According to Steve Nicolle, Nortel Networks’ vice-president, Service Ware Solutions, the acquisition of Toronto-based Architel Systems Corporation is another strategic step in the company’s mission to create a high-performance Internet that is more reliable and faster than ever before. The acquisition will allow service providers (SPs) to rapidly provide Internet and other next-generation Internet Protocol (IP) services.
According to David Wright, analyst, Software and Services field, with Toronto-based BMO Nesbitt Burns, “It’s (Nortel) competing
with Cisco and Lucent.and they are buying
up companies somewhat like Architel, so this allows Nortel to eventually ship hardware devices that have software loaded on them that enable the end customers to get telephony provisioning up and running fairly quickly.”
With the acquisition, Nortel will expand its Preside(x) portfolio by automating the service provisioning process, enabling SPs to provision and activate services for individual customers in minutes, not the weeks or months it takes many networks. This, according to Nicolle, will allow SPs the opportunity to deliver value-added Internet services to businesses and consumers with greater speed, quality and reliability.
“What Architel brings to that equation is product portfolio, [and] people with experience that will enable us to bring rapid and reliable service activation,” said Nicolle. “We’re talking about activation in minutes rather than days, weeks, months as it is today.”
He added, “The combined capability, we believe, is a market-making, market-leading, service-enabling software solution. The value is brought directly to the service providers, but is realized by their customers – small, medium business, large business and consumers.”
According to Nicolle, Preside is a key element of the high-performance Internet, providing a foundation for e-business and other Internet applications, enabling applications like VPNs or e-business Web sites to work seamlessly with any connection medium, such as optical, cable, wireless or high-speed DSL service.
“[We’re] very focused on hitting the market running and targeting some very high-running service offerings,” said Nicolle. “We’re focused on high-speed access, specifically DSL services
.best example is IP Virtual Private Networking services.”
He added that within Nortel’s Preside portfolio the company has “made the investment in the activation capabilities against optical networks.” Stressing that what Architel brings to the table is the ability to rapidly and reliably activate IP services, and high-speed access DSL services with optical services.” He considers the combination of these solutions as “unique” in the industry.
Architel’s president and CEO, Stuart Griffith, sees the transaction as “a tremendous strategic fit for our company,” citing the “considerable amount of time over the last year in transitioning our company, in re-focusing our efforts on supporting next-gen. networks and services. This transaction is a fulfilment of the work we’ve done in that space.”
He added that the two companies share a common vision and strategy in this space, and that Nortel’s global reach, marketing and sales power is the best way to leverage their solutions.
“Our customers want this, this is market driven.and in bringing our two businesses together we will be the first to provide an end-to-end service delivery solution for next-generation networks and service providers,” he said.
Service providers will be able to offer a one-stop shop in delivering bundled services to businesses and consumers, while businesses and consumers will be able to overcome the cost, complexities and delays of implementing these high-speed Internet services. The combination of Architel’s technology with Preside and recently acquired customer care solutions from Clarify, will provide an integrated bridge between the customers, the services they want to use and the Internet.
According to Wright the acquisition will serve both sides well. He mentioned both Nortel’s and Architel’s customer base as key aspects to the acquisition.
He said, “Architel certainly has a broad list of customers, specifically within the telecommunications industry with its own product, there’s probably some incremental customers to Nortel.” He added that,”Nortel must have customers that Architel doesn’t currently sell to, so this would help them. Also they (Architel) probably have other technologies that you might be able to integrate.”
Nortel will acquire all of the common shares of Architel, for an estimated US$395 million in Nortel common shares, with the transaction expecting to close in late second quarter or early third quarter of 2000, pending regulatory, court and shareholder approval.