1. Northern Telecom Ltd. acquires Bay Networks

Without question, this was the networking deal of 1998.

When Nortel bought Bay for a whopping US$9.1 billion, it unleashed a trend amongst vendors to converge traditional data networking with voice and video networks. Lucent Technologies beefed up its data networking content by acquiring Prominet and other start-up companies, and Cisco, being, well, Cisco, has been moving in this direction for a few years.

What’s all the fuss about convergence? The idea of running everything on a single network is supposed to bring more benefits at a cheaper cost. But most network managers are sitting tight for now because the technology is far from mature. Also, having voice and data each competing for network-traffic priority could raise problems.