Bay Microsystems and N.E.T. Partner to Deliver Secure High Speed Multiservice Platform; Joint Development of 10G to 40G Broadband Solution Addresses Emerging Requirements for Government and Commercial Networks.

SAN JOSE, Calif. & FREMONT, Calif. -- Bay Microsystems and Network Equipment Technologies, Inc. (NYSE:NWK) announced today that they will jointly develop a new high speed, multiservice platform to switch and aggregate data at full line rates of 10 gigabits per second and higher. The new platform is designed to address the Federal government's growing need for secure, high performance networks and grid computing applications. Trials are set to begin shortly with key Federal customers.

The new platform will incorporate a compact design with high capacity switching and aggregation capabilities to provide interworking of high speed technologies, including Ethernet, SONET/SDH, Fibre Channel and Infiniband, providing a powerful solution for secure, mission-critical networks such as the Global Information Grid, or GIG. The product will be delivered in a two rack-unit scalable chassis.

Both companies are long-term suppliers to the Federal government. The jointly-produced platform combines Bay Microsystems' industry-leading programmable packet processing solutions with N.E.T.'s expertise in delivering secure communications platforms. Additionally, Bay brings to the partnership its new 40 gigabit technology in support of the Federal government's GIG roadmap.

"Bay has been enabling the Federal government to deploy robust broadband network solutions for a number of years. This partnership will substantially increase our reach and scale within our existing markets and open new opportunities for our products within commercial markets as well," said Chuck Gershman, president and CEO of Bay Microsystems. "N.E.T. has more than a twenty-year track record for first-to-market innovation, including integrating VoIP and other IP capabilities into existing networks. With their significant installed base of private, international and government networks, there are many opportunities for us to collaborate and add value for our mutual customers. Together, we will deliver the end-to-end quality of service, features and robust network user experiences that our customers demand."

"This is an important strategic step for the company, putting us squarely in the broadband business and extending the range and performance of networks that we deliver and service," commented C. Nicholas Keating, president and CEO of N.E.T. "Our intent is to bring new products to market more rapidly with trusted, capable partners. This development enables us to provide a more effective migration path for Promina networks and support for high speed security solutions for our long-term Federal customers. It also puts us in a leading position to deliver storage area networking (SAN) extension and grid computing interworking solutions for government and commercial markets where secure, low latency, high-speed access to data is a requirement."

"The multiservice and Ethernet platform markets are large and expanding rapidly," said Scott Clavenna, chief analyst at Heavy Reading. "This partnership between Bay and N.E.T. looks promising, leveraging both companies' government market penetration and providing commercial upside as well. The platform feature list uniquely addresses current market requirements for high speed ports and scalable, multi-protocol interworking with hard QoS in a small form factor."

The platform is scheduled to be generally available in calendar year 2006.

About Bay Microsystems

Bay Microsystems is a privately held communications technology company delivering programmable packet processors, software and network elements for the world's most demanding broadband networks. Bay's award winning Internetworking Processor(TM) products are scalable, intelligent, protocol-agile and ultra-high performance, and are used in U.S. Government and commercial networks to provide robust end-user experiences.

For more information please visit www.baymicrosystems.com.

About Network Equipment Technologies, Inc.

Network Equipment Technologies, Inc. is a leading provider of networking equipment that enables its customers to adapt to a broadband future. An architect of the networking industry, N.E.T. has been supplying service providers, governments and enterprises around the world with bulletproof networking technology for more than 20 years. Visit www.net.com - the first address in networking.

Note to editors: photo available of executives signing contract.