March 13, 1999 Web posted at: 11:46 a.m. EST (1646 GMT) by Fred McClimans, Network World columnist

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INTERACTIVE: Should U.S. high-tech companies receive more or less federal protection from being acquired by non-U.S. competitors? More Less View Results

(IDG) -- Something unusual happened last week. No, not the Monica interview - that wasn't unusual, it was odd.

Rather, we saw the makings of a full-fledged invasion from the shores across the Atlantic. In two swift moves, which happened so closely together they almost appeared to be a single event, France's Alcatel acquired both Xylan and Assured Access Technology in its quest to both expand its technology base and find a way to break into the lucrative U.S. market.

But it would be wrong to call this a technology invasion - after all, the technology isn't flowing to our shores, but away. Perhaps it should be called a cash invasion, since cash (or stock convertible to cash) is what the U.S. market is getting in exchange for technology.

Unlike Finland's Nokia, which started this recent invasion last year with the acquisition of Ipsilon, Alcatel has purchased both technology and brand-name assets in the U.S. in the form of switch manufacturer Xylan. For a mere $2 billion in cash and stock, Alcatel now has the right to place the Alcatel name right along-side Xylan (a firm fairly well known in the U.S. for both very good technology and a very volatile stock).

In fact, Xylan's name is perhaps just as valuable as its technology. Even though it's a huge enterprise (it is one of Cisco's largest resellers anywhere, for example), Alcatel is virtually unknown here outside the legacy telecom-equipment market (it began to gain a bit of name recognition last year when it snapped up Gigabit pioneer Packet Engines).

Meanwhile, German telecom biggie Siemens looks like it will use the same technique for breaking into the U.S. market. Just this week, it announced the acquisition of Argon Networks and Castle Networks to bolster its new "converged networks" team - Unisphere Solutions. It's also announced an investment in Accelerated Networks.

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And let's not forget 3Com. While Siemens has had a relationship with 3Com for some time now, they have been rumored within the past few days to be very close to a deal to acquire all or part of 3Com. If these rumors aren't true, they should be: Siemens, Alcatel and every other big international player looking to break into the U.S. market should be sniffing around every stable U.S. firm they can find.

Why the rush now to acquire U.S. mindshare? The U.S. market is still considered the flagship for networking technology. If you want to dominate the rest of the world, sooner or later you'll have to be a player in the U.S.

Equally important, the U.S. market is about the only stable market right now anywhere in the world. Asia is still in turmoil. South America is facing a very tough year ahead. And Europe is still feeling the impact of the global slowdown. Right now the smart money is flying as fast as it can to the U.S. shores. This stability will become critical as we approach the Y2K issue later this year. Put this all together, and the U.S. looks to be a hotly contested market over the next couple of years.

So Alcatel and Siemens (and even Nokia) won't be alone - expect more European takeover attempts on this side of the Atlantic. And that raises some interesting questions for Cisco. How will it keep its Alcatel-fed accounts internationally, now that Alcatel owns Xylan, for example? My hunch is that Cisco will have to fight very hard to keep account control from slipping to Alcatel - especially in those European sectors where service and support take a second seat to technology and U.S. market share.

If nothing else, it is refreshing to see how the dynamics of the U.S. vs. the Rest Of the World will play out, in everything from technology to policy. Last year, we saw the Europeans alter the shape of the MCI-WorldCom deal. This is a war that has a long way to go.

But don't let any of this affect your purchase plans. After all, the line between U.S. technology and U.S.-owned technology is already blurred beyond belief. Just ask all those employees of Bay Networks - now owned by Canada's Nortel.

Fred McClimans is CEO of Current Analysis, Inc., a competitive intelligence and analysis firm.