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February 10, 2003

Nortel Networks Introduces New Technologies to Deliver Enterprise Applications

Advanced Business Connectivity Enables Customers to Serve Applications Reliably, Securely

SANTA CLARA, Calif. – Nortel Networks* [NYSE/TSX: NT] announced a framework for delivering critical applications that is supported by a new class of networking products and designed to enable enterprise customers to tightly integrate business processes and key applications with suppliers, partners and customers worldwide.

This framework, called Advanced Business Connectivity, takes a holistic approach to improving customer communications infrastructure to facilitate secure and reliable delivery of business applications to end users.

A key enabler of Nortel Networks ‘One network. A world of choice.’ enterprise vision, Advanced Business Connectivity moves networking beyond the conveyance of data to provide users with the ability to access information without communications infrastructure boundaries. Advanced Business Connectivity adds a layer of application intelligence that positions customers to drive a greater return on existing server and network investments while minimizing total ownership cost.

“This strategy draws together the required elements that offer companies the ability to coordinate more closely with greater security,” said Zeus Kerravala, vice president, Enterprise Infrastructure, Yankee Group. “The ability to share business applications with people that do not have direct access to the corporate network has the potential to eliminate critical barriers to improving communications and coordination and, hence, productivity. Delivering the elements of this strategy together as a solution makes a lot of sense. It draws on the strength of Nortel Networks technology and provides market differentiation that plays to their advantage.”

“Business processes have changed dramatically in the last several years, but the state of network performance has not kept pace,” said Oscar Rodriguez, president and general manager, Enterprise Networks, Nortel Networks. “The Advanced Business Connectivity initiative addresses the end goal of enhancing business productivity – how to serve applications that will, in turn, make employees, partners and customers more productive and engaged.”

“Instead of tinkering at the periphery, the Advanced Business Connectivity framework allows enterprises to free their applications, and gives companies the flexibility to balance accessibility with the appropriate level of security,” Rodriguez said. “This initiative changes the nature of how business operates – making work an activity and no longer a destination.”

Because so many business activities rely on applications like Internet telephony, streaming media, resource planning, e-mail, file transfer and financial activities, managing information in a meaningful way has resulted in a centralized computing environment for enterprises that is generally neither secure nor reliable. This makes it difficult to share critical information with remote employees, and particularly ineffective and insecure for partners, suppliers and customers.

Advanced Business Connectivity is designed to provide a consistent experience for users, whether sitting at a desk at the company’s headquarters, at a customer site, or via an Internet kiosk at an airport. The experience should also remain consistent regardless of the type of device used to access the network, be it a company-issued computer with a VPN client, a Web-enabled cell phone, or a browser accessed from a remote location. Most importantly, accessing business applications must be secure, but security cannot come at the price of performance. At the same time, the infrastructure must be scalable and able to adapt to the business cycle of enterprises.

The Advanced Business Connectivity suite of products is based on Nortel Networks “Security in the DNA” principles, in which robust, multi-layered security features are incorporated into the design of platforms. Because of the tight integration of security features, built-in redundancy, automatic fail-over capabilities and commonality of platforms, Advanced Business Connectivity solutions are designed to offer business continuity.

The Advanced Business Connectivity initiative is part of the overarching enterprise vision, ‘One network. A world of choice.’ It is centered on a commitment to productivity, options and convergence. This convergence eliminates boundaries between services, users and locations while delivering a consistent user experience no matter where or how the network is accessed. ‘One network. A world of choice.’ offers a new level of customer engagement, bringing enterprises the power of choice in deployment options. Providing solutions in voice over IP, data and optical networking, Nortel Networks offers its enterprise customers the simplicity and cost savings of converged networks, information sharing across platforms, ‘five nines’ reliability, and simplified deployment of security measures.

The new products announced as part of the Advanced Business Connectivity initiative include:
  • Nortel Networks Alteon* Application Switch 2424. To provide intelligent traffic management based on the attributes of virtually any application, Alteon 2424 relies on an enhanced architecture that includes high-performance distributed processing resources as well as new, application-specific processors. Designed to optimize delivery of applications, this new platform offers the hallmarks of the Alteon line – features, performance, scalability and security. Alteon Application Switch 2424 will be available later in February 2003.
  • Alteon Application Switch 2424-SSL. The Alteon 2424-SSL adds SSL processing and SSL VPN integrated security applications to the features of Alteon 2424. In addition to SSL acceleration, Alteon 2424-SSL supports simple provisioning of SSL VPNs to provide secure remote access to applications such as e-mail, file sharing, Telnet and Web-based applications without compromising unrestricted end-user mobility. This platform will be available in April 2003.
  • Nortel Networks Passport* 8600 equipped with SSL Acceleration Module. Equipped with the Alteon 8661 SSL Acceleration Module, Passport 8600 Intelligent Routing Switch frees up critical network computing resources by offloading SSL processing from servers to improve network performance for large enterprises and service providers. Layer 7 switching and URL switching capabilities of encrypted data are designed to ensure users are directed to the correct content within the data center. Alteon 8661 will be available later in February 2003.
  • Passport 1600 Routing Switch portfolio. Targeted at medium businesses, Passport 1600 Routing Switches leverage the stringent performance characteristics, reliability and security of the industry-proven Passport line in a smaller footprint. The Passport 1600 series will be available in April 2003.
  • Nortel Networks BayStack* 380-24F. BayStack 380-24F Switch, equipped with all gigabit fiber ports, provides Layer 2 aggregation. Its Layer 2 functionality and extremely high bandwidth are intended to provide low cost of ownership. This product will be available in March 2003.
Nortel Networks is an industry leader and innovator focused on transforming how the world communicates and exchanges information. The Company is supplying its service provider and enterprise customers with communications technology and infrastructure to enable value-added IP data, voice and multimedia services spanning Wireless Networks, Wireline Networks, Enterprise Networks, and Optical Networks. As a global company, Nortel Networks does business in more than 150 countries. More information about Nortel Networks can be found on the Web at www.nortelnetworks.com.

Certain information included in this press release is forward-looking and is subject to important risks and uncertainties. The results or events predicted in these statements may differ materially from actual results or events. Factors which could cause results or events to differ from current expectations include, among other things: the severity and duration of the industry adjustment; the sufficiency of our restructuring activities, including the potential for higher actual costs to be incurred in connection with restructuring actions compared to the estimated costs of such actions; fluctuations in operating results and general industry, economic and market conditions and growth rates; the ability to recruit and retain qualified employees; fluctuations in cash flow, the level of outstanding debt and debt ratings; the ability to meet financial covenants contained in our credit agreements; the ability to make acquisitions and/or integrate the operations and technologies of acquired businesses in an effective manner; the impact of rapid technological and market change; the impact of price and product competition; international growth and global economic conditions, particularly in emerging markets and including interest rate and currency exchange rate fluctuations; the impact of rationalization in the telecommunications industry; the dependence on new product development; the uncertainties of the Internet; the impact of the credit risks of our customers and the impact of customer financing and commitments; stock market volatility; the entrance into an increased number of supply and outsourcing contracts which contain delivery and installation provisions, which, if not met, could result in the payment of substantial penalties or liquidated damages; the ability to obtain timely, adequate and reasonably priced component parts from suppliers and internal manufacturing capacity; the future success of our strategic alliances; and the adverse resolution of litigation. For additional information with respect to certain of these and other factors, see the reports filed by Nortel Networks with the United States Securities and Exchange Commission. Unless otherwise required by applicable securities laws, Nortel Networks disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

*Nortel Networks, the Nortel Networks logo, the Globemark, Alteon, Passport and BayStack are trademarks of Nortel Networks.

Contact for Press and Analysts:

Pat Cooper
Nortel Networks
(408) 495-9608
pat.cooper@nortelnetworks.com

Giorgia Casnedi
Nortel Networks
+44 1628 43 3117
casnedi@nortelnetworks.com

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