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Nortel 'Rightsizes' Terabit Router

Light Reading
News Analysis
Light Reading
6/26/2001

Nortel Networks Corp. (NYSE/Toronto: NT) officials today confirmed that the company has laid off approximately 200 people in its Optera Packet Core router division in response to the slowdown in demand for telecom equipment gear.

The layoff effectively cuts the Optera Packet Core’s development staff in half, as there had been approximately 400 employees working on the project, according to Nortel officials.

”We’re rightsizing the development initiative because there is not sufficient demand for a multiterabit switch/router in the current market downturn,” said Andy Lark, vice president of communications for Nortel. “Right now we’re relying on our Passport 15000 and the capabilities in the Juniper initiative.”

The Optera Packet Core was a next-generation terabit router for the core of telecommunications networks, designed to meld IP routing technology with core optical networks, based on MPLS (multiprotocol label switching). The product still hasn’t shipped, even though it was scheduled to by June of this year.

The announcement is another sign that Nortel hasn't made much progress in core routing -- and may be looking to cut its losses. In that market, the company has been reliant on a reseller agreement with Juniper Networks Inc. (Nasdaq: JNPR) and has struggled to develop and sell its own products (see Juniper-Nortel "Alliance" Gives Pause and Nortel Discloses Terabit Router Plans ).

Nortel's relationship with Juniper is difficult to quantify, but some analysts said that it may not be one of the most significant deals for Juniper.

The core router market is dominated by Juniper and Cisco, which together hold about 99 percent market share, according to The Dell'Oro Group (see Report: Juniper Still Gaining On Cisco). And sales for those leaders have slumped in recent months, with carriers scaling back massively on spending efforts in the core of the network (see Core Slowdown Hits Juniper).

Although the cutbacks cast more doubt on a program that has struggled over time, the move isn’t likely to have a material effect on Nortel’s business: Because the product never shipped, it didn’t produce revenue for the company. A Nortel spokesperson said the cutbacks came in response to a slowdown in demand for core switching and routing products.

In midday trading, Nortel shares were down 0.51 (5.66%) to 8.50.

— R. Scott Raynovich, Executive Editor, Light Reading
http://www.lightreading.com

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Belzebutt
Belzebutt
12/4/2012 | 8:10:45 PM
re: Nortel 'Rightsizes' Terabit Router
"Nortel's relationship with Juniper is difficult to quantify, but some analysts said that it may not be one of the most significant deals for Juniper."

Do you mean that Juniper makes more money on their deals with Ericson or Alcatel?
BigHead
BigHead
12/4/2012 | 8:10:43 PM
re: Nortel 'Rightsizes' Terabit Router
OPC is the same as Project Blue.

Equinox is a separate project, it's essentially
a 40G system (OC-768)
joe_average
joe_average
12/4/2012 | 8:10:43 PM
re: Nortel 'Rightsizes' Terabit Router
Hi,

Can anyone provide a translation between all these project names? Are these all the same product? If not, what are the differentiators?

Thanks!
chechaco
chechaco
12/4/2012 | 8:10:43 PM
re: Nortel 'Rightsizes' Terabit Router
Lack of progress and cuts in R&D by Nortel porve that they're losing expertise in this specific area. And you can't leapfrog over some complex issues. You have to work through them or you'll always be behind, behind your schedule and competition.
testdude
testdude
12/4/2012 | 8:10:41 PM
re: Nortel 'Rightsizes' Terabit Router
The writing was on the wall when Nortel Showed up at Suppercomm with there OPTera Connect PX interworking with a Juniper Router.
See:
http://www.lightreading.com/do...

This was supposed to be OPC's grand inauguration. This is where OPC was supposed to be THE PRODUCT. All they did was fill in the blanks with Juniper instead of OPC. It's to bad because OPC was as kick ass project and would have been a viable competitor. Just Bad Timing.

We also had this discussion on a previous article.

See: http://www.lightreading.com/do...
mrcasual
mrcasual
12/4/2012 | 8:10:41 PM
re: Nortel 'Rightsizes' Terabit Router
>OPC is the same as Project Blue.

100% correct.

>Equinox is a separate project, it's essentially a 40G system (OC-768)

Correct but a little confusing. Equinox is 40G SONET. It doesn't have any router-like capabilities. It's just a big bit mover.
Belzebutt
Belzebutt
12/4/2012 | 8:10:40 PM
re: Nortel 'Rightsizes' Terabit Router
So Equinox is not HDX?
lordcirrus
lordcirrus
12/4/2012 | 8:10:39 PM
re: Nortel 'Rightsizes' Terabit Router
>So Equinox is not HDX?

Equinox = HDX and LH5000
skeptic
skeptic
12/4/2012 | 8:10:37 PM
re: Nortel 'Rightsizes' Terabit Router
"Nortel's relationship with Juniper is difficult to quantify, but some analysts said that it may not be one of the most significant deals for Juniper."

Do you mean that Juniper makes more money on their deals with Ericson or Alcatel?
--------------
I belive at various points that Nortel has tried
to claim that they have some sort of special
relationship with juniper (different than the
other dinosaurs that resell Juniper).

Nortel (at some points) has used an undefined
"special relationship" with juniper to try and
put a good spin on nortel's exit from the ip
router space.

As best I know, the special relationship seems
to be that Juniper sticks to core routers and
doesn't compete in other product spaces where
alcatel/nortel can still sell products.

Pseudopersonality
Pseudopersonality
12/4/2012 | 8:10:37 PM
re: Nortel 'Rightsizes' Terabit Router
>So Equinox is not HDX?

>Equinox = HDX and LH5000<

Don't forget, everything is Optera!

Got to love those multiple program names. :>)

BTW Project Blue was also = Nebraska!
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