Nortel Networks is offering a new optical services bundle to application service providers which will enable them to provide their corporate customers the speedy and secure information technology needed to run their business without having to hire as many costly technicians to keep it running.
With the service bundle, which combines Internet Protocol (IP) technology with Nortel's optical network, the company hopes to tap the corporate outsourcing market, which, according to estimates, will hit US$20 billion in three years. The offering includes communications gear, the services and software required at data centers, as well as complex ways to integrate the many layers of technology.
"The announcement is a breakthrough," said Pascal Aguirre, vice president at Renaissance Strategy and leader of its global ASP practice. "Of all the network vendors out there, Nortel seems to be the one that recognises the massive transformation the service provider is going to undergo, almost as important as when the Internet happened."
The next wave of corporate computing, Aguirre said, is toward providing content and application services and away from pure network services over a "dumb pipe." With ASPs offering to outsource large parts of business drudgery, Nortel has developed the whole chain of what they need, he said.
Nortel will demonstrate its IP/Optical Services Platform at the National Fiber Optic Engineers Conference this week in Denver and expects to start customer shipments later this year.
The new platform adds Gigabit Ethernet and optical technology to the Shasta technology Nortel gained through an acquisition last year. Shasta developed multiservice switch technology that gathers, grooms, separates and routes voice, data and video, moving it onto metro-area networks.
Coupling speedy optics with virtual private network services opens the market to companies of all sizes, said John Collins, director of optical application marketing at Nortel. The mixture also means faster provisioning, better security and fewer routing mistakes, he added.
"It gives ASPs more of a one-stop shop than they have ever had," said Steve Byars, director of carrier infrastructure at Current Analysis. "But we do expect that rivals will position this as a closed, proprietary solution, and the industry, through initiatives, is looking more to open standards based on connectivity between data and optical systems." With open standards, he said, service providers can pick the best from multiple vendors and gain the advantages of competitive prices in each part of the chain.
But Nortel is pitching its bundle as a way to use a single source at the edge of the service provider's network.
"The new platform is a key to localising the Internet and placing services and processing power where they belong - at the edge of the network," said Don Smith, president of Optical Internet at Nortel.
Large corporations typically have operated on a Balkanised system of copper, Ethernet, optical and wireless technologies to connect and route their data, video and voice. That's made it difficult to merge complicated tasks such as videoconferencing, sending cable channels to customers or securing medical records.
Nortel took advantage of the fact that virtually every large company uses Ethernet technology as part of the mix. By including a card with gigabit processing capacity, Nortel said, service providers can put any size company on an all-Ethernet system.
"It's an important contributor to helping corporations outsource their IT and other types of service requirements," said Brian Van Steen, an analyst at RHK, a telecommunications research firm.
