Who will you call when it comes to building your customer's Internet infrastructure? Cisco Systems, of course. But when it comes to Internet networking and building the Internet Protocol backbone, Nortel Networks, which still relies heavily on its telecommunications roots, appears frequently in Lucent Technologies' and Cisco's rear-view mirrors. Charles Childers, chief marketing officer at Nortel, sees this as a challenge. He said: 'Nortel's approach is looking at the infrastructure to the appliance, in providing the end-to-end. This is an approach we've found that many enterprises like. We are not box pushers.' That is certainly not giving Cisco enough credit. With a string of acquisitions to boost its voice products and a healthy share price that gives it a market value greater than Microsoft, Cisco is not just the networking equipment maker it was in 1996. Mr Childers said: 'Cisco's approach is from the appliance. It has some backbone but certainly not the range we have. It's too narrow and they don't have the total picture. Our customers are telling us that what's driving them to us is our end-to-end solution.' When it came to measuring competition, Nortel regarded Lucent, which shares its background in voice technology, as a more potent rival than Cisco, he said. 'In terms of complex networks, it's valuable to have skill, resource and a network approach rather than an appliance approach.' Mr Childers cited the company's recent buys - optical switch maker Xros in a stock deal worth US$3.25 billion and Qtera Ultra technology - as giving Nortel more strategic oomph to push past Lucent and Cisco in delivering an all-optical network. 'Nortel plans to combine its Qtera Ultra technology with Xros' silicon-based micro-mirror technology to deliver an all-optical network. Xros switches were designed to operate at 10 gigabits per second [Gbps], which is the standard, but it will very soon deliver future optical speeds of 40Gbps and 80Gbps. 'The world is looking for more bandwidth and optical will give them the solution they want, which is one pipe delivering voice, data and video,' he said. The optical systems move the bits, but the more important strategic manipulation of those bits takes place a few layers above that, and that area is not a Nortel strength. According to market research group International Data Corp, data traffic is exceeding voice traffic already in the United States. The same scenario is forecast to happen in the next two years in Asia. Mr Childers' telecoms bias was evident when he discussed the company's growth markets: optical, wireless and ATM (asynchronous transfer mode). He said out of the US$3 billion spent annually on research and development, 90 per cent went into IP-related products. 'IP is the cornerstone of our strategy. We are giving customers high-speed Internet with optical. We are pushing IP technology to drive wireless Internet,' he said. Recently, the company introduced Open IP technology, a suite of Nortel software that uses many devices throughout a network to deal with the packet-handling now mostly done either at the edge of networks or their core. Nortel claimed doing packet-handling locally was more cost-effective than passing the packets to a dedicated device, such as a router, to send them to their destinations. 'Are we taking that mindshare away from Cisco? Absolutely. Open IP is a new way of routing that's less costly,' Mr Childers said. While Cisco and Lucent have significant resources in the Asia-Pacific, Nortel is still seen as a North American-centric company. 'That's an out-of-date perception. Our direction is clearly to be more global and we are making good on that direction,' he said. Besides, unlike Cisco and Lucent which break down their business according to geographies, Nortel still segments its worldwide business into two parts - North America and international. 'Nortel's international business makes up 38 per cent of our total business, which is a pretty healthy percentage,' Mr Childers said.