Radware pays $18 million for Nortel's Alteon assets

* Radware negotiates bargain price, pledges development/support for Alteon gear

Radware has successfully completed its acquisition of Nortel's application delivery gear, the company announced on Tuesday.

For the bargain price of $18 million, Radware gains Nortel’s Layer 4-7 switches for application acceleration and load-balancing, plus certain related intellectual property assets, tangible assets, inventory and service contracts. Radware also has taken on a number of employees from Nortel’s application delivery group.

Radware says it will continue to sell Nortel’s application delivery gear under the Radware Alteon brand and invest in the products’ development. Radware also is promising a five-year product support plan for existing users of the Alteon gear, which Nortel gained in its 2000 purchase of Alteon WebSystems. The $18 million price Radware negotiated is a big drop (to put it mildly) from what Nortel paid nine years ago for the Alteon business: $7.8 billion.

In a letter to Alteon customers and partners, Radware CEO Roy Zisapel said 20 Alteon experts have joined Radware’s technical support and systems engineering teams. He also said improvements are in store for Nortel’s application switching products.

“We pledge to significantly increase the amount of R&D and QA engineers that are dedicated to the Alteon product line and to leverage key technologies from Radware’s product line,” Zisapel said in the letter. “By doing so, we will be able to accelerate the development of the Alteon product line as we provide you with ongoing maintenance software releases and feature releases. You can expect the addition of many, leading advancements during 2009.”

The products that Radware now owns include the Nortel Application Accelerators 510 and 610; Nortel Application Switches 3408E, 2424E, 2424 SSL E, 2216E, 2208E; and the Virtual Services Switch 5000. The deal with Radware, which was first announced in February, calls for Nortel to continue to resell the newly rebranded Radware Alteon equipment.

Nortel, which filed for bankruptcy protection in mid-January, has been working to sell off parts of the company, in addition to its application delivery business. Also reportedly up for sale are its metro Ethernet division, wireless equipment business and a unit that builds telecom systems for offices.

Meanwhile, Nortel continues to implement other aspects of its reorganization plan, including a round of layoffs announced in February.

Copyright © 2009 IDG Communications, Inc.

The 10 most powerful companies in enterprise networking 2022