Nortel to Complete Convergence Story with Tasman Buy

The proposed acquisition of router company Tasman marks Nortel's return to the enterprise routing market.

After a four-year hiatus from the enterprise routing market, Nortel Networks Corp. today jumped back in with its proposed $99.5 million acquisition of Tasman Networks Inc.

The Brampton, Canada, company says it hopes to fill in missing pieces of its end-to-end converged networks story with Tasman, an eight-year-old router company that markets high performance routers primarily through VAR, telephone company and service provider partners.

"For 2006 its critical we complete our convergence-ready network offering. We have the Bay RS portfolio, but it is not being actively developed. We needed something faster than what we could develop internally," said Peter Cellarius, business leader for routing, security and wireless at Nortel in Santa Clara, Calif.

/zimages/1/28571.gifClick here to read about Ciscos multivendor network management play.

Nortel was slow to recognize the need to provide a viable alternative to Cisco Systems Inc. routers for the enterprise, after it slashed its Bay RS router budget in 2002 and allowed it to languish in the market. The Tasman acquisition, expected to close in the first quarter of 2006, fills that gap.

"Over the last few years, Juniper [Networks Inc.] launched an enterprise router, 3Com [Corp.] launched a couple of routers, but there really isnt a clear No. 2 router vendor [after Cisco]. If youre going to pitch the end-to-end message, they had to do something," said Zeus Kerravala, vice president of infrastructure and security research at Yankee Group Research Inc. in Boston.

/zimages/1/28571.gifTrapeze partners with Nortel on mesh networking. Click here to read more.

Tasmans routers for small and medium branch offices provide routing and multicast services, and they are known to perform well in handling small packets—key for VOIP (voice over IP), according to Cellarius, who said the routers will bring greater security for voice and data applications than what is available in existing Bay RS branch office routers.

Tasman had under development an IDS/IPS (intrusion detection system/intrusion prevention system) for its branch office routers for much of 2005. It should be available in the second quarter of 2006, Cellarius said.

Tasman routers, designed for higher performance and lower TCO (Total Cost of Ownership), will become a part of the Nortel Secure Router family for small and midsized branch offices. The line provides routing and multicast services, and it can run multiple services such as voice, VPNs, firewalls and QOS (quality of service.)

With the Tasman additions, the line is intended to provide an alternative to Cisco Systems Inc.s Integrated Services Routers. "They have many of the same capabilities that ISRs do, but they are faster at processing smaller packets," Cellarius said.

"What I think a lot of companies are looking for is a multipurpose LAN device like Ciscos ISR. This is a relatively small deal. It wont turn Nortel around, but it does give them a legitimate end-to-end WAN play," Kerravala said.

The deal may also signal the sleeping giants intent to compete more aggressively in the enterprise networking arena than it has in the past several years.

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