Nortel Networks Enhances Intelligent Internet Security Solutions Portfolio; Software, SSL Processing Capabilities to Bolster Enterprise, Service Provider Networks.

Business Editors/High-Tech Writers

SANTA CLARA, Calif.--(BUSINESS WIRE)--March 26, 2002

Nortel Networks (NYSE:NT)(TSE:NT.) today announced enhancements to its

Intelligent Internet Security Solutions portfolio designed to make securing networks easier and more flexible for network administrators while providing multi-gigabit data throughput, critical for high-volume enterprise sites and service providers.

"These enhancements to the Intelligent Internet Security Solutions portfolio demonstrate our commitment to providing customers with robust networking equipment designed to deliver a safe architecture without compromising performance, network accessibility or speed," said Atul Bhatnagar, vice president and general manager, Intelligent Edge Solutions, Nortel Networks.

"Security presents a dynamic challenge, but we feel we have eliminated the trade-off between a secure network and a high-performance network," Bhatnagar said. "These latest security upgrades offer features that augment defensive efforts, while at the same time accelerating network functionality."

The cornerstone of the Intelligent Internet Security Solutions portfolio is Nortel Networks Alteon Security Cluster, designed to deliver multi-gigabit per second acceleration of security applications. Alteon Security Clusters have been fortified with the upgraded software capabilities of Nortel Networks Web Operating System (Web OS) version 10.0; increased secure traffic processing with Secure Sockets Layer (SSL) Accelerator 3.0; and introduction of the mid-range Alteon Switched Firewall System for enterprise customers requiring fewer concurrent sessions.

"Nortel Networks has leveraged its IP security and load balancing expertise from the Alteon product line and married it with industry-leading firewall technology to create a compelling next generation security solution for the enterprise," said Joel Conover, senior analyst, Current Analysis. "The combination of Nortel Networks Alteon Web traffic management and SSL acceleration tools enable Nortel Networks to offer customers a single, secure solution without the usual associated bottlenecks and choke points."

Web OS 10.0 offers several new security features for Alteon Web switch products, as well as for Nortel Networks Passport 8600 Layer 2-7 switches equipped with Web Switch Module. New in this Web OS release is a Layer-7 Deny Filter that is designed to enable the Web switch to refuse any data traffic that carries known means for hacker attacks and viruses before that traffic can reach the servers in a data center.

"In addition to defending the network from viruses and unauthorized users, strengthening Alteon Security Clusters positions enterprise customers to protect their critical infrastructure from internal threats," Bhatnagar said.

Protection from application abuse is a key feature of Web OS 10.0. This is designed to enable the Web switch to monitor use of all data center services, thus protecting network resources from internal threats that could use application scripts to gain access to unauthorized areas of the network. For hosting services, Web OS 10.0 also incorporates switch segregation, which enables multiple customers to use a single switch configured to behave as though it were a separate physical entity for each customer.

Extending its market leadership in the SSL appliance market, Nortel Networks also announced SSL Accelerator 3.0. This appliance is designed to provide secure data traffic processing by working as an integral part of Alteon Security Cluster at the entry point of data centers. Nortel Networks leads the SSL appliance market with a 61 percent market share, according to a report issued in February by Infonetics Research, entitled SSL Acceleration Hardware 2H01.

Alteon SSL Accelerator 3.0 offloads SSL processing, including SSL handshakes, key exchanges and encryption/decryption from Web servers, increasing performance by an order of magnitude. This, in turn, allows SSL sessions to be completed much more quickly, and increases the number of Web sessions -- both secure and non-secure -- that can be managed simultaneously. In addition, SSL Accelerator 3.0 can be equipped with a module that makes it Federal Information Processing Standard (FIPS) l40-1, Level 3 compliant.

Alteon SSL Accelerator extends its industry-leading feature set with end-to-end encryption that maintains SSL all the way to the Web servers for the most secure transmissions, such as those required by customers in finance, healthcare, government and managed services. Without clear text in the data path, Alteon SSL Accelerator solves the security/performance trade-off problem of traditional SSL offload devices, while adding the ability to perform global and local load balancing, session persistence and health checking.

The scalability of SSL Accelerator is ideally suited for data centers that handle large volumes of secure traffic. A single SSL Accelerator is designed to enable between 600 and 1,000 SSL connections to be processed every second. As many to 255 SSL Accelerators can be attached to a pair of Alteon Web switches to support over 250,000 SSL connections each second. SSL Accelerator 3.0 will be generally available March 29.

Rounding out the portfolio enhancements are the latest additions to Nortel Networks Alteon Switched Firewall product family. The new SFA-AD3 and SFD-308 products, which will be available March 29, provide the same ease of deployment, manageability and scalability as the original ASF, with up to 4,000 sessions per second and 600 megabits per second of throughput.

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 Metro and Enterprise Networks, Wireless Networks and Optical Long Haul 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 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 increased provision of customer financing and commitments; stock market volatility; the entrance into an increased number of supply, turnkey, and outsourcing contracts which contain delivery, installation, and performance 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

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