Nortel Aims to Take the Wind out of Cisco's Sails

Nortel Networks (Thailand) Ltd. recently introduced its routing and Internet Protocol (IP) software called Open IP Environment, which will Internet-enable a variety of servers, PCs, consumer appliances, mobility devices, set-top boxes and processors.

In a direct attack on Cisco Systems Inc., Nortel has also halved the prices of its Passport AN/ANH, ARN, ASN and BN routers. While routing remains vital, says the Canadian telecom company which purchased Bay Networks, routers have become merely a commodity.

"We are moving away from old-world routers to an Open IP environment based on software and silicon, which dramatically reduces the cost of networking and makes the Internet accessible to everyone," said Thongpipat Poshyananda, Nortel Networks' country manager. "The Open IP environment ushers in a new era of networking that expands the way businesses and consumers use the Internet."

The company also announced that Intel plans to offer elements of the Open IP environment with its Internet Exchange (IX) architecture, to enable a new generation of software programmable network devices.

Nortel says its software will drive the shift away from expensive and complex router hardware to low-cost routing and IP software, which can be embedded directly into servers, processors and devices. The company says 75 licenses have already been issued to companies who are embedding the Open IP environment into their products.

Pravin Mirchandani, director of external relations at Nortel in Maidenhead, U.K., said that the company is basically taking the routing functionality from the router box and distributing it wherever it is required. "If you want routing in your PDA, for example, it will be delivered there," he said.

The Windows operating system is a strategic platform for Nortel's Open IP Environment. The company's enterprise routing protocol (OSPF), a key component of the Open IP Environment, is currently shipping in Microsoft Windows NT Server 4.0 and is also part of the Windows 2000 server.

Nortel plans to support the necessary protocols so that Windows 2000 and Open IP Environment devices and systems can inter-operate on end-to-end quality of service (QoS) and network security.

In its bid to attract new customers and win back former customers, Nortel has cut its access data router prices in half. The company says Cisco's routers are "proprietary", and says its architecture is "monolithic", offering limited flexibility. Nortel says its Open IP Environment enables greater interoperability, new applications and products, while accelerating the pace of innovation and Internet growth.

A senior analyst at Current Analysis, in Sterling, Va, said: "Nortel is now uniquely poised to punch a hole in the Cisco IOS (Internetwork Operating System) model. It will take some time, but the possibility is real". Nortel is currently a distant second behind router-market leader Cisco.

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