> A VIEW TO THE FUTURE

HyperconnectivityandConvergence 2.0

Transformations in networking, communications, and applications….and work, play, business, and society

Phil EdholmJune 2007

Hyperconnectivity

Anything that can be connected and would benefit from being connected will be connected

Hyperconnectivity is Realand Happening Now

• By 2010, worldwide:

• 4-fold growth in Internet Commerce to 100B transactions

• 1-2 billion A-GPS-enabled handsets

Person to Machine

• Europe – mobile phones now outnumber people (103% penetration)

• Global mobile IM grew 33% 2H06

Person to Person

• iPhone available in June; hyper-connectivity at applications level

• 98% of all CPUs today are embedded (by 2010 – 14 billion connected, embedded devices)

• 70%+ of all 2007 cars in U.S. have iPOD connectivity

Machine to Machine

• Sensor pocket in Nike shoes

• 100 million iPODs sold (market to double 2005 – 2010)

• One Laptop Per Child

Addressing the Challenge and Opportunity of Hyperconnectivity

Hyperconnectivity

“True” Broadband

Communications-Enabled

Applications

Pillars of Hyperconnectivity

Web n.0 – Critical Mass

2000 2005 2010 2015

Web presence

Dot coms

Portals

Socialising/dating

Customer-based value

MASH SITES

Personal sites & blogs

SEMANTIC WEB

CriticalMassZone

ON-LINEGAMES

Virtualenvironments

Per User Bandwidth Needs

1 Mb

1 Gb

1980 1985 1990 1995 2000 2005 2010 2015

Graphics

MP3

Video

Application Traffic Changes

Moore’sLaw

Metcalfe2

Text

Eco

no

mic

B

and

wid

th(E

xpo

nen

tial

Sca

le)

Time

Edholm’s Law of Bandwidth

Bandwidth is increasing in all areas in a relatively proportional exponential growth

Bit

s p

er s

eco

nd

Million

Billion

Thousand

2.94 Mb/sEthernet WIRELINE

NOMADIC/WIRELESS

MOBILE WIRELESS

10 Mb/sEthernet

100 Mb/sEthernet

1 GbE

802 .11a/g

802.11b

MIMO

UMTS

Ricochetradio modem

56 Kb/s modem

28.8 Kb/s modem

56 Kb/s modem

First alphanumeric pagerWide-area paging

110-b/s Hayesmodem

9600>b/s modem

1976 1984 1992 2000 2008

802 .11n

10 GbE

Edholm’s Law of Bandwidth

Eco

no

mic

B

and

wid

th(E

xpo

nen

tial

Sca

le)

Time

Applications have relatively fixed requirements based on human I/O and devices

Bit

s p

er s

eco

nd

Million

Billion

Thousand

2.94 Mb/sEthernet WIRELINE

NOMADIC WIRELESS

MOBILE WIRELESS

10 Mb/sEthernet

100 Mb/sEthernet

1 GbE

802 .11a/g

802.11b

MIMO

UMTS

Ricochetradio modem

56 Kb/s modem

28.8 Kb/s modem

56 Kb/s modem

First alphanumeric pagerWide-area paging

110-b/s Hayesmodem

9600>b/s modem

1976 1984 1992 2000 2008

802 .11n

10 GbE

MessagingVoice

Visualization

Streaming

TBD

Web Pages

Million

Billion

Thousand

2.94 Mb/sEthernet WIRELINE

NOMADIC WIRELESS

MOBILE WIRELESS

10 Mb/sEthernet

100 Mb/sEthernet

1 GbE

802 .11a/g

802.11b

MIMO

UMTS

Ricochetradio modem

56 Kb/s modem

28.8 Kb/s modem

56 Kb/s modem

First alphanumeric pagerWide-area paging

110-b/s Hayesmodem

9600>b/s modem

1976 1984 1992 2000 2008

802 .11n

10 GbE

Edholm’s Law of Bandwidth

Eco

no

mic

B

and

wid

th(E

xpo

nen

tial

Sca

le)

Time

As applications move from Wireline to Nomadic to Mobile, their utility and value increase along with deployment volume

Bit

s p

er s

eco

nd

MessagingVoice

Visualization

Streaming

TBD

Web Pages

Societal Impact

Technology helps people to do more, interact more, have more fun, be more, and feel better about

themselves

HUMAN NATURETechnology progress

All technology barriers are being eroded rapidly

Socio-political instability -continuous social change

Physiological

Safety / security

Social

Esteem

Self-actualisation

Living with Virtuality

Cyberspace

Human world

Geographic world

Companies that embrace innovation and scale will capture the opportunity of Hyperconnectivity

Hyperconnectivity: Opportunity & Challenge

>Opportunity

> Increased productivity

>Better communications experience

>A more connected world (societal good)

>Challenge

>Scale is unprecedented

>Today’s networks not designed for Hyperconnectivity

>New technology required to transform much of IT and Telecom

Leapfrogging to Next Generation

13

Nortel’s Strategic

Imperatives

IndustryStatus Quo

Unified Communications

(Enabling, Transparent)

Carrier Ethernet/PBT(Scalable, Simple,Inexpensive)

4G(True Broadband)

2G/3G2G/3G

Good for voiceAdequate for dataBad for video

MPLSMPLSFine when usedin moderation

LegacyVoIP

LegacyVoIP

One dimensional

75% CAGR(07-09)

37% CAGR(07-09)

26% CAGR(07-09)

GlobalMarket

ApplicationConvergenceApplicationConvergence

Enterprise Convergence 2.0

CommunicationsConvergenceCommunicationsConvergence

NetworkConvergenceNetworkConvergence

> Virtualization> Reach> Cost

> Collaboration> User Velocity> Productivity

> Growth> Business Velocity> Strategic Advantage

DeliveringUnified

Communications

Business

Infrastructure

>Synergy matters because today’s challenges are multi-dimensional

• Multimodal phones

• Fixed-mobile convergence

• Real-time communications handoff

• True Presence

• Extension of Enterprise application to mobile devices

• Carrier-grade enterprise mobility

Nortel Synergistic Strategy

Carrier Enterprise

Wired

Wireless

Applications

Infrastructure

“Business Made Simple”

Services