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Nortel starts up B2B unit
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March 28, 2000: 2:02 p.m. ET
New division taking aim at the growing market for Internet business services
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NEW YORK (CNNfn) - Computer network equipment supplier Nortel Networks Corp. on Monday launched a new business unit to target the burgeoning market for business-to-business electronic commerce services.
Nortel (NT: Research, Estimates), the world's No. 2 networking equipment maker, built the new unit around electronic business software maker Clarify Inc. and call center software developer Periphonics Corp., both of which the Ontario, Canada-based company recently acquired.
The new division, called Clarify e-Business Applications, will sell B2B and customer-management tools and services to large corporations and service providers.
The unit will give customers one point of access to a variety of products that customers must now buy from several vendors, Nortel said. This will include, for example, technology that connects wireless phones to customer information data, or equipment linking Web sites with call centers.
Already listing such Fortune 500 companies as Best Buy, Charles Schwab, General Electric, H&R Block, Level3 Communications and Qwest Communications, Nortel is targeting a market that by some estimates will reach as high as $2.5 trillion in sales by 2003 from $158 billion in 1999.
"E-business that's growing at 86 percent per annum is kind of the killer application, if you will, for that new broadband infrastructure that now we're deploying globally," said Bill Conner, head of enterprise solutions at Nortel." We think that's probably a $130-billion addressable market for us today."
Nortel also has formed an alliance with Andersen Consulting, which will work with the new unit to deliver professional services to customers using Nortel's technology, the company said.
The division, which is based in San Jose, Calif., and employs 2,600, combines the technology from Nortel's recently completed $2.1 billion stock purchase of Clarify, and its $436 million stock deal for Periphonics. Tony Zingdale, formerly Clarify's chief executive, has been named president of the new operation.
Clarify specializes in developing customer-relationship management software for electronic business applications. Periphonics makes voice recognition and online systems for company call centers and other network applications.
 Nortel shares slipped 3-1/18 to 139-15/16, a 2.2 percent decline in light-volume New York Stock Exchange trade early Tuesday afternoon.
Although the market for B2B e-commerce services is blossoming, and most industry observers agree it will play an increasing role in the computer networking industry moving ahead, some analysts see the Clarify division as a way for Nortel to boost its core business of Internet networking equipment.
"I don't think it's going to be a really huge revenue impact," said Patrick Houghton, an analyst at Sutro & Co. "This whole business-to-business implementation is probably more of a way for Nortel to sell more of its other equipment." 
--from staff and wire reports
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Nortel Networks
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