Nortel unwraps the future
Through the depths of the telecom collapse and struggles to get the company back on track, a group of top engineers in Ottawa and Boston laboured in secret to create what Nortel is betting is its Next Big Thing, Bert Hill writes.
Bert Hill
The Ottawa Citizen
Tuesday, May 11, 2004
David Hudson, Nortel's vice-president of data product strategy, led the team that developed Neptune -- the Multiservice Provider Edge 9000 router. It gives the troubled networking giant's customers new technology that does more, more reliably, more cheaply. For Nortel, the technology could restore much of its lost lustre.
CREDIT: Jean Levac, The Ottawa Citizen
"Will all great Neptune's ocean wash this blood clean from my hand?" -- Macbeth.
When the top-secret Neptune router project was conceived in the spring of 2002, Nortel Networks Corp. chief executive Frank Dunn was struggling with a collapse in customer demand that almost wrecked the company.
And when the new router was rolled out yesterday under an instantly forgettable new name -- Multiservice Provider Edge 9000 -- Nortel was still shaking from an accounting scandal that wrecked Mr. Dunn's career.
Nortel is making a big bet that the new edge router has the competitive innovation that will wash away the sins of the past and build a prosperous future.
David Hudson, 41, Nortel's vice-president of data product strategy, said yesterday the new router will deliver to telephone and cable company customers "the same rich content experience on their video, voice and cellphone services that they get when they do a Google search on the Internet."
Nortel and several big competitors already have some similar products on the market.
But Mr. Hudson said existing gear lacks the power and flexibility to support the advanced video, security and anti-spam features that are coming on the market.
"With our product a grandmother receiving a streaming video of a grandchild's birthday party will get the full experience, not a tiny postage-stamp picture in the corner of the screen."
For Nortel's customers, the new technology promises 60 per cent lower operating costs and 30 times more reliability.
For Nortel, the technology is a big bet that it can build innovative technology inside its own operations better than innovative startups such as Laurel Networks and faster than industry router giant Cisco Systems.
More to the point, the big Nortel hoopla surrounding yesterday's announcement -- which included news conferences in Ottawa and London and a big customer conference in Miami -- offers an escape from the accounting scandal.
Mr. Hudson said the revision of past financial results "is not the backdrop we wanted for this product announcement" but that the Neptune project kept the development team anchored through the controversy.
It's a huge burden to bear for a router box that is half the size of a refrigerator -- and about as exciting to look at.
But one thing is for sure: The Neptune name is now banned. "The marketing guys charge us 25 cents every time we use the N-word," said Dan Ducharme, one of about 250 engineers and other employees in Ottawa and Billerica, Massachusetts, who built the box.
Mr. Hudson said the decision to develop the new product came out of a tough review of current and proposed projects in the spring of 2002 in which cutting was the order of the day.
"There was every reason to do nothing, but the cabinet (Mr. Dunn and other top Nortel executives) gave us approval to explore the concept."
Late that year the idea got formal approval and an undisclosed budget.
Mr. Hudson, a 16-year veteran, got unusual freedom to cherry-pick the development team from current staff, some engineers who had been laid off, and some outsiders.
"Once we started recruiting outside, the competition soon knew what we were up to. The race was on."
Alcatel and Tellabs bought startups to broaden their technology offerings. Juniper Networks brought out a new router, and Cisco has a product aimed at the same market.
Laurel Networks, a startup, already has one of the most ambitious edge routers already on the market.
Mr. Hudson said the Nortel edge router is different because it was built from scratch, eliminating the performance compromise of competitors who are buying parts of their systems and building on older foundations.
As the Neptune router took shape in Labs 6 and 7 of the Carling campus and in another routing development centre near Boston, Mr. Hudson worried that the complex business might run into trouble.
"One morning I ran into Graham Thomsen (the head of the hardware development team) at Tim Hortons (Nortel has a campus outlet.)
"They had just put the hardware through the first tests. 'No smoke,' he told me."
Developing the software was even more complex because it is now a much bigger and more complicated part of advanced gear.
The development team worked long hours in conference room C22 of Lab 7 to get ready for the launch.
"I came in one morning to discover a big stain on the conference table," Mr. Hudson said. "I thought they had left a switch on the table, but the stain was actually from all the pizza they had been ordering in."
After several years of decline, demand for edge routers started to grow late last year. Market research companies expect demand for edge routers to grow 20 per cent annually in the next three to four years to reach about $6 billion U.S.
The Neptune could prove to be one of the biggest product innovation to emerge from the Ottawa development operation since the development of advanced optical gear in the early 90s and new wireless networking access technology last year.
However, Light Reading, a communications industry online publication that has been tracking Neptune, said yesterday the new product "does most of what is anticipated, (but) some of the key features aren't coming to market just yet."
Nortel expects to have most of the features ready later this year. Light Reading also said some software in the new product was acquired under a licence from a startup.
Yesterday Nortel announced that Equant, a major French phone company that caters to the airline industry, Telus of Vancouver and Infonet of the U.S. have started or will start laboratory trials of the product.
Didier Duriez, an Equant senior vice-president, said his company will make a decision on whether to purchase the Nortel product before the end of the year. He said the company needs routers to support demand for new voice over Internet traffic.
"Nortel is a very sold performer in a market where there are not a lot of suppliers."
© The Ottawa Citizen 2004
Through the depths of the telecom collapse and struggles to get the company back on track, a group of top engineers in Ottawa and Boston laboured in secret to create what Nortel is betting is its Next Big Thing, Bert Hill writes.
Bert Hill
The Ottawa Citizen
Tuesday, May 11, 2004
David Hudson, Nortel's vice-president of data product strategy, led the team that developed Neptune -- the Multiservice Provider Edge 9000 router. It gives the troubled networking giant's customers new technology that does more, more reliably, more cheaply. For Nortel, the technology could restore much of its lost lustre.
CREDIT: Jean Levac, The Ottawa Citizen
"Will all great Neptune's ocean wash this blood clean from my hand?" -- Macbeth.
When the top-secret Neptune router project was conceived in the spring of 2002, Nortel Networks Corp. chief executive Frank Dunn was struggling with a collapse in customer demand that almost wrecked the company.
And when the new router was rolled out yesterday under an instantly forgettable new name -- Multiservice Provider Edge 9000 -- Nortel was still shaking from an accounting scandal that wrecked Mr. Dunn's career.
Nortel is making a big bet that the new edge router has the competitive innovation that will wash away the sins of the past and build a prosperous future.
David Hudson, 41, Nortel's vice-president of data product strategy, said yesterday the new router will deliver to telephone and cable company customers "the same rich content experience on their video, voice and cellphone services that they get when they do a Google search on the Internet."
Nortel and several big competitors already have some similar products on the market.
But Mr. Hudson said existing gear lacks the power and flexibility to support the advanced video, security and anti-spam features that are coming on the market.
"With our product a grandmother receiving a streaming video of a grandchild's birthday party will get the full experience, not a tiny postage-stamp picture in the corner of the screen."
For Nortel's customers, the new technology promises 60 per cent lower operating costs and 30 times more reliability.
For Nortel, the technology is a big bet that it can build innovative technology inside its own operations better than innovative startups such as Laurel Networks and faster than industry router giant Cisco Systems.
More to the point, the big Nortel hoopla surrounding yesterday's announcement -- which included news conferences in Ottawa and London and a big customer conference in Miami -- offers an escape from the accounting scandal.
Mr. Hudson said the revision of past financial results "is not the backdrop we wanted for this product announcement" but that the Neptune project kept the development team anchored through the controversy.
It's a huge burden to bear for a router box that is half the size of a refrigerator -- and about as exciting to look at.
But one thing is for sure: The Neptune name is now banned. "The marketing guys charge us 25 cents every time we use the N-word," said Dan Ducharme, one of about 250 engineers and other employees in Ottawa and Billerica, Massachusetts, who built the box.
Mr. Hudson said the decision to develop the new product came out of a tough review of current and proposed projects in the spring of 2002 in which cutting was the order of the day.
"There was every reason to do nothing, but the cabinet (Mr. Dunn and other top Nortel executives) gave us approval to explore the concept."
Late that year the idea got formal approval and an undisclosed budget.
Mr. Hudson, a 16-year veteran, got unusual freedom to cherry-pick the development team from current staff, some engineers who had been laid off, and some outsiders.
"Once we started recruiting outside, the competition soon knew what we were up to. The race was on."
Alcatel and Tellabs bought startups to broaden their technology offerings. Juniper Networks brought out a new router, and Cisco has a product aimed at the same market.
Laurel Networks, a startup, already has one of the most ambitious edge routers already on the market.
Mr. Hudson said the Nortel edge router is different because it was built from scratch, eliminating the performance compromise of competitors who are buying parts of their systems and building on older foundations.
As the Neptune router took shape in Labs 6 and 7 of the Carling campus and in another routing development centre near Boston, Mr. Hudson worried that the complex business might run into trouble.
"One morning I ran into Graham Thomsen (the head of the hardware development team) at Tim Hortons (Nortel has a campus outlet.)
"They had just put the hardware through the first tests. 'No smoke,' he told me."
Developing the software was even more complex because it is now a much bigger and more complicated part of advanced gear.
The development team worked long hours in conference room C22 of Lab 7 to get ready for the launch.
"I came in one morning to discover a big stain on the conference table," Mr. Hudson said. "I thought they had left a switch on the table, but the stain was actually from all the pizza they had been ordering in."
After several years of decline, demand for edge routers started to grow late last year. Market research companies expect demand for edge routers to grow 20 per cent annually in the next three to four years to reach about $6 billion U.S.
The Neptune could prove to be one of the biggest product innovation to emerge from the Ottawa development operation since the development of advanced optical gear in the early 90s and new wireless networking access technology last year.
However, Light Reading, a communications industry online publication that has been tracking Neptune, said yesterday the new product "does most of what is anticipated, (but) some of the key features aren't coming to market just yet."
Nortel expects to have most of the features ready later this year. Light Reading also said some software in the new product was acquired under a licence from a startup.
Yesterday Nortel announced that Equant, a major French phone company that caters to the airline industry, Telus of Vancouver and Infonet of the U.S. have started or will start laboratory trials of the product.
Didier Duriez, an Equant senior vice-president, said his company will make a decision on whether to purchase the Nortel product before the end of the year. He said the company needs routers to support demand for new voice over Internet traffic.
"Nortel is a very sold performer in a market where there are not a lot of suppliers."
© The Ottawa Citizen 2004
