Nortel regroups on Carrier Ethernet, bets on optical

As a part of its downer conference call yesterday, Nortel said it's going to stop investing in its Carrier Ethernet switch/routers and put the money into optical transport.

Putting money into optical makes business sense as Nortel is seeing both momentum (i.e. growth) and stability (i.e. fewer competitors, less craziness) in its 40G/100G offerings. Since the company is going through Chapter 11 bankruptcy proceedings, and announced a $2.1 billion loss in Q4, it's going to be doing a lot of triage in order to see some pieces survive.

Product lines that won't see any more development include the Metro Ethernet Routing Switch 8600, Metro Ethernet Services Unit 1800 and the Metro Ethernet Manager element and domain management system. Product lines not affected by the move include Ethernet access and aggregation systems, and Nortel's enterprise Ether Routing Switch 8600 portfolio.

Nortel will continue to "work with customers" - provide service support, ship products to its Carrier Ethernet switch/router installed base, and offer transport products for Ethernet service providers.

For more:
- Network World examines Nortel's Carrier Ethernet regrouping.
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