One-stop LAN/WAN
shop
Nortel's multibillion-dollar purchase of Bay
Networks will bring voice and data under one
roof
By Brian Riggs
orthern Telecommunications Ltd. staked a
claim to new territory in the enterprise IP
networking space last month when the company
announced its plans to acquire Bay Networks Inc.
The $9 billion deal promises to thrust Canada's
century-old provider of telecom equipment into
more direct competition with the likes of Cisco
Systems and other enterprise vendors.
The goal is to offer an end-to-end line of voice and
data equipment that combines voice, video, and data
on LANs and WANs running IP, ATM, and frame
relay.
Customers say they look forward to such a
one-stop shop, but analysts warn that Nortel has yet
to prove itself as an IP networking vendor. "On the
data side, they are still neophytes," said Craig
Johnson, principal at The PITA Group, a
consultancy in Portland, Ore.
Convergence
Corporate network managers say they are looking
for end-to-end equipment that will let them carry
both voice and data across a single enterprise
network.
"From a convergence standpoint, this [merger] looks
pretty good to us," said Jim Bollinger, assistant
director of computing at Virginia Military Institute in
Lexington.
Bollinger uses Nortel switches for voice traffic and is
building a fast Ethernet-based campus based on Bay
Networks Accelar switches.
"We'll eventually see our phone traffic move off of
our cross-campus copper and ride on the data
backbone," he said, adding that he hopes a
combined Nortel/Bay Networks will provide him
with a straightforward way to combine voice and
data traffic over both LANs and WANs.
Nortel also hangs its hopes on such an end-to-end
line of converged voice and data products.
"Nortel's expertise has been in the public wide-area
networking space, whether it is from the carriers
themselves or on the edge of the [enterprise]
network," said John Roth, president and CEO of
Nortel in Toronto. "But we have never been in the
LAN business per se."
Analysts note that Nortel already dominates the
enterprise ATM and frame relay switch market,
although the majority of its equipment is purchased
by companies outside the United States.
Nortel has been gradually adding IP to its
development efforts. Two years ago it acquired
Micom Communications Corp., a developer of
voice-over-IP and voice-over-frame-relay access
equipment in Simi Valley, Calif. More recently,
Nortel bought a 20 percent stake in terabit-speed
router startup Avici Systems Inc. in Chelmsford,
Mass. and purchased another Chelmsford startup,
Aptis Communications Inc., which develops
multiservice access switches.
Despite the company's investments in IP vendors,
the Nortel division that oversees development of its
ATM backbone switches has stridently promoted
ATM as the only way to carry IP and multiprotocol
traffic across the WAN, said John Coons, director
and principal analyst at Dataquest Inc., a market
research company in San Jose.
Roth dismissed this apparent schizophrenia as
healthy technology agnosticism. "We have tried to
avoid becoming religious" about specific
technologies such as ATM or IP, he said. "I'd rather
give my customers a choice than have them find that
we did not have a solution that they thought was
critical."
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