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November 27, 2001

IBM Deploys Virtual Private Network Solution from Nortel Networks

Contivity VPN Extends Secure Remote Access for Independent Software Vendors

SANTA CLARA, Calif. – Nortel Networks* [NYSE/TSE: NT] announced that IBM has deployed Nortel Networks Contivity* Virtual Private Network (VPN) Switch to provide secure extranet access for members of IBM PartnerWorld for Developers. Contivity VPN extends the reach of IBM Solution Partnership Centers (SPCs) by enabling secure connections from individual developer sites.

In a related announcement also made today, Nortel Networks unveiled an innovative security solution and an alliance program designed to boost network security.

“Since we have a large and geographically dispersed network of third-party software developers, we must have technology that enables these developers to remotely access test environments with the confidence that all transmissions are secure,” said Todd Chase, program director, IBM Solution Partnership Centers, IBM. “Nortel Networks Contivity VPN solution expands the radius of our SPC labs, and enables our customers to securely connect and test their applications from their own sites.”

Nortel Networks Contivity VPN Switch provides encryption for data communications between software developers and IBM SPCs, enabling developers to access both traditional terminal and graphical user interface applications. In addition, developers can realize significant cost savings and accelerated time-to-market for their products by eliminating the need for multiple visits to SPCs. The SPC extranet also significantly expands the number of development and test environments available to the member community.

“In today’s climate, network security is viewed by our customers as extremely significant, and any disruption to these capabilities can dramatically impact productivity and, ultimately, the bottom line,” said, Scott McFeely, vice president and general manager, Intelligent Internet, Nortel Networks. “IBM is addressing these issues by leveraging Contivity to deliver around the clock, reliable, remote access to its labs.”

Contivity VPN is a single hardware device that provides routing, firewall, bandwidth management, encryption, authentication and data integrity features for secure tunneling across managed IP networks and the Internet. With Contivity VPN, customers can connect remote users, branch offices and suppliers with the cost and performance advantages of shared IP networks and the security and control expected from private networks. Nortel Networks is the market share leader in the global independent VPN market, according to a Cahners In-Stat report for the first half of 2001.

IBM SPC resources are available exclusively to members of PartnerWorld for Developers, the developer resource for IBM Business Partners. It offers developers the industry’s richest, deepest technical and marketing support resources available. PartnerWorld for Developers can help Business Partners reach broader business opportunities, lower development costs and get products to market faster. For more information, or to join, visit www.developer.ibm.com.

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 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.

*Nortel Networks, Contivity, the Nortel Networks logo and the Globemark are trademarks of Nortel Networks.

Contact for Press and Analysts:

Bridget Braxton
Nortel Networks
972-685-8813
bbraxton@nortel.com

Giorgia Casnedi
Nortel Networks
44 1628 433 117
casnedi@nortel.com