Nortel Networks To Acquire Shasta Networks: To
Deliver Breakthrough Capabilities for Carriers and
ISPs to Create New Internet Services For Mass Business Market
US$340 Million Acquisition Targets Enabling US$23 Billion IP Services Market
TORONTO, April 13 /PRNewswire/ - Nortel Networks (NYSE: NT/TSE: NTL) announced today an agreement to
acquire Shasta Networks, Inc, a privately-held company based in Sunnyvale, CA, which has developed a new class of
service-enabling gateways and subscriber policy management systems at the ''subscriber edge'' of Internet Protocol (IP)
public data networks. Nortel Networks and Shasta Networks will enable the next generation of IP value-added services
for the mass business market.
Nortel Networks will pay up to US$340 million in common shares and cash for Shasta Networks, Inc, a portion of which
will be deferred and paid contingent upon Shasta Networks achieving certain business objectives. The acquisition is
expected to close within 30 days, and comes three months after the acquisition of Cambrian Systems Corporation, a
leader in Optical Internet technologies for metropolitan networks.
''With the acquisition of Shasta Networks we are extending our Carrier and Enterprise leadership in delivering IP services
to the mass business market,'' said John Roth, vice chairman and CEO, Nortel Networks. ''We are now the first major
networking company to enable both high-speed access and a new class of IP services for the mass business market. The
capabilities and tools we deliver will allow Carriers, Service Providers and other third parties to unlock the door to a
US$23 billion market opportunity.''
Nortel Networks will combine its Intranet Services technology with Shasta's product line to deliver technologies that
enable Carriers to create a new generation of IP services for the mass market over the first-mile infrastructure. Service
Providers will use these capabilities to address the small and medium business market and specialized communities of
interest such as franchise and dealer networks. They will be able to easily craft, implement and support new IP-based
services such as Virtual Private Networks (VPNs), eCommerce, managed security, inexpensive wide area networking and
performance control unheard of with today's Internet.
''With this announcement, Nortel Networks is changing the rules of the game in the IP market'', said Clarence Chandran,
president, Carrier Packet Solutions, Nortel Networks. ''As Carriers begin the transition to the new IP public data
network, Nortel Networks brings to the table not only its brand name, worldwide distribution and third-party integration
capabilities but now also Shasta. Today we are showing our real and deep understanding of the needs and strengths of
Carrier customers and ISPs as they tackle the immense opportunity for high-speed IP services. This is more than just
another connectivity play.''
''Shasta was founded to meet the need for an entirely new class of networking system'', said Anthony Alles, co-founder
and president of Shasta Networks. ''Systems that go far beyond legacy connectivity solutions to finally enable intelligent,
profitable IP public data networks. Shasta has a world-class team and solution, and we knew we needed a world-class
partner to take our products to the Carrier market and ISPs. Only Nortel Networks, of all the major networking vendors,
truly gets the importance of IP services. We know that with Nortel Networks' critical expertise, technologies and access to
the global Carrier and ISP spaces, that we both now have the means to realize our vision and seize leadership in this
immense new market.''
Shasta's Subscriber Service System (SSS) is the industry's first carrier grade, integrated hardware, software and
operations system for enabling the scalable deployment of network-based, value-added services. The SSS allows IP
Service Providers, for the first time, to logically aggregate tens of thousands of subscribers and centrally provision for these
subscribers highly customized, access independent IP services, such as virtual private networks, managed firewalls and
quality of service policies. Until now, such capabilities have been available only through expensive combinations of many
types of single function CPE, which are difficult and costly to deploy, manage and upgrade, particularly relative to new,
low cost access technologies like Digital Subscriber Line (DSL).
The Shasta SSS consists of three highly inter-linked components:
1. Subscriber Service Gateway (SSG): the most scalable, robust and high
performance platform for subscriber aggregation and service delivery.
2. IP Service Operating System (ISOS): operates on the SSG and is the
only operating system that provides the subscriber awareness and data
plane flexibility needed to enable customized services for individual
customers.
3. Shasta Subscriber Policy Manger (SPM): a highly sophisticated and
flexible provisioning system, which lowers the cost of service
deployment through the creation of customizable service profiles.
Together, Nortel Networks and Shasta will drive the industry evolution from 'dumb' IP connectivity to new, low-cost,
carrier-grade IP-based services that enable eCommerce for the mass business market. By unifying Shasta's product
portfolio with other Nortel Networks products, new service elements can also be easily added, such as IP telephony, to
enable virtually limitless service creation possibilities. These capabilities will both address the real needs of the mass
business market for outsourced services, while also building a profitable new business model for Service Providers and
Carriers, leveraging their existing strengths in segmented marketing and sales.
With the announced acquisition of Shasta, Nortel Networks is increasing its momentum in IP-enabled services. Today's
announcement builds on other IP service and network announcements: Aptis Communications, Inc (April, 1998),
delivering carrier-grade remote access for consumers; Bay Networks, Inc (August, 1998), delivering extranet switch,
policy services, cable modems, routing and management; and most recently Cambrian Systems Corporation (December
1998), enhancing Nortel Networks' delivery of metropolitan high-speed on-ramps to the Optical Internet. Recently, Nortel
Networks announced agreements with major national and global carriers for first-mile and central office evolution
capability that include IP, Packet, DSL and Cable technologies.
''With the acquisition of Cambrian Systems, we are speeding up on-ramps to the Internet backbone and creating the
Optical Internet'', said Clarence Chandran. ''With today's announcement, Carriers and Service Providers can overlay the
next generation Internet with new value-added services that create new revenue streams and competitive advantage - for
themselves and for the mass business market.''
The market for IP Services is growing at 30 percent per year and will be US$23 billion by 2001 according to International
Data Corporation.
Anthony Alles, Tom Daly and Arthur Lin, previously executives at Cisco Systems, founded Shasta Networks in March
1998. Its chairman and CEO, Wu Fu Chen, was co-founder of Cascade Communications and numerous other networking
startups. These include Ardent Communications, which was acquired by Cisco Systems, where Mr. Chen was vice
president of Technologies prior to joining Shasta. Shasta's approximately 70 employees will continue to be based in
Sunnyvale, CA, and will work with Nortel Networks' significant Enterprise and Carrier capabilities in Silicon Valley.
Shasta was selected by Data Communications magazine as one of its ''Hot Startups'' of 1998. Shasta was also selected
by Technologic Partners, an industry analyst firm, for its 1998 ''Investors' Choice'' honors. Its products are currently in
beta testing with Carriers worldwide and are expected to be commercially deployed in the third quarter of 1999.
Nortel Networks' common shares are listed on the New York, Toronto, Montreal, Vancouver, and London stock
exchanges. Nortel Networks had 1998 revenues of US$17.6 billion and has approximately 75,000 employees worldwide.
Nortel Networks disclaims any proprietary interest in the marks and names of others
The securities offered to shareholders of Shasta Networks have not been registered under the Securities Act of 1933, as
amended and may not be offered or sold in the United States absent registration or an applicable exemption from
registration requirements.
Certain information included in this press release is forward-looking and is subject to important risks and uncertainties. The
results or events predicted in these statements may differ materially from actual results or events. Factors which could
cause results or events to differ from current expectations include, among other things: the impact of rapid technology
change and voice and data convergence; price and product competition; international growth, foreign exchange, and
interest rates; general industry and market conditions and growth rates; unanticipated impact of Year 2000 issues; and the
impact of consolidations in the telecommunications industry. For additional information with respect to certain of these and
other factors, see the reports filed by Nortel Networks with the United States Securities and Exchange Commission,
specifically the most recent reports on Form 10-K. Nortel Networks disclaims any intention or obligation to update or
revise any forward-looking statements, whether as a result of new information, future events or otherwise.
SOURCE: Northern Telecom Limited
More Quotes and News:
Northern Telecom Ltd (NYSE:NT - news; Montreal:NTL.M - news)
Related News Categories: telecom
Help
Copyright © 1999 PRNewswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without
the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in
reliance thereon.
See our Important Disclaimers and Legal Information. |
