Bay Networks Announces IP Services Strategy; New Router Software and Technology Agreement Support Industry's First Open Architecture to Enable the Innovation of IP-based Business Applications.

PARIS--(BUSINESS WIRE)--Oct. 21, 1997--Bay Networks Inc. (NYSE:BAY) today unveils its IP Services strategy, a cornerstone of Adaptive Networking. IP Services is a new category of products and technologies that move beyond IP as a protocol and enable network managers to optimize business applications in an integrated and standards-based manner. Supporting the IP Services strategy that leverages leading IP technology, the company is also announcing Bay Networks Routing Services (BayRS) version 12.0 and VPN Series 500 product line.

Focusing on three areas of current and future technology services and solutions, Bay Networks' IP Services will encompass Applications Services, Enabling Services and Interworking Services.

-- Applications Services, such as mission-critical business applications, multimedia, voice/fax over IP;

-- Enabling Services, including Directory/Policy Services, Progressive Traffic Management, Security and VPNs;

-- Interworking Services, including PC LAN, IBM SNA and IP encapsulation capabilities to facilitate a smooth migration to an IP-optimized network while protecting previous equipment investments.

Enabling Services is being fully introduced today as the company's entry point into IP Services.

"Today's IP Services strategy announcement details products and technology interfaces which allow IS managers to design their networks in an open, architected and scalable environment," said Dave House, chairman, CEO and president, Bay Networks. "By implementing the Bay Networks IP Services solutions, enterprise and service provider network managers are able to ensure adequate and predictable performance of mission critical applications by allowing networks to dynamically adapt to changing user or application requirements."

Enabling Services

At the heart of IP Services, Enabling Services provide the means for current and future Application Services to perform with security, reliability and efficiency in the IP environment. Customers are able to provide services such as Directory/Policy, Progressive Traffic Management, VPNs and security.

-- Directory/Policy Services enable the dynamic control of network resources allocation to users groups and applications based on administrator-defined rules of usage. The Bay Area Networks NetID solution is a multi-administrator platform for the management of IP addressing, Domain Name Service (DNS) and Dynamic Host Configuration Protocol (DHCP). Through the standards-based Lightweight Directory Access Protocol (LDAP) interface, the NetID solution will interwork with existing directory services to associate network specific information to users, groups and applications.

-- Progressive Traffic Management (PTM) enables dynamic control of network traffic and bandwidth allocation. PTM capabilities are provided in Bay Networks' router software technologies, including software tools for level-of-service (LoS), quality-of-service (QoS) and policy management applications. Bay Networks also announced today version 12.0 of BayRS router software that delivers new levels of IP traffic control and performance with QoS, LoS and multicast routing capabilities (see below).

-- VPNs enable customers to exploit the cost efficiencies and global connectivity of shared networks, and extends the corporate LAN to remote offices and business partners. The Bay Networks solution provides greater flexibility in implementing a choice of VPN solutions, while protecting existing network investments. The solution currently includes BayStream Dial VPN Services (BayDVS) -- a comprehensive service solution that provides a secure dial-up or ISDN connection for access to VPNs and/or the Internet. BayDVS supports both Mobile IP and planned support for Layer 2 Tunneling Protocol (L2TP). To augment Bay Networks' VPN solution, the company today announced a partnership with VPNet Technologies, Inc. and the delivery of the BaySecure VPN 500 Series product family of solutions (see below).

-- Security enables the protection and control of corporate information. Bay Networks' BaySecure security technologies provide extensive authentication and authorization capabilities, such as support for FireWall-1 and RADIUS.

"Through Adaptive Networking's IP Services, Bay Networks will provide the level of reliability, predictable performance and security that CIOs and network managers require to run mission-critical business applications over IP networks," said Bill Hawe, vice president of architecture, Bay Networks.

Building on a strong existing base of products that support IP Services, Bay Networks is committed to developing future products and enhancements that improve performance on IP. The company will continue to aggressively roll out products that provide integrated, architected , open and scalable services to enable business applications/activities on IP.

Introducing Bay Networks Routing Services (BayRS) Version 12.0

Also announced today is a new suite of advanced router capabilities that will enable the building of present and next generation mission-critical IP networks for both enterprises and service providers. These new router enhancements, with widespread standards support, are available today with Bay Networks Routing Services (BayRS) version 12.0 product. New features address customer concerns with IP Address Management and Network Unification, Network Bandwidth Prioritization. and Mass Data Distribution.

"Bay's commitment to support the ubiquitous deployment of advanced IP services is clearly evident by the numerous advanced IP features of BayRS Version 12.0 including next generation IPv6, quality of service, and multicast tools," said Steve Pearse, executive vice president, Internet/Telecom Business Group, Bay Networks. "Bay Networks continues to provide leadership in driving standards, and as a member of the IETF IP Next Generation Working Group, we are committed to being one of the first major internetworking vendors to provide a compliant implementation of the new IPv6 standard, while ensuring a smooth transition to IPv6 by allowing applications that use IPv6, IPv4, or IPv4 tunnels."

Introducing BaySecure VPN Series 500 Product Line

In support of the IP Services strategy, the company also announced today the BaySecure VPN Series 500 product family -- a new, comprehensive solution for deploying and managing secure, high-performance virtual private networks (VPNs). Featuring WAN/LAN security devices, remote access client software, and comprehensive management, the BaySecure VPN Series 500 product family enables industry-standard network security services that are key to transitioning today's networks to the IP-optimized networks of tomorrow.

"Increased usage of the Internet, corporate intranets and extranets, telecommuting and client/server applications are creating unpredictable traffic patterns which add tremendous stress to today's fixed, inflexible WAN infrastructures," said Kelly McGovern, vice president of Internet/telecom marketing at Bay Networks. "With the introduction of the VPN Series 500, we're alleviating this problem with a flexible, cost-effective VPN solution that leverages global, ubiquitous public networks for site-to-site communications at performance and security levels comparable to dedicated WAN facilities. This further strengthens our position with a VPN product suite that enables service providers to offer value-added VPN services and enterprise customers to extend corporate intranets, extranets and remote access services over IP-based VPNs."

Through a technology agreement with VPNet Technologies, Inc., San Jose, Calif., Bay Networks' VPN Series 500 product family offers a comprehensive and cost-effective solution for implementing secure, high-performance VPNs both domestic and international.

"As organizations continue to support an expanding number of remote users accessing centralized, IP-based corporate resources, VPNs are quickly becoming a viable solution for delivering low-cost remote access," said R. Michael Allen, co-founder and CEO of VPNet Technologies. "Through the VPN Series 500 family, based on VPNet technology, Bay Networks will help customers realize the benefits of using public infrastructures, such as the Internet, for providing secure communications to authorized branch offices, remote sites, and even other business partners on an as-needed, ad-hoc basis, while safeguarding confidential corporate data."

Pricing and Availability

Bay Networks BayRS version 12.0 software is available today. Bay Networks' VPN Series 500 product family is scheduled for availability in November 1997. List pricing for the VPN 500 and VPN 550 products starts at $3,995 and $4,995 respectively. The VPN Secure Client is list priced at $99, and the VPN Secure Manager is list priced at $3,995 (International versions with 56-bit DES are also available for use outside the U.S. and Canada.)

About Bay Networks

Bay Networks, Inc. (NYSE:BAY) is a leader in the worldwide networking market, providing a complete line of products that serve corporate enterprises, service providers and telecommunications carriers. The company offers frame and ATM switches, routers, shared media, remote and Internet access solutions, IP services and network management applications, all integrated by Bay Networks' Adaptive Networking strategy. With headquarters in Santa Clara, California, Bay Networks markets its products and services around the world, providing 7x24 support coverage. For additional information visit the company's World Wide Web site at http://www.baynetworks.com or call 800-8-BAYNET.

This release, other than historical financial information, may consist of forward-looking statements that involve risks and uncertainties. These statements may differ materially from actual future events or results. For instance, factors which could cause results to differ from future events include the rate of adoption of new technology, competitive pricing actions and marketing programs, among others. Readers are referred to the documents filed by Bay Networks with the S.E.C., specifically the most recent reports on forms 10-K and 10-Q, which identify important risk factors which could cause actual results to differ from those contained in the forward-looking statements. -0-

Note to Editors: Bay Networks is a registered trademark and NetID, BayStream and BaySecure are trademarks of Bay Networks, Inc. Other brand and product names are registered trademarks or trademarks of their respective holders. There will be an addendum to this release to follow shortly.

CONTACT: Bay Networks, Inc.

Matthew Burke, 408/916-1320

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FitzGerald Communications, Inc.

Laura Fischman, 617/494-9500 ext. 226

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