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Nortel makes business-to-business push

The phone equipment maker launches a new e-business applications unit built from past acquisitions, part of its move into the fast growing business-to-business e-commerce market.

Nortel Networks today launched a new e-business applications unit built from past acquisitions, part of its move into the fast growing business-to-business e-commerce market.

The networking equipment giant finalized its acquisition of customer relationship management (CRM) software maker Clarify earlier this month. Nortel's new division, Clarify eBusiness Applications Unit, will focus on providing e-commerce applications and services that enable companies to manage customer data online and build trading exchanges linking them to their partners and suppliers over the Internet. Clarify's software products allow a customer service agent, for example, to examine sales and service information online.

Nortel's new unit is focusing on two fast-growing market segments: business-to-business e-commerce and CRM software.

Leading research firms have projected the business-to-business market to grow to between $2.7 trillion and $7.3 trillion by 2004, from about $131 billion last year. CRM software, a market led by Siebel Systems, has garnered attention from all the big software makers, including Oracle, SAP and PeopleSoft. The market is expected to reach $11 billion by 2003 from $1.9 billion in 1998, according to research firm International Data Corp.

In recent weeks, competition has heightened in the e-commerce world as more and more businesses begin to move their supply chains online in an effort to reduce internal purchasing costs. A wide range of companies, including IBM, Yahoo, eBay and Alta Vista, have joined the business-to-business scramble.

Nortel's new unit is a combination of several resources: its own Internet and contact center capabilities; Clarify's customer relationship software; and its August 1999 acquisition of Periphonics, a maker of customer self-service software. Nortel said the new division has also inked a partnership with Big Five consulting firm Andersen Consulting to help companies implement the new products.

The first set of products from the new unit will include Nortel's wireless service, which will give companies access to customer and inventory information and other business applications from a handheld device. It will also include Clarify's full suite of front office software combined with Nortel's Web response servers and contact centers, as well as connection and Internet security management.

Based in San Jose, Calif., the new division said it has about 2,600 employees and serves customers such as Best Buy, Charles Schwab, General Electric, H&R Block and Qwest Communications International. Nortel said it plans to release a series of partnerships, new products and customers supporting its new strategy throughout the year.