Cascade Communications

Cascade Communications Corporation was a telecommunications-equipment manufacturer founded in 1990 by Gururaj Deshpande and based in Westford, Massachusetts. The company developed networking equipment for telecommunications service providers, concentrating on Frame Relay and Asynchronous Transfer Mode (ATM) switching. These technologies were central to carrier data networks during the 1990s, when businesses and institutions increasingly required dependable connections between geographically separated offices and facilities. Cascade's products were designed to provide compact, carrier-oriented switching platforms rather than consumer networking devices. Its equipment supported Frame Relay services, which were widely used by businesses to establish private or managed wide-area networks, and ATM services, which carriers adopted for the transport of data and other traffic. The company's commercial importance came from supplying the infrastructure used by service providers rather than from selling a visible consumer brand. According to the company's Wikipedia account, Cascade equipment carried an estimated 70 percent of the world's Internet traffic during the mid-1990s, although the available reference does not provide a methodology or independent verification for that estimate. The company was led by chief executive Dan Smith, with Mike Champa serving as vice president of sales and Paul Blondin as chief financial officer. Its principal direct competitor was StrataCom, another important provider of carrier networking equipment. StrataCom was acquired by Cisco Systems in 1996, reinforcing the broader consolidation taking place in the communications-equipment sector as networking technologies became strategically important to major technology companies. In 1997, Ascend Communications acquired Cascade for approximately US$3.7 billion. The transaction gave Ascend a stronger position in ATM and Frame Relay, markets in which Cascade had established products and carrier relationships. Cascade therefore ceased to operate as an independent company. Ascend was subsequently acquired by Lucent Technologies in 1999 in a transaction valued at approximately US$24 billion. Lucent reportedly viewed the Cascade-related business as particularly attractive because of its relevance to carrier switching, compared with the modem-termination activities that made up much of the remainder of Ascend. Cascade's influence extended beyond its products and acquisition value. The company became one of the Massachusetts telecommunications startups associated with the region's mid-1990s expansion in networking and communications technology. Several former Cascade employees later founded or helped build other Boston-area telecommunications companies. Deshpande and Smith went on to establish Sycamore Networks, while Champa later founded Omnia Communications and subsequently became chief executive of Winphoria Networks. Cascade is consequently remembered both as a significant supplier of carrier data-network equipment and as a source of entrepreneurial and managerial talent for the region's later telecommunications industry.

Cascade Communications Corporation emerged in 1990 in Westford, Massachusetts, during the early expansion of commercial data networking. It was founded by Gururaj Deshpande and built its business around equipment for telecommunications service providers. Rather than targeting household users, Cascade supplied carrier-grade switching systems intended to support wide-area data services and the interconnection of distributed business sites. The company's principal technologies were Frame Relay and Asynchronous Transfer Mode. Frame Relay became an important managed data service during the 1990s because companies could use it to connect offices and other facilities across separate locations through provider-operated networks. ATM represented another carrier-oriented approach to high-capacity, managed traffic transport. Cascade's compact switches enabled service providers to deploy these technologies in their networks. The company’s available historical account attributes an estimated 70 percent share of the world's Internet traffic carried by Cascade equipment during the mid-1990s, but the source does not explain how that estimate was calculated. Cascade was managed by Dan Smith as chief executive officer, with Mike Champa responsible for sales and Paul Blondin serving as chief financial officer. Its rise occurred in a competitive environment that included StrataCom, a significant rival in carrier networking. The acquisition of StrataCom by Cisco Systems in 1996 demonstrated that larger technology companies were seeking established positions in communications infrastructure. This consolidation increased the strategic value of companies with proven carrier products and customer relationships. In 1997, Ascend Communications acquired Cascade for approximately US$3.7 billion. Ascend pursued the transaction to enter or strengthen its position in ATM and Frame Relay markets. The acquisition ended Cascade's independent corporate life but placed its technology and employees within a larger communications-equipment organization. Ascend itself was acquired by Lucent Technologies in 1999 for approximately US$24 billion. In the combined company, the Cascade-related operations were reportedly more attractive to Lucent than the modem-termination business that constituted much of Ascend's other activity. Cascade's significance continued through its alumni. Deshpande and Smith later founded Sycamore Networks. Champa went on to found Omnia Communications and later served as chief executive of Winphoria Networks. Other former Cascade employees also became founders or important contributors at Boston-area telecommunications companies during the late 1990s. This movement of people helped give Cascade a reputation as an important training ground for Massachusetts's telecommunications startup ecosystem. The company is therefore historically notable both for its carrier switching products and for its role in the regional technology network that followed its acquisition.

• 1999

  Lucent acquires Ascend

  [1]Cascade Communicationsen.wikipedia.org

  Lucent Technologies acquired Ascend in a transaction reported at approximately US$24 billion, succeeding Cascade's acquisition as part of the sector's consolidation.

• 1997

  Ascend acquires Cascade

  [1]Cascade Communicationsen.wikipedia.org

  Ascend Communications acquired Cascade for approximately US$3.7 billion, bringing Cascade's ATM and Frame Relay business into Ascend.

• 1996

  Cisco acquires StrataCom

  [1]Cascade Communicationsen.wikipedia.org

  Cisco Systems acquired StrataCom, Cascade's principal direct competitor in carrier networking equipment.

• 1990

  Cascade Communications is founded

  [1]Cascade Communicationsen.wikipedia.org

  Gururaj Deshpande founded Cascade Communications in Massachusetts to develop communications equipment for service providers.

A carrier-focused telecommunications-equipment manufacturer supplying compact switching systems for Frame Relay and ATM services.

• Telecommunications switching equipment

  Frame Relay switching systems

  Cascade's Frame Relay switches were compact carrier-oriented systems sold to telecommunications service providers. They supported managed wide-area data services used by businesses to connect separate offices and facilities. Frame Relay was one of the principal enterprise data-network services of the mid-1990s, giving Cascade a role in the infrastructure behind private and provider-operated corporate networks.

• Telecommunications switching equipment

  Asynchronous Transfer Mode switching systems

  Cascade's ATM switches targeted telecommunications carriers and other service providers seeking high-capacity managed networking infrastructure. ATM was a major carrier data technology during the company's operating period, and Cascade's ATM capabilities were a key reason Ascend sought the acquisition. The product line subsequently became part of the larger Ascend and Lucent communications businesses.

• 1997

  Accept acquisition by Ascend CommunicationsM&A

  Background

  Cascade operated in strategically important ATM and Frame Relay markets while communications-equipment companies were consolidating around established carrier technologies.

  Action taken

  Ascend Communications acquired Cascade Communications for approximately US$3.7 billion.

  Aftermath

  Cascade ceased to operate as an independent company, and its business became part of Ascend's communications-equipment portfolio. Ascend was later acquired by Lucent Technologies in 1999.

  Acquisition value. Approximately US$3.7 billion (1997)

  Source

1. 1Cascade Communicationsen.wikipedia.org