Nortel Secures Tasman Buy

Canadian manufacturer Nortel Networks is beefing up its enterprise-grade router line to meet the increasing demand for converged networks — the blending of voice, video and data.

The company acquired Tasman Networks for $99.5 million in cash Tuesday, a deal that’s expected to close in the first quarter of 2006. According to Pat Cooper, a Nortel spokesman, the company is transitioning Tasman’s 160 employees and doesn’t anticipate any job losses as a result of the purchase.

Tasman’s hardware falls under Nortel’s new secure router portfolio, an area that’s currently populated by Tasman’s 1000 Series and 3120 routers. Nortel’s router group delivers secure WAN traffic to and from enterprise branch and remote offices.

With the purchase, Nortel is looking to shore up its operations following a company reorganization announced in September.

The reorg divided Nortel’s product portfolio of routers, switches and other hardware into two categories: enterprise solutions and packet networks; and mobility and converged core networks.

Steve Slattery, Nortel’s enterprise solutions and packet networks president, said the Tasman buy strengthens its position with converged, multimedia and secure IP telephony, otherwise known as VoIP .

“We anticipate that the Tasman products will complement our enterprise infrastructure solutions and further our ability to provide seamless, feature-rich networks that support critical real-time applications — including voice, video and streaming media applications,” he said in a statement.

Tasman’s 3120 Converged Services Router sends the large number of small data packets used in IP telephony both securely and quickly. According to a benchmark tests provided by Tasman and conducted by testing and consulting firm The Tolly Group, the 3120 “far surpassed” results achieved by Nortel’s biggest competitor, Cisco Systems .

Convergence is a hot topic within the company and officials are looking to integrate information with interaction. Speaking at a trade show earlier this year, Nortel CTO Phil Edholm preached about the need to get enterprise VoIP performance costs down.

He noted that for every dollar spent on VoIP equipment, $3 to $4 were going toward network infrastructure support.

Nortel has spent much of 2005 trying to pull itself out of the morass caused by an executive shakeup and accounting scandal to compete with industry giant Cisco.