some more on nn's IP strategy...
Newbridge Networks Corp.
Dow Jones Newswires -- April 28, 1999
Newbridge's Northchurch Stake Hints At IP Strategy
By Ben Dummett
TORONTO (Dow Jones)--Newbridge Networks Corp.'s (NN) long-awaited strategy in response to the explosive growth of Internet traffic could be starting to show itself.
Newbridge, Kanata, Ont., is mainly known for developing high-speed asynchronous transfer mode (ATM) networks to transmit voice and data services. However, increasingly more traffic is being delivered over networks based on Internet Protocols (IP) or networks that combine ATM and IP technologies.
In February, Newbridge indicated it would reveal its strategy for Internet-based networks, including the consolidation of certain affiliate operations in the Boston area, in the coming weeks. So far, no announcement has been made.
But earlier this week, Northchurch Communications Inc., Andover, Mass., revealed that Newbridge is one of its investors. Northchurch makes next-generation router gear for IP and ATM networks. Its other outside investor is Celtic House, the private investment arm of Terry Matthews, Newbridge's chief executive.
Northchurch, which was founded by former executives of Bay Networks Corp. and Digital Equipment Corp., has developed router technology that works at the edge of either an ATM or IP network, to give a carrier's customers access to data, voice, video and e-commerce services.
Northchurch is also exchanging technical information with Ironbridge Networks Inc., another Boston-area start-up in which Newbridge is an investor, a Northchurch spokeswoman said. Ironbridge, which offers a terabit router that transmits data and voice over networks at superfast speeds, and NorthChurch also plan to test their equipment to make sure they work together. This joint effort largely results from both companies' link to Newbridge, the Northchurch spokeswoman said.
NorthChurch Investment Jibes With Newbridge IP Vision
Jim Arsenault, Newbridge's executive vice-president for Internet products, declined to comment on Newbridge's investment in Northchurch or to provide any specifics about the company's IP strategy. Arsenault is scheduled to talk about Newbridge's vision for next-generation networks at the Hambrecht & Quist technology conference in San Francisco Wednesday.
Still, the ability of Northchurch's equipment to work over IP or ATM networks seems to fit with Newbridge's overall strategy.
Newbridge is developing network solutions that allow carriers to offer multicast real-time video, e-commerce and other advanced services over an IP or ATM network, or using a hybrid network consisting of the two technologies, which is often favored by carriers since many of them already have ATM networks. This strategy also involves offering technology that allows carriers to offer newer services only when the customer wants them to better ensure the carriers make money from the products, Arsenault explained.
"Service providers are looking for (a networking solution) to help them capitalize on what they already have in place and capitalize on the new growth in IP," Arsenault said.
Newbridge's bigger competitors also seem to share that view. For example, Lucent Technologies Inc. (LU), Murray Hill, N.J., unveiled Wednesday new products that allow Internet service providers, alternative carriers, and traditional telephone companies looking to get into new businesses to offer voice and data services over IP or ATM networks.
In addition to Newbridge's investment in Northchurch and Ironbrige, analysts have said the company's IP strategy also hinges on investments in two other start-ups. These include:
- Bridgewater Systems Corp., Kanata, Ont., which offers software that allows Internet service providers to easily charge customers different rates depending the level of service they receive;
- Abatis Systems Corp., Burnaby, B.C., which has developed an algorithm that registers contents of packets of data sent over a network, allowing carriers to use their networks more efficiently.
-By Ben Dummett; 416-943-7807; ben.dummett@dowjones.ca
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