Newbridge Networks unveils IP services strategy
Newbridge Networks Corp NNC
Shares issued 178,579,237 Aug 24 close $40.95
Wed 25 Aug 99 News Release
Mr. Alan Lutz reports
Newbridge Networks has enhanced its strategic Internet protocol (IP)
portfolio, which offer service providers the ability to generate revenue by
delivering differentiated IP services. The company has completed
negotiations for two acquisitions that will combine industry-leading IPSec
from TimeStep Corporation, of Kanata, Ont., and innovative IP edge routers
from Northchurch Communications Inc., of Andover, Mass. The move expands
the addressable market and greatly enhances the company's ability to
deliver innovative IP services solutions.
According to Infonetics Research, Inc., a leading market research firm, the
IP-VPN services market will reach $11-billion (U.S.) by 2001. The service
provider edge market is expected to grow from $1-billion (U.S.) today to
$3-billion (U.S.) by 2002.
"Today's announcement introduces a solution for service providers to move
beyond simple IP transport to making money by offering differentiated IP
services," said Alan Lutz, president and chief operating officer, Newbridge
Networks. "It builds on our enhanced IP service solution, which enables
service providers to meet their requirement to offer billable IP services
that possess the quality of service attributes essential for handling voice
and video services."
"We are focused on hot growth markets with an eye to enabling carriers to
deliver revenue-generating services," said Jim Arseneault, executive
vice-president, IP and Internet working products group, Newbridge Networks.
"By entering the right markets at the right time, and blending the best of
IP and ATM, we can immediately address the exploding markets for IP-VPNs
and intelligent edge routers and enable e-services."
With the commoditization of Internet connection services, carriers are
eager for innovative technology to help them launch new, revenue-generating
business and residential IP services. TimeStep's IPSec technology, embedded
into the Newbridge enhanced IP platforms, provides a critical element in
building secure IP-VPN solutions. The Northchurch edge service router, a
next-generation programmable platform, integrated into Newbridge's rich
service management suite of products, enables the creation of personalized
IP services, further enhancing the intelligence of the edge router.
"TimeStep views this acquisition as a big win for both companies, but more
importantly it is a win for our customers," said Tim Hember, president and
chief executive officer, TimeStep Corporation. "Within Newbridge, we will
extend our industry-leading secure IP-VPN solutions into global,
geographically distributed secure services, while continuing to develop the
best IP-VPN technology into the next millennium."
A pioneer in the secure IP-VPN industry, TimeStep has focused on developing
scalable and manageable secure IP-VPN solutions for network service
providers and large enterprises. TimeStep's flagship product line recently
won Network Magazine's 1999 Product of the Year and InfoWorld's Golden
Guardian Award. TimeStep has taken a strong leadership role in the
development of the IPSec standard. Its suite of hardware gateways, software
clients, and central management is the most comprehensive solution for
corporate intranets, extranets, and Internet remote access.
"Newbridge Networks' global presence and managed network solution model
will strengthen TimeStep's award-winning VPN offerings to partners such as
GTE Internetworking," said Robert McKinney, director of VPN and Internet
security services, GTE Internet working. "The acquisition of Timestep by
Newbridge Networks affirms GTE Internet working's selection of Timestep's
secure and scalable VPN technology as a key component of our
market-leading, managed VPN Advantage service."
The Northchurch platform provides industry-leading circuit aggregation
capacity, offering over 4,000 T1s in a seven-foot rack. It is the only edge
solution capable of wire-speed traffic management and processing at OC-48
line rates. Integration of this platform into the powerful Newbridge
management suite will afford service providers a highly flexible solution
supporting industry-leading QoS, traffic shaping, VPNs and accounting
combined with simplified policy management, traffic monitoring, profiling
and planning functionality.
"Combining Northchurch's strength in IP routing with the strong presence of
Newbridge in carrier service management will, for the first time, offer
service providers the ability to deliver true carrier-grade IP services to
its customers," said David Sawyer, president and chief executive officer,
Northchurch Communications.
"Service providers like SAVVIS/Bridge have been looking for a system-level
approach to IP services, offering high-capacity access, flexible
interfaces, and carrier grade routing support. At the same time, we want a
solution that provides us with the ability to deploy value-added services,
such as IP-VPNs, traffic shaping, and intelligent subscriber management,"
said Dr. Rick Bubenik, executive vice-president and chief technology
officer, SAVVIS/Bridge. "Strengthened by the Newbridge management offering,
the Northchurch intelligent edge device gives Newbridge a unique market
opportunity, allowing it to introduce IP-based services with the service
quality associated with its ATM-based product offering."
"Early on, Northchurch recognized the need to deliver both a
next-generation router device and an IP-based service delivery platform,
thus maximizing the overall size of the market opportunity," said Michael
Howard, principal analyst, Infonetics Research, Inc. "Northchurch's
technology will result in new market opportunities and an increased
customer reach for Newbridge."
The total cost of the acquisitions to Newbridge is expected to be
approximately $350-million, payable in cash over the next two years. The
acquisition costs include projected performance payments. The Newbridge
ownership position prior to the acquisitions was approximately 30 per cent
in each of TimeStep and Northchurch.
A takeover bid circular in connection with the TimeStep acquisition will be
mailed to TimeStep shareholders shortly. The acquisition has been approved
by the board of directors of Newbridge and is subject to various closing
conditions. The board of directors of TimeStep has agreed to support the
acquisition. The acquisition of Northchurch is expected to close over the
next week.
(c) Copyright 1999 Canjex Publishing Ltd. canada-stockwatch.com |
