Doesn/t this help Cisco? - Migration of phone network away from PBX to LAN
Ken
stocksite.com
''It will, over time, enable the migration of your phone network away from your PBX (private branch exchange) to your
local area network,'' said analyst Robert MacLellan at CT Securities in Toronto.
Nortel To Announce Pact With Heavyweights
By Sarah Edmonds 13:42 03-15-99
TORONTO (Reuters) - Canadian telecoms equipment company Nortel Networks was set to unveil a four-way networking gear
tie-up with computer heavyweights Microsoft Corp., Intel Corp. and
Hewlett-Packard Co. later Monday.
Although Nortel would not give specific details, analysts said the pact will involve Nortel and Hewlett-Packard developing technology using Intel and Microsoft hardware and software to move voice, video and data traffic over corporate computer
networks.
The new networking system is expected to lead ultimately to lower voice transmission costs for business customers.
Nortel Chief Executive John Roth was scheduled take the stage at a news conference at 2 p.m. EST in San Jose, California to unveil the pact. Microsoft's Bill Gates, Hewlett-Packard Chief Executive Lewis Platt and Intel Chief Executive Craig Barrett were to be on hand.
Nortel and Hewlett-Packard planned to launch two products at the media conference, Nortel said.
The Financial Times of London reported that the deal could allow Intel and Microsoft, whose products already dominate the world's computer industry, to make inroads into a telecoms networks market worth about $250 billion.
Media reports said Nortel, officially known as Northern Telecom Ltd. until shareholders approve a name change at a meeting on April 29, initiated the alliance. The partners will develop ways for voice traffic to travel over an office network in the same way data traffic does now.
''It will, over time, enable the migration of your phone network away from your PBX (private branch exchange) to your local area network,'' said analyst Robert MacLellan at CT Securities in Toronto.
''It's a research pact. It's not new technology, it's not a new concept. It's basically putting a bit more weight behind the hammer.''
MacLellan said that it does show a laudable willingness in Nortel to get in on the ground floor of a market that will likely grow in the coming years -- an ''if you can't beat them, join them'' sensibility.
It will also capitalize on the expertise of the company's Bay Networks unit, bought by Nortel last summer for $9.1 billion.
However, it will cannibalize some of the revenues Nortel receives from the large but low-margin, low-growth private branch exchange (PBX) switching business and will force down prices telecoms
equipment vendors can charge for business telephone networks. Nortel shares moved up to a high of C$92.75 on the Toronto Stock Exchange in early action Monday, then pulled back to trade up
C$2.75 at C$92.10 in turnover of 788,605 shares. In New York,
Nortel was up 12/16 at 59-9/16.
At midday, Microsoft rose 2-11/16 to 162-7/8 on Nasdaq while Intel eased 7/16 to 117-13/16. Hewlett-Packard was up 2 at 70-7/8.
Nortel, one of the world's largest telecommunications equipment companies, revealed last week that AT&T was considering buying switches from Nortel after years of exclusive dependence on former technology arm Lucent Technologies and its predecessor company AT&T Network Systems.
($1-$1.52 Canadian)
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