Nortel
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Nortel

September 27, 2005 08:59 ET

Nortel Survey Says Hacking, Viruses Top Security Concerns for Enterprises; Enterprises Focus on Reliability, Price, Service for Security Solutions

SANTA CLARA, Calif.--(CCNMatthews - Sep 27, 2005) -

Hacking, unauthorized access, firewall breaches and intrusion prevention are the biggest concerns for enterprises evaluating network security solutions, according to a Nortel (NYSE:NT)(TSX:NT) survey.

The survey included 800 end-users from small, medium and large enterprises in six countries - the United States, Canada, England, France, Germany, and Mexico.

The survey, conducted on behalf of Nortel by Mindwave Research, indicated that 43 percent of respondents fear hacking the most, followed by viruses, worms and Trojan horses. Over the past year, 57 percent had actually experienced a virus attack.

The survey showed the small- to medium-size business segment's security concerns are more application focused. Providing virus protection for the network is also a major challenge.

"This survey emphasizes the growing need for extremely reliable, effective security solutions," said Atul Bhatnagar, vice president and general manager, Enterprise Data Networks, Nortel. "As a networking vendor for service providers and enterprises, Nortel is keenly aware of the changes impacting today's networks, particularly the unprecedented growth in wireless access and types of devices. This mobility, together with convergence, provides exciting new services on today's networks.

"To realize all of these benefits, our customers' network security posture must adapt to these changes," Bhatnagar said. "For secure, reliable networks today, Nortel recommends a 'layered defense' approach to security. This is designed to ensure there are no single points of security failure in a network and that the network is capable of adapting quickly and cost-effectively to new or changing threats."

Customers evaluating network security solutions focus on three key attributes - reliability, price and service and support. Approximately half of the respondents to the Nortel-sponsored survey said reliability is a key factor when making a security-related purchase decision.

Interoperability and network management are also important factors for companies with more than 250 employees. As well, purchasing directly from network equipment vendors was among the top choices of respondents for a preferred source of equipment with 60 percent saying they preferred to standardize on one source for security solutions.

Additionally, 55 percent of respondents currently outsource at least some network security functions. Of these, 25 percent outsource all network security solutions. In Mexico, for example, there is a greater need for managed services, as 46 percent said they outsource all network security as a managed service. Overall, 45 percent handle all network security in-house.

"The volume of viruses and other threats, combined with the focused efforts of hackers from the outside and the threat to an enterprise's intellectual property from trusted users from the inside, have created a very threatening environment for enterprises," said Chris Liebert, senior analyst, Yankee Group, an industry analyst firm. "Security can no longer just be a feature of the network or point products placed around network access points. It has to be a comprehensive strategy that encompasses a holistic view of the network. Threats are getting more sophisticated, which means security deployments need to meet that challenge."

Nortel's solutions deliver capabilities to secure computing, network, applications and end-user environments while maintaining unmatched reliability. Nortel helps governments, businesses and individuals stay ahead of threats including hacker intrusion, worms and denial of service attacks by protecting personal information and by delivering enhanced network management capabilities. Nortel has made secure connectivity available to more than 100 million users worldwide. More information on Nortel security solutions can be found at www.nortel.com/enterprisesecurity.

About Nortel

Nortel is a recognized leader in delivering communications capabilities that enhance the human experience, ignite and power global commerce, and secure and protect the world's most critical information. Serving both service provider and enterprise customers, Nortel delivers innovative technology solutions encompassing end-to-end broadband, Voice over IP, multimedia services and applications, and wireless broadband designed to help people solve the world's greatest challenges. Nortel does business in more than 150 countries. For more information, visit Nortel on the Web at www.nortel.com. For the latest Nortel news, visit www.nortel.com/news.

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 outcome of regulatory and criminal investigations and civil litigation actions related to Nortel's restatements and the impact any resulting legal judgments, settlements, penalties and expenses could have on Nortel's results of operations, financial condition and liquidity, and any related potential dilution of Nortel's common shares; the findings of Nortel's independent review and implementation of recommended remedial measures; the outcome of the independent review with respect to revenues for specific identified transactions, which review will have a particular emphasis on the underlying conduct that led to the initial recognition of these revenues; the restatement or revisions of Nortel's previously announced or filed financial results and resulting negative publicity; the existence of material weaknesses in Nortel's internal control over financial reporting and the conclusion of Nortel's management and independent auditor that Nortel's internal control over financial reporting is ineffective, which could continue to impact Nortel's ability to report its results of operations and financial condition accurately and in a timely manner; the impact of Nortel's and NNL's failure to timely file their financial statements and related periodic reports, including Nortel's inability to access its shelf registration statement filed with the United States Securities and Exchange Commission (SEC); ongoing SEC reviews, which may result in changes to Nortel's and NNL's public filings; the impact of management changes, including the termination for cause of Nortel's former CEO, CFO and Controller in April 2004; the sufficiency of Nortel's restructuring activities, including the work plan announced on August 19, 2004 as updated on September 30, 2004 and December 14, 2004, including the potential for higher actual costs to be incurred in connection with restructuring actions compared to the estimated costs of such actions;

cautious or reduced spending by Nortel's customers; increased consolidation among Nortel's customers and the loss of customers in certain markets; fluctuations in Nortel's operating results and general industry, economic and market conditions and growth rates; fluctuations in Nortel's cash flow, level of outstanding debt and current debt ratings; Nortel's monitoring of the capital markets for opportunities to improve its capital structure and financial flexibility; Nortel's ability to recruit and retain qualified employees; the use of cash collateral to support Nortel's normal course business activities; the dependence on Nortel's subsidiaries for funding; the impact of Nortel's defined benefit plans and deferred tax assets on results of operations and Nortel's cash flow; the adverse resolution of class actions, litigation in the ordinary course of business, intellectual property disputes and similar matters; Nortel's dependence on new product development and its ability to predict market demand for particular products; Nortel's ability to 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; barriers to international growth and global economic conditions, particularly in emerging markets and including interest rate and currency exchange rate fluctuations; the impact of rationalization and consolidation in the telecommunications industry; changes in regulation of the Internet; the impact of the credit risks of Nortel's customers and the impact of customer financing and commitments; stock market volatility generally and as a result of acceleration of the settlement date of Nortel's forward purchase contracts; negative developments associated with Nortel's supply contracts and contract manufacturing agreements, including as a result of using a sole supplier for a key component of certain optical networks solutions; the impact of Nortel's supply and outsourcing contracts that contain delivery and installation provisions, which, if not met, could result in the payment of substantial penalties or liquidated damages; any undetected product defects, errors or failures; and the future success of Nortel's strategic alliances.

For additional information with respect to certain of these and other factors, see the most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q filed by Nortel with the SEC. Unless otherwise required by applicable securities laws, Nortel disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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

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