Second time lucky

So Northern Telecom (Nortel) went and bought Bay Networks after all, did it?

Apparently, all that was needed was a little more money to sweeten the pot. Bay had reportedly turned down an offer of between $US32 to $US35 per share from Nortel.

Not one to be discouraged, Nortel took a little time to think -- and assess its financial wherewithal -- and came up with a better offer of slightly more than $US38 per share. That was enough to reel Bay in.

Although, to hear David House, Bay's chairman, CEO and president, talk about the negotiations between the two companies, it was a complete lovefest that led to the merger.

"We found we had to control our enthusiasm. It was almost a Woodstock-type experience," House is reported to have said about the pre-acquisition discussions.

A Woodstock-type experience? Haggling over one or two billion dollars? We don't think so. This acquisition, like any other, is about money. Pure and simple. And House has proved that any company is up for sale, if the price is right -- and circumstances necessitate it.

When he took over as Bay's top exec in October 1996, House said he would not sell the company. So what changed his mind?

"Business changes very quickly, particularly when you're living in the Internet," he said during a teleconference to announce the Nortel-Bay deal. "In the year and half I've been here, it's been like a decade in dog years or Internet years."

During that time, Bay rival Cisco Systems has managed to capitalise on the IP boom in both the enterprise and service provider markets. In order to compete in the end-to-end IP network market, Bay found it needed to find a telecom partner -- and fast.

It was looking as though that partner was going to be Lucent Technologies, but due to US regulations that stem from the company's October 1995 spin-off from AT&T, Lucent is essentially unable to make any major purchases until October of this year. That left the door open for Nortel to step in -- and step out with Bay, as it were.

What does all this mean for users? Well, if you're a Bay or Nortel customer, you now know who you're expected to go to for the other half of your data/voice networking gear in future.

If you use both Bay and Nortel equipment, you're sitting pretty. You should have one point of contact for all your network product complaints from hereon in.

If you are currently a Cisco user but are looking for an alternative supplier, you've probably found it in this match.

And finally, if you're a Cabletron/Digital, 3Com, Newbridge or Lucent customer ... wait for it. Your vendor is bound to get bigger (and better?) any month soon.

Join the newsletter!


Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.
Show Comments

Cool Tech

Toys for Boys

Family Friendly

Stocking Stuffer

SmartLens - Clip on Phone Camera Lens Set of 3

Learn more >

Christmas Gift Guide

Click for more ›

Brand Post

Most Popular Reviews

Latest Articles


PCW Evaluation Team

Aysha Strobbe

Microsoft Office 365/HP Spectre x360

Microsoft Office continues to make a student’s life that little bit easier by offering reliable, easy to use, time-saving functionality, while continuing to develop new features that further enhance what is already a formidable collection of applications

Michael Hargreaves

Microsoft Office 365/Dell XPS 15 2-in-1

I’d recommend a Dell XPS 15 2-in-1 and the new Windows 10 to anyone who needs to get serious work done (before you kick back on your couch with your favourite Netflix show.)

Maryellen Rose George

Brother PT-P750W

It’s useful for office tasks as well as pragmatic labelling of equipment and storage – just don’t get too excited and label everything in sight!

Cathy Giles

Brother MFC-L8900CDW

The Brother MFC-L8900CDW is an absolute stand out. I struggle to fault it.

Luke Hill


I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?