Nortel to Acquire Epicon

BOSTON (06/15/2000) - Nortel Networks Corp. Wednesday announced an agreement to acquire software developer Epicon for US$275 million in stock.

Epicon, in Chelmsford, Massachusetts, makes software that enables application service providers (ASP) to deploy, install, manage and update software to thousands of desktops from a central server. Nortel acquired a 9 percent stake in Epicon last year.

Epicon's software will become a part of Nortel's new Preside Managed Application Services Platform, software that enables service providers to roll out and manage multiple applications for their customers. The Preside platform integrates Nortel's directory, policy service, service-level agreement management, customer relationship management and security software with software from partners BEA Systems, Santa Cruz Organization and iPlanet E-Commerce Solutions.

Preside will be compatible with client/server technology from Citrix Systems and will enable management and interoperability with applications such as Nortel's mySAP.com offering, desktop applications from iPlanet, and Portal Software's Infranet billing application.

These efforts are intended to address an ASP market expected to grow to $23 billion in 2003 from $900 million in 1998, Nortel says, citing data from the Gartner Group. By renting software applications instead of purchasing them, businesses can save thousands of dollars per desktop by slashing the costs of software, desktop hardware and IT services, Nortel claims.

Epicon was founded in 1997 and has 60 employees. It has both enterprise and service-provider customers. Epicon will become part of Nortel's ASP Market business unit. Nortel expects to close the transaction in the late third quarter or early fourth quarter of 2000.

Nortel's Preside platform is expected for first customer release in 30 to 45 days.

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