Nortel Networks’ recent buyout of content-aware switching manufacturer Alteon WebSystems Inc. should result in improved service levels for Alteon customers and give Nortel a lead in a sector that is starting to boom, according to one analyst.

The deal, announced in late July, will see Nortel dole out US$7.2 billion in stock for ???-based Alteon. Nortel plans to integrate Alteon’s content-aware switching technology with Nortel’s storage products, Gigabit switches, professional services, hosted application management/delivery and caching offerings. The Brampton, Ont.-based company will also integrate the technology with its third-generation wireless offerings.

Analyst Dan McLean of IDC Canada Ltd. in Toronto said the deal should be reassuring news to Alteon’s installed customer base.

“Alteon customers would probably be happy about this,” he said. “They will probably feel better in buying from an established company like Nortel…Alteon didn’t have the service expertise of a Nortel.”

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