Bay Networks Solidifies Position as Market Leader in Network Management; IDC Report Declares Optivity Number One in Several Categories.

SANTA CLARA, Calif.--(BUSINESS WIRE)--July 16, 1997--A recently released International Data Corporation (IDC) report (Network Management Software Outlook - Managing Data Overload, No. 13496, June 1997) indicates that Bay Networks, Inc. (NYSE:BAY) is the leading vendor in device management for both low-end and high-end element management software solutions. Network management is a key cornerstone technology of Bay Network's Adaptive Networking strategy to provide IP optimized networks that deliver high-level services while reducing complexity.

The IDC report examines market share in several categories including: low-end and high-end element management software and embedded and stand-alone RMON probe market share. Bay Networks is the leader in both element management software categories and the embedded RMON probe category. The company also doubled its standalone RMON probe market share.

"We are particularly pleased with the results of the IDC study because it indicates that the company's efforts to deliver best-of-breed products continue to be recognized by our customers," said Tim Riley, director of network management product marketing for Bay Networks. "Bay has reaffirmed its commitment to network management by naming it a cornerstone technology and will continue to develop leading-edge products in this area."

According to the 1997 IDC Network Management End User Survey, Bay Networks' Optivity(R) is the most regularly used network management application of its kind with the largest installed base. Current sales of Optivity network management applications place Bay Networks in the number one position for revenue in the low-end and high-end element management software categories with a market share of 32% and 32.4% respectively. Bay Networks also leads in embedded RMON probes with 38.5% market share based on vendor shipments. In the category of stand-alone RMON probes, Bay nearly doubled its market share, the largest improvement of any vendor in 1996.

"The user survey data shows that a significant number of end-users are using Bay Networks' Optivity product suite to manage their networks," said Elisabeth Rainge, senior analyst at IDC. "This is the second year that Bay has lead in network element management software market share."

About Optivity

Bay Networks' Optivity product family provides the industry's leading solution for management of network devices, systems and traffic. The applications provide visibility to the changing nature of the physical network as well as the dynamic usage patterns and the applications transiting these networks.

As networks evolve, the value of the network manager's investment in this infrastructure continues to increase as additional applications are deployed for delivering strategic business information for sizing pipes, accounting for usage, service level agreements, security and beyond. This solution provides the tools necessary to proactively deliver the network services and quality that users expect.

About Bay Networks, Inc.

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, Calif., 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. -0-

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.

Note to Editors: Bay Networks and Optivity are registered trademarks and BayStack is a trademark of Bay Networks, Inc. Other brand and product names are registered trademarks or trademarks of their respective holders.

CONTACT: Bay Networks, Inc.

Dawn Slusher, 408/495-2864

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