Unified Networks

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Unified Networks
Solutions behind Vision
Peter Boland VP Strategic Marketing
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Nortel Networks Europe Presence

• 19,700 employees (incl JVs)
• 13 Manufacturing Sites
• 15 RD Labs
• RD, Manufacturing and Sales in 37 countries
  in Europe (EMEA) with a total of 70 locations.
• Investment 400 M in European RD in 98,
  employing 4,000 people.
• Recruit about 500 new graduates annually

Sales in Europe 1998
3.7 B 21
Nortel / Bay 17.6 B
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The Web changes everything

• New kinds of consumer behavior
• New service provider entrants
• New business models
• Information perishability accelerates days to
  minutes
• Business processes become network-centric
• Change in Infrastructure cost
• trade-offs
• Low cost of entry to global business

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Trend Data Dominance
IP traffic doubling every 100 days
More than 300 million web pages created in the
first 5 years
Each day 1.5 million pages added
IP commerce growth twice rest of economy
Chat room traffic now exceeds 1-800 calls
500,000 people have downloaded VocalTecs software
Europe has the fastest internet growth globally
Europe represents 10 of the 11 largest
international Internet markets
The Data Revolution is Driving Network Evolution
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• European Service Market Study
• Key Messages

• 83 of Respondents consider Managed Network
  Services as a major growth area

• 55 of respondents consider that Wireless Data
  Access already is or will become a major growth
  area for their company within 2 years.

• 50 of respondents consider that over 20 of
  their voice traffic will be transported over data
  networks within 2 years.

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Creating New Revenue Sources
Other
Voice
eCommerce
Advertising
Data Subscription
Wireless Internet
Features

• eCommerce
• eMedia subscriptions
• Advertising
• Voice/data access

Airtime / LD
Subscription based
Wireless Internet alters the revenue and
services model
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Internet Report Card
Speed
Reliability
21,000 Min.
Network Downtime
Estimated 2.5 billion hours wasted during Web
page downloads in 1998
Internet Today
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Paradigm Shift caused by Internet
Interpersonal Interbusiness
Interpersonal Interbusiness
Intranet as prime vehicle
Internet as prime vehicle
1998
Low value content
High value content
Removed communication barriers - opened up
information interbusiness networking
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Demand Drives a New Requirement for Capacity
1.6 Tb
Capacity Revolution
320 Gb
2.5 Gb
50 Mb
Moores Law
1984
1994
1998
2000
But Thats Not Enough
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The Breakthrough...
1.6 Tb
Cost perGigabit - Mile
Capacity Revolution
320 Gb
2.5 Gb
50 Mb
Moores Law
1993
1998
2002
1984
1994
1998
2000
The Coming Together of Capacity and Radically
New Economics
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London to Paris Bandwidth Pricing
40k for 2 Mbits/s 1998
STM-1 ( 150 Mb) now costs less than an E1 ( 2
Mb) from BT/FT
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The Revolution of the Internet...

• Competitive alternatives are emerging
• Price/performance options over copper
• Other media - cable, wireless
• Consumer demanding faster speeds

1000G 100G 10G 1G 100M 10M 1M 100k 10k
Optical Networks
Performance Gap
Access
1980
1999
...Starting with the First Mile
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A new industry of applications services
Every day 1000 new applications are born
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Traditional Market Segments
Wireless
Data
Wireline



Enterprise
Enterprise
Carrier

Telephony
Telephony
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The Lines are Blurring
UNIFIED NETWORKS
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www.nortelnetworks.com

• RD Investment
• 2.5 billion per year
• 20,000 engineers
• focused on customer
• 3 patents filed per day
• Internet / IP leadership
• 1.5 billion of RD invested in IP
• 7,000 IP-savvy experts
• Complimentary acquisition strategy
• Bay Networks
• Aptis
• Cambrian Systems
• Shasta
• Periphonics

Networking _at_ webspeed
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The Roots of Unified Networks

• User-driven innovation
• rapid services evolution
• accessibility to rich content
• promise of performance, high throughput,
  robustness
• user values of ubiquity, mobility, ease of use

WEB

Voice
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Unified Network Vision
Services ManagementLayer
Internet Packet Traffic
Transport and Packet Switching infrastructure
Transport Networking Infrastructure Layer
PSTN GSM Wireless
AccessLayer
Any service, any time, any where
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Access Evolution
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IP Telephony Market Evolution
4-Advanced Services
Market Opportunity ()

• 3-Infrastructure
• PSTN equivalent features
• Voice / Data convergence
• Better facility utilization
• Riding the IP curve
• Moving to open architecture

• 1-Hobbyist
• Marginal voice quality
• Proprietary solutions
• Users hobbyists early adopters

• 2-Arbitrage
• Bypassing access fees
• Managed networks
• Standards emerge

1996
1997
1999
2000
1998
2001
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The New Communications Industry
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Unified Network Services

• Why it is used?
• - wealth creation
• eCommerce
• Hosted Applications
• Internet telephony

• What makes it work?
• - intelligence (VPNs)
• Service management
• Policy based
• CoS and SLAs

• What is it made of?
• - low cost per bit
• Optical
• High speed access
• Next generation switches

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Service-Ware
Applications
Applications
ServiceWare
VirtualNetworks
VirtualPlatforms
Enabling Infrastructure
Policy Directory Managing the relationships
Service Management Managing the capability
Network Management Managing the network
Who, What, Where, When At what quality, At what
price, At what privacy The Service Level Agreement
VPNs, Firewall, Telephony, Access Services,
Tunnels, Bandwidth ...
Elements, Topology Fault, Configuration,
Performance
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Nortel Networks Implementation