Sorry Boys no Nortel Takeover - Read the following and pay close attention to paragraph six.
Nortel Discloses Terabit Router Plans
DENVER — A top executive at Nortel Networks Corp. (NYSE/TSE: NT) moved to squash rumors that the optical networking giant is set to buy a terabit router vendor, as he released fresh intelligence about Nortel’s own in-house router development program, at the NFOEC show in Denver this week.
In an interview with Light Reading, Don Smith, president of Nortel's optical Internet division, denied that his company needs to buy a router vendor in order to plug the IP routing hole in its current product line. “We’ve been dealing with data for a hell of a long time,” he said.
Smith went on to talk about Nortel’s own terabit router, currently under development, called the Optera Packet Core. Nortel announced that it was working on the product last September, but details were scanty. Smith filled in some of the blanks, saying that the Optera router has actually been in development for four years, and that Nortel has filed 45 patents related to the product. He also claimed that Nortel has successfully tested the device’s ASICs, and that it has lined up the first customers for the product -- although he declined to name names. The product is set to ship in the first half of 2001.
Smith went on to reveal what may be the product’s most significant differentiator: the ability to support distributed routing, whereby multiple routers located in different racks in an equipment room, or even different geographical locations, act as a single routing device. Such “virtual routing” technology has the potential to deliver big performance increases, while at the same time reducing service provider operating costs.
Other terabit router companies, most particularly Pluris Inc., are working on the same capability (see Pluris Is Back ). But Smith claims Nortel is ahead of the game: “Show me someone who can actually do this; [our competitors] don’t have the ASICs, the software, the patents." The Optera Packet Core product comprises hardware and software developed by Nortel engineers, as well as some software that has been “re-vectored” from the Versalar product, Smith added.
The revelations cast a new light on the nature of Nortel’s reseller agreement with terabit router vendor Juniper Networks Inc. (Nasdaq: JNPR) (see Juniper-Nortel "Alliance" Gives Pause ). There has been speculation that the reseller deal might be a precursor to a mondo acquisition of Juniper by Nortel. Smith’s comments suggest that it’s simply a stopgap until its own product is ready to ship.
Nortel desperately needs to hit a router home run. The Versalar products it acquired when it bought Bay Networks have sunk like a big, heavy stone -- and its lack of carrier-class IP routing technology represents the single weakest link in its product portfolio.
-- Stephen Saunders, US editor, Light Reading lightreading.com
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