit concept, and in developing the standards that will eventually rule the industry.

NEC, Daines said, wants to be sure that the equipment it provides to its customers will be interoperable with the equipment designs that eventually prevail in taking computer networking to its next level.

Packet Engines’ media access controller (MAC) will allow networking equipment that operates at the old standard of 10 megabits per second, or the current 100 megabits per second, to interface with gigabit equipment.

NEC’s customers ask it to produce microchips that will allow computers and other equipment to accomplish specific, unique tasks.

Now, incorporated into those designer chips will be the Packet Engines-designed MAC.

Daines describes the MAC as “a hunk of logic” that understands the protocols under which gigabit ethernet technology works.

Daines uses telephones as an analogy. Telephones, he said, are relatively complex pieces of equipment. But to use the phone, you don’t have to understand how it works.

The licensing agreement is with NEC’s semiconductor group, which has operations in Santa Clara, Calif., and Japan.

Daines spent the past week in Japan, meeting with prospective customers for Packet products.

“We were received with a great deal of interest and enthusiasm,” Daines said. “Japan is going to be a very big market for us.”

, DataTimes