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Technology Stocks : Nortel Networks (NT)

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To: telecomguy who wrote (3723)	11/9/1999 10:28:00 PM
From: The Phoenix	Read Replies (1) of 14638

I'm sorry if I made Nortel's attempt on Open IP to be some sort of Voodoo. I think the press has it right... that this is a last gasp effort by Nortel to stave off the Cisco machine...nothing more. as for the rest of your post - you lost me. The issue of Open IP is to commoditize the network - that part of the network that resides in the routers - edge and core... not the desktop. The goal is to drive prices down on these products by using off-the-shelf technology and in doing so erroding Cisco's revenues and or market share. The result will be that Cisco has less money to spend on acquisitions to attack new market such as voice and optics and that they'll have to spend more time differentiating their products. The Open IP seeks to commoditize routing by making available to developers to build routers with. The hope is that with off-the-shelf platforms and Nortel routing code that the market will be flooded with low cost competitive routers build on Intel IXP based platforms. It's my position that this model won't work because: - technology is evolving to quick in networking for Open IP to keep up with innovation - off the shelf platforms multipupose platforms have a poor perception of reliability - pricing is not sensitive since one box is needed for an office - it's not like a desktop..it's far different. - the network IS the business - businesses must be able to rely on their connection to the business world. - the pricing benefit's are nominal. The risk are not worth the reward. - Technology such as Qos, ASP, VPN, etc. developed for the infrastructure must interoperate with the edge.. Open IP will need to be flexible and easily and quickly upgradable... Cisco and othe infrastructure players can easily change the rules - Nortel has no history of developer support. Microsoft has 1000's of people devoted just to developer support. Nortel has no desire to do that.. the goal is to cut Cisco's legs out... nothing more. I don't think Nortel will devote 1000 employee's to that cause... unless of course they were very sure that the strategy will work. All in all I think this is an excellent marketing effort by Nortel and the best shot they have a stalling the market... nothing more. OG

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