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Arizona ASP Buys Big to Build Out

Nortel Networks, Inc. Tuesday struck a $300 million deal with application service provider ClearData Communications, Inc.

ClearData plans to construct a series of Internet data centers and a nationwide optical network based on Nortel Network's fiber optic systems.

The deal validates Nortel Networks' intentions to be a formidable player as an essential equipment supplier to the ASP market.

In December, Nortel Networks laid out its strategy for entering ASP space, which analysts project will be worth $20 billion in annual revenue by 2003.

David G. Jemmett, ClearData chief executive officer, said Nortel Networks is determined to let the industry know that it "gets it," and can deliver the goods to buildout ASP-intense optical networks.

"Nortel Networks understands our business and where the market is headed," Jemmett said. "As a premier vendor of true end-to-end solutions, Nortel Networks combines the latest in data center infrastructure, management and design resources with industry-leading optical backbone solutions."

Jemmett added that Nortel Network's end-to-end capability gives ClearData a significant time-to-market advantage, which would allow it to rapidly provide customers with advanced data networking and hosting services.

Rich Caruso, Nortel Networks president of ASP services, said winning the ClearData contract showcases the firms ability integrate Internet data center buildouts with its high-performance optical Internet capabilities.

"We're pleased that ClearData selected us as their end-to-end solution integrator," Caruso said, "and we look forward to close collaboration as we enable ClearData's aggressive service plans."

This is not the first ASP Nortel Networks is facilitating. Earlier this year, Nortel announced that is had secured a deal with German ASP EINSTEINet to help build the infrastructure behind the country's first application outsourcing firm.

ClearData has signed a three-year contract with Nortel Networks to purchase a premier package of fiber optic services. The deal allows ClearData to leverage Nortel Network's metropolitan, long haul optical, and data networking solutions, software and support.

It is aggressively building a national broadband network that it touts as the "next generation data superhighway." ClearData's backbone is based on an OC-192 capable dense wave-division multiplexing Internet protocol designed to optimize its core optical network. The glass-based network is capable of delivering scalable, fault-tolerant performance on a minute-by-minute basis.

Headquartered in Phoenix, ClearData intends to utilize the high-speed network to offer a suite of Internet access, data transport, hosting and application services to customers nationwide.

While Nortel Networks will fuel the delivery of the ASP's services, Compaq Computer Corp. hardware is at the heart of ClearData's network architecture.

The ASP secured a strategic relationship with Compaq in May to the tune of a $25 million commitment from the computer maker to anchor ClearData's data center buildout in the U.S.