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Nortel Networks's US$300-million acquisition of Kanata, Ont.-based Cambrian Systems Corp. last month fills a gap in the company's Dense Wavelength Division Multiplexing (DWDM) portfolio and positions it to better compete against Lucent Technologies in the metropolitan area, according to industry observers.
Nortel is buying privately held Cambrian from several different stakeholders, the largest being Newbridge Networks Inc. of Kanata, Ont., which owns 40 per cent of Cambrian. Newbridge chairman Terry Matthews owns another 20 per cent, which he has agreed to sell.
Cambrian Systems specializes in DWDM technology for metropolitan area networks (MANs), a market Nortel did not previously have expertise in, one analyst explained.
"Nortel didn't really have a metropolitan-type system in the DWDM space, and Lucent did. So clearly, that was something that was missing in [Nortel's] product space," said Bob Hafner, vice-president and research director at market research firm Gartner Group Canada, based in Mississauga, Ont.
Christin Flynn, analyst at The Yankee Group in Boston, said that although Nortel currently has products that provide DWDM over long-haul networks, it probably felt pressure to accelerate its MAN strategy through an acquisition.
"My assumption would be that Nortel is buying Cambrian to try to keep up with Lucent," Flynn said.
She noted that Lucent's metro-area DWDM technology is not generally available yet, but she said...