Week of October 9, 2000
  Blockbuster Deal of the Week
   from Site Selection's exclusive New Plant database

A Dynamite Groundbreaking: Alteon WebSystems Blasts Open 1,000-Employee Silicon Valley Site

By JACK LYNESite Selection Executive Editor of Interactive Publishing

A groundbreaking is a groundbreaking is a groundbreaking, Gertrude Stein might've put it.

Definitely not so, though, for Alteon WebSystems (www.alteonwebsystems.com). The San Jose, Calif.-based provider of Web switches, which has adopted "Obliterating Web Wait" as its slogan, certainly obliterated the groundbreaking wait. Not for them the traditional golden spade, slowly burrowing into construction site turf.

Instead, Alteon WebSystems used dynamite - yes, we said dynamite - to literally blast a massive hole out of its new Silicon Valley site in San Jose's Santa Teresa area. Hardhat-wearing company executives, plus other employees stationed at a safer distance, witnessed the fiery ceremony in Valley Oak Technology Park.

"We've always done things in a big way, and today is no different," said Alteon WebSystems President and CEO Dominic Orr, who used a plunge detonator to do the groundbreaking honors.

196 Percent Work-Force Growth
Drives New Space Needs

The literally dynamite ceremony, however, wasn't the total hyperbole that some might suppose. The explosives-excavated acreage will soon be home to 1,000 new Alteon WebSystems' employees in four facilities spanning 600,000 sq. ft. (54,000 sq. m.). And the way things are going, the company will need every bit of that square footage - and very, very fast.

Fiscal yearend's 420 employees in June 2000, for example, represented a 196 percent annual increase in Alteon WebSystems' work force. And the recent fiscal year's sales of US$109.6 million reflected a 317 percent annual upswing.

In short, the bottom line has exploded for a firm only founded in 1996 (as Alteon Networks), when a mere four employees anonymously toiled only 200 feet (70 meters) from Alteon WebSystems' new site (within window-rattling dynamite range, so to speak).

"We began this business right here in South San Jose and found it only fitting to build our new campus right where we started," said Orr.

Nortel Deal Acquiring Alteon WebSystems
For $7.8 Billion in Common Shares

Alteon WebSystems' hyper-growth certainly impressed Nortel Networks (www.nortelnetworks.com), one of the many networking giants who've realized that sophisticated technology is imperative in handling exponentially increasing Web traffic. That's why Nortel in late July forked over $7.8 billion in common shares to acquire Alteon WebSystems.

"In the new economy, the value and richness of content across the Internet is increasing on a massive scale," Nortel Networks COO Clarence Chandran noted as Alteon and Nortel announced their July agreement. "Our acquisition of Alteon WebSystems will accelerate the delivery of an Internet data center capable of moving content seamlessly and rapidly across high-performance optical Internet and 3G wireless networks."

(When the transaction is finalized, Alteon WebSystems will become a wholly owned subsidiary of Nortel Networks. The company will continue to be headquartered in San Jose, and President and CEO Orr will become president of Nortel Networks' Content Distribution Networks business unit.)

With the acquisition, Nortel Networks now asserts that it's positioned itself as the leader in delivering high-performance Internet data centers. For Alteon WebSystems, the Nortel hookup likely means yet more gazelle-like growth.

For the moment, as the groundbreaking smoke and dust cleared, company officials announced some of the major players for its fast-track expansion.

Arctec will be the project's exterior architect, while Interior Architects will handle the interior work. Sobrato Development (www.sobrato.com) is developing Alteon WebSystems' new campus, which has a planned completion data of August 2001.

©2000 Conway Data, Inc. All rights reserved. Data is from many sources and is not warranted to be accurate or current.