Clearly Canadian?

No more stock market numbers this week. I promise. I will not talk about the continuing crisis in Asia that has spread to South America and beyond or the worsening crisis in Russia. And I'm certainly not going to talk about how the Starr/Clinton debacle is adding chaos to an already uncertain market. It's time for a vacation. And what better place to go than Canada.

We tend to overlook Canada sometimes, preferring to think of it merely as the source of a few good entertainers, a few good beers, some great hockey players, undoubtedly the shortest route to the North Pole, and the home of Terrence and Phillip. But lest we forget, technology is alive and well in the Great White North.

Last week, two of the largest Canadian technology firms, Nortel and Newbridge, each engaged in merger maneuvering. Nortel announced its plans for the integration of Bay Networks (now a Canadian firm) while Newbridge announced that it was selling off ACC, which had originally been an American firm and then a Canadian firm run by an English friend of mine, Bert Whyte. Now it's a Swedish firm, still run by Bert.

Just to keep things even, Newbridge also acquired a Canadian firm, Vancouver-based Castleton Networks. To be fair, Castleton was already an affiliate of Newbridge with offices in Kanata, Ontario, where a significant portion of Canada's networking technology has originated.

The new structure of the combined Nortel/Bay empire is relatively straightforward and will likely work well.

Bay keeps its name and chief executive and those warmer California digs, while getting a good bit of technology and financial stability. Nortel gets Silicon Valley knowhow to fend off challenges from IP-based telecom arrivistes such as Cisco, access to a wide range of enterprise network customers and a warm sunny place to visit during the non-summer months up north.

In other words, there are no big surprises [See Bay deal done, new divisions named, Network World, 9/7/98, for more details].

The Newbridge deals, however, are more interesting. Newbridge - recently outfitted with a new president - has engaged in two smaller moves that while not overly important by themselves, signal a bit of change, and perhaps a bit more opportunity, for this firm.

Newbridge purchased its stake in ACC from Ungermann-Bass back in the early 1990s. While it has never owned the company outright, its majority share has been useful as a source of technology and engineering talent - despite the fact that ACC never took off as a routing vendor on the scale it hoped (along the lines of a Wellfleet or Cisco). Rather, this firm has posted a slow but solid increase in revenue and is far from the major cash drain as many have speculated in the past.

Divesting ACC helps Newbridge better focus on its core markets as it tries to fend off competition from the likes of Lucent, Nortel and Alcatel (not to mention Cisco).

Meanwhile, Newbridge has opened up the possibility of collaboration with Ericsson, a major player in the international telephony market. Not only does Newbridge get an endorsement for its Carrier Scale Internetworking (CSI) agenda, it also gets full access to the ACC organization. And in a world where major partnerships, mergers and acquisitions can happen to all sorts of nice people, having a potential development/marketing relationship with Ericsson can only help. (Newbridge is currently in deep with Germany's Siemens. AG.)

But what does all this mean to a network manager? That the more things change, the more they stay the same. Bay may now have a Canadian accent, but don't expect to see major changes because of that except for the better, thanks to the financial stability Nortel brings.

Let's discuss that a bit. In addition to showing the continued rise of the one-stop-shopping vendor -there are few real niche vendors left among the big players - it shows the increasing irrelevance of political borders.

Every vendor, it seems, has become internationalized. In addition to Nortel/Bay, look at Lucent. With its announced moves into data communications, we expect Lucent to go on a buying spree by year-end. Sure, Lucent has often been named as the company to take over 3Com or Cabletron, but now the rumors focus on mergers or acquisitions with such international concerns as Alcatel, Siemens or even Finland's Nokia.

Yet, I've heard rumblings that some people feel less comfortable making a major purchase from a "foreign" vendor. But what do borders mean these days? Some Chevrolets are actually Toyotas under the hood. And look at the impact instability in foreign markets has had on revenue of American firms.

Should users be concerned about foreign competition? International tariffs? Continental protectionism? Yes, they should. But rather than look to these areas as points to be avoided, we all need to start thinking on a bit more of a global scale and learn to properly deal with these issues through political, business and consumer channels.