Despite current issues about accounting and finances, Canadian network giant Nortel Networks is keeping optimistic about its future.

The company's Chief Technology Officer Brian McFadden, who has worked at the networking equipment provider for 25 years, spoke this week about the coming technologies in networking for 2005 - and about Nortel's role in them. In his conversation with Computerworld senior writer Matt Hamblen, McFadden predicted that wireless technology will be a newsmaker and said innovative consumer products could quickly find their way into the corporate world.

What will be the hot technologies Nortel cares about in 2005?
I've got a list of several things, but wireless will be the big news this year. The No. 1 technology that will impact enterprises in 2005 is broadband wireless, including 3G network services using 1xEvDO (Evolution Data Only), UMTS (Universal Mobile Telecommunications System) and (Global System for Mobile Communications) footprints. We're going to see a lot more capability coming out of wireless, rather than just text messaging -- including multimedia over traditional carrier networks. A lot of services in wireless run at less than 1 Mbit/s, so the content will evolve to match the infrastructure. For example, they already have two-minute soap operas for train riders using cell phones in Japan. It's serialised content and has nothing to do with TV.

Imagine that, the wireless soap opera plots are better than broadcast TV?
Well, the attitude by carriers is whatever gets people to watch.

What else is coming?
The second main technology is VoIP (voice over Internet Protocol) for enterprises as well as carriers, although VoIP is a misnomer, and it should be called multimedia over IP. There will be more marrying ... of SIP protocols [Nortel is big on SIP - Session Initiation Protocol - recently adding it to its products. Read Nortel's White Paper on SIP].

Third, Ethernet will continue to make inroads in the WAN. Ethernet will become protocol of choice for these new Internet Protocol networks. Sonet, ATM (Asynchronous Transfer Mode) and frame relay will still be complementary, but for the first time, the world will be on the same kind of protocol for the WAN, and this will allow the collapse of networks. The enablers are now in place to really drive the converged broadband infrastructure and network simplification and to really take the cost out of the network. Simplification of networks is really important to get to the next level of "anywhere, anytime, anything".

Security has to fit in here somewhere.
The next point is that security will move from being added onto networks as an afterthought into where security is embedded into infrastructure to complement antivirus and antispam and to start to make networks more security-aware. Security will go right into software and hardware architectures, and you'll see that rolled out at a network-element level and application level.

Networks will have the ability to isolate a problem rather than shut down, just the same way you wouldn't shut down the whole road system because of a jam on one route.

Another technology that will be important in 2005 is Linux in networks. It is now carrier-grade and picking up momentum. It is real, and it will continue to integrate in enterprise and carrier products. It will be in routers and more than a PC desktop OS alternative.

Some experts say Linux is an inherently better operating system for high-performance computing situations. Why is Linux getting into networks?With open-source software, one of the advantages is that there are many, many people working on it, and when problems arise, a lot of brainpower can be applied - and that includes performance and security issues. So now I think enough large organisations are behind Linux, including Nortel and IBM and others, that this is getting to a point that it's an OS you can depend upon as opposed to being a curiosity and only for a single user.

Off-the-shelf, open-source software and hardware in different areas is starting to become used in mainstream enterprise and carrier networks. We have some Linux implementations. Nortel has a carrier-grade Linux program and is working very closely with the Linux community.

A lot of what you predict depends on consumer behaviour, as opposed to corporate moves. What's going on in the market?What vendors have today is a real opportunity to drive technologies down into the small and medium-size business market, which will drive simplicity. And that simplicity will allow enterprises to lower costs to their community. In fact, the real driver in a lot of these technologies is the consumer. Now we see processors for games, HDTV and end-user devices in entertainment - all driven by consumer entertainment companies.

Yes, the whole market is turned on its head. We used to see innovation in enterprises, and that drove out into the consumer market, things like voice mail and call forwarding and call answering, all implemented on the PBX (private branch exchange). But going forward, we will see consumer innovations drive into the enterprise. Video might be one. Because of convergence in networks, enterprises won't have to build mission-critical applications, but (they) can build applications that will ride atop the network being innovated for consumers.

What needs to have to happen for some of these predictions to come about, wireless for example?
The No. 1 thing needed for wireless is handset capability at a certain price point to enable broadband services. Another thing is people have to trust networks from a security and privacy point of view. I'm talking IP networks now. Obviously, I think we can make them secure, but it requires a lot of focus. For example, Nortel's partnership with Symantec is coming into position, which is marrying best-in-class networking with antivirus and antispam products. All these points about future technologies are related to where Nortel is investing.

And is Nortel still investing in research and development staff, despite all the accounting reviews?
Yes, R&D is 20 percent of revenue, which is at the high end of most companies. About a third of our population is involved in R&D, with more than 10,000 people around the world. Ottawa is our largest research facility. Our commitment to R&D is strong as ever. The reviews are not impacting our ability to innovate. We're making investments and carrying on business transparent to that.

How is Nortel faring compared with its competition on innovation?
In terms of competition and Nortel's depth or breadth of innovation - including optical and our ability to bring services and service infrastructures to the table - we don't believe that anyone has the capability that we have.