That's a world Nortel Networks Corp. (NYSE/Toronto: NT) wants to see, according to Brian McFadden, president of Nortel's newly morphed Metropolitan Optical division (see Nortel Does a Metro Shuffle and Nortel's Empty Room at the Top).
In an interview with Light Reading here at Supercomm 2001, he described how Nortel sees city-based application, processing, and storage services opening a new era in telecom -- and new opportunities for Nortel.
"Optical networking changes the way products are delivered to customers." And, he says, optical networking will help Nortel prove once and for all that IP services are a compelling alternative to in-house investment in application processing power and storage.
Hold the phone. McFadden's vision isn't a new one. Indeed, talk of application service providers (ASPs), storage service providers (SSPs), and other 'xSPs' seems like yesterday's news -- a trend that hasn't taken off.
McFadden says the trouble's been that services haven't been proven as reliable as they should be. "I think we're in for a big seachange in corporate networks, and it will happen as enterprises see proven trustworthiness and capabilities in metro networks."
Nortel's launching a campaign to prove its point, one that includes the following strategies:
- New products. Nortel aims to increase the reliability of metro services by porting them to Ethernet and using new techniques to make them more manageable. "You need things like tunable lasers, filters, and switching elements to create agile optical networks," McFadden asserts. In this vein, Nortel demo'd tunable laser capabilities for its OPTera Metro optical DWDM systems at the show (see Nortel Demos Tunable Laser). (No date on when they'll be generally available.)
Nortel also plans to add functions to products like its Alteon Web Switch. "We already offer content and load balancing," says McFadden. "In the future, balancing might occur in storage farms as well."
- Alliances with key enablers. Nortel's enlisted EMC Corp. (NYSE: EMC), IBM Corp. (NYSE: IBM), and Microsoft Corp. (Nasdaq: MSFT) as partners in various metropolitan networking projects worldwide.
"Microsoft wants to change its business strategy. It recognizes that the future of applications lies with services, and it's looking to Nortel as the market leader in optical networking to help get it right," McFadden says. In turn, Nortel hopes Microsoft will help attract business customers to metro services powered by Nortel gear.
- Pushing for presence. By increasing its customer presence worldwide, Nortel hopes to be in the right place at the right time, when applications, storage, and processing start to take off as services. Indeed, McFadden claims Nortel already serves key providers in 18 of the world's largest 20 cities. And the vendor announced new contract awards with Korea Telecom, Sprint LTD, and France Telecom this week.
If Nortel can pull its strategy together, it stands to win not only in the metro space but in the backbone network too, McFadden says. As metro services increase and move to higher speeds, such as 40-Gbit/s over the next couple of years, that will drive changes in the backbone as well, fueling sales of the vendor's other products.
But McFadden acknowledges the difficulties involved. The market is tight, and Nortel is challenged to hold its share in the face of increasing competition. Still, he's determined, and he puts it simply: "This is an area in which we must succeed."
- Mary Jander, Senior Editor, Light Reading
http://www.lightreading.com For more information on Supercomm 2001, please visit the Light Reading Supercomm 2001 Site.