Nokia Strikes $120 Million Deal
To Acquire Networker Ipsilon
An INTERACTIVE JOURNAL News Roundup
Telecommunications group Nokia Oy said Tuesday it will
acquire privately held data-communications company
Ipsilon Networking Inc. for $120 million. The purchase is
subject to regulatory approval expected by the end of the year.
Nokia said Ipsilon has more than 100 employees and will
become part of Nokia Telecommunications, the
infrastructure arm of Nokia. Ipsilon's existing business
relationships will continue under the Nokia brand. Nokia, the
world's second-largest maker of mobile phones after
Motorola Inc., said it has held a minority interest in Ipsilon
since June.
Ipsilon, of Sunnyvale, Calif., develops open Internet Protocol,
or IP, routing platforms, and supplies data-network
infrastructure to ensure that Internet-based information is
correctly transferred.
"Wireless and data communications are clearly the key
drivers as telecommunications markets become more open
and increasingly global," said Matti Alahuhta, president of
Nokia's telecommunications division. "Adding Ipsilon's
highly regarded IP capabilities to Nokia's established network
expertise is an important step for us in further developing our
competitiveness in IP networks."
"We will continue supporting our existing customer base and
actively pursue new customers as part of Nokia's global team,"
said Brian Nesmith, Ipsilon's president and chief executive
officer.
Additional details on the acquisition weren't available.
Ipsilon is a tiny networking company that last year introduced
a switching technology that was seen as a threat to Cisco
Systems Inc., the biggest maker of networking equipment.
Ipsilon has said its IP-switching technology offers the
functionality of a traditional router but at about half the cost,
the company said. Routers, used to decipher and direct data
on the Internet, can cost tens of thousands of dollars and
constitute one of Cisco's great cash cows.
As the Internet has gained popularity and its TCP/IP protocol
has become the dominant platform for networks, the need for
routing's translation abilities have become less critical.
Meanwhile, the volume of corporate networks has increased,
putting a strain on routers and slowing the system. IP
switching focuses on the TCP/IP protocol.
Lucent Technologies Inc., a rival of Nokia's, in October
agreed to acquire privately held networking firm Livingston
Enterprises Inc. for $650 million worth of stock. And
Northern Telecom Ltd., another big telecom-equipment
company, has been rumored to be interested in Ascend
Communications Inc., a maker of networking gear.
Cisco has also acquired various communications-technology
concerns to better serve telecom carriers. Market watchers
say telecom carriers need more specialized equipment,
including networking technology, than ever before.
Other telecom-equipment and networking firms, including
L.M. Ericsson, Lucent, Northern Telecom, 3Com Corp.
Siemens AG, Newbridge Networks Corp. and others, have
invested in Juniper Networks Inc., a Silicon Valley start-up
that has ambitious plans to develop key components for
high-speed networking devices in a bid to challenge Cisco. |
