Et Tu, Morin? Then Fall, CESR!

Following a leaked memo from Metro Ethernet Networks president Phillppe Morin, Nortel Networks Ltd. today emailed journalists to say it has decided to "refocus" its investment from Carrier Ethernet Switch/Routers (CESRs) to next-generation packet optical transport equipment.

In a statement sent to Light Reading, Nortel says it is cutting back on the money it puts behind its Metro Ethernet Manager (MEM) products, Metro Ethernet Services Unit 1800s, and Metro Ethernet Routing Switch 8600s.

To clarify, Nortel will still sell these bits of kit, but it will no longer have any big new features for, or revisions to, the CESR product lines, outside of a few periodic maintenance releases.

Why? Morin's memo offers a clue: "The overall market for Carrier Ethernet is not growing at anticipated rates and that will only worsen with the global economic downturn. We will continue to invest and increase our focus on maintaining our leadership in Optical."

Nortel says it will still serve, support, and ship products to its Carrier Ethernet installed base -- and it says that the CESR decision doesn't impact its Ethernet access and aggregation products, or its Enterprise ERS 8600 portfolio.

Nortel says it will focus its packet-optical and former CESR development dollars into two areas. First, it will keep adding packet capabilities to its Optical Multiservice Edge 6500 and Optical Metro 5000 series platforms. And it will invest in metro Ethernet access and aggregation solutions, as well as staying committed to its partners that make customer premises Ethernet gear (including ANDA Networks Inc. , Axerra Networks Inc. , and others).

"We are not abandoning our Carrier Ethernet technology innovation, but simply focusing our Carrier Ethernet investment away from the switch/router segment," Nortel's statement to Light Reading says. "This decision supports the goal to make Nortel a more focused company."

In his leaked memo, Morin's closing paragraph hinted at the jobs toll this move might take: "Even though this is the right business decision, I realize it's more tough news for employees and will impact the Carrier Ethernet team."

— Phil Harvey, Editor-in-Chief, Light Reading