Nortel plan targets data center

Nortel plans virtualization, reliability products tied to VoIP, UC offerings

Nortel to make data center push next year, early 2009.

Nortel plans to push deeper into the data center next year with products that stress virtualization and reliability, and dovetail with the company’s VoIP and unified communications offerings.

In a conference call hosted by investment firm CIBC World Markets, Steve Slattery, president of Nortel’s Enterprise Solutions group, said Nortel will deliver in late 2008 or early 2009 products targeted at corporate data center virtualization and reliability. He did not provide detail on what these products might be -- CIBC expects a data center router -- but said they will be important to Nortel’s overall data center strategy.

“That’s a space we need to be in,” Slattery said, in response to an analyst query on Nortel’s data center strategy vs. recent emphasis from Cisco, Foundry and other enterprise competitors. “We’re not going to be first to market, we’ll be delivering a compelling value proposition.”

That value proposition will be tied directly to Nortel’s VoIP and unified communications offerings, including those being developed with Microsoft under the Nortel/Microsoft Innovative Communications Alliance (ICA). The companies unveiled the first fruits of that effort early this year and Slattery said they’ve closed more than 200 new customers for ICA products.

The upcoming data center offerings will also feature all of the “bells and whistles” and be optimized to work with an integrated branch office system that Nortel’s also developing for a 2008 debut. This offering integrates Nortel’s 4134 Secure Router with Microsoft’s Office Communications Server and eventually with Nortel’s Communications Server 1000 IP PBX to bring voice, switching, VPN, firewalls and a VoIP gateway into one system for branch offices, and go “head-to-head” against Cisco’s Integrated Services Router, Slattery said.

“We have a pretty significant product development to deliver the capability and density” required for data centers applications, Slattery said. “There’s pent-up demand for a strong alternative to Cisco.”

Cisco recently unveiled its Data Center 3.0 strategy and a raft of virtualization and switching products to support it.

Also next year, Nortel plans to unveil its own line of wireless LAN (WLAN) switches and access point based on the IEEE 802.11n Multiple-input Multiple-output (MIMO) standard. Nortel currently resells WLAN gear from Trapeze Networks under an OEM arrangement.

“This is a fundamental capability we need to own ourselves,” Slattery said. “When it comes to MIMO we have significant [intellectual property] there.”

Nortel is looking to roll out its own 802.11n switches and access points in the fourth quarter of 2008, Slattery said. The company will continue to offer the Trapeze-based 2300 line in the interim, he said.

Meanwhile, Nortel plans to eventually integrate its application acceleration appliance into its switches as a module, Slattery says. The Nortel Application Accelerator 510 and 610 appliances have received “good customer engagement” in all regions, he says, but Nortel has other plans for those products and capabilities.

“We want to get out of appliances and look at how we can integrate it into more of our switching portfolio,” Slattery said. “That’s really the focus going forward.”

With regard to mergers and acquisitions -- a hot topic with Nortel of late, with all kinds of speculation surrounding its alleged interest in 3Com, Foundry, F5 and others -- Slattery said Nortel’s been busy sizing up potential targets even though the company’s not yet pulled the trigger.

“We’ve been working feverishly over the past 18 months looking at opportunities,” he said. “But we will not overpay for an asset. It needs to be accretive in order for us to move forward.”

Copyright © 2007 IDG Communications, Inc.

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