What’s Nortel?

By Mark Evans | Published: February 16, 2007

Here’s a concept that I’ve been trying to get my head around recently: what’s Nortel all about these days? Before anyone goes “huh?”, what I mean is what’s Nortel raison d’etre? When you think of Nortel, you think of what? For example, Ericsson is all about wireless communications; Cisco is about routers, switches and, increasingly, home networking equipment; Nokia and Motorola are about handsets. So what’s Nortel about these days? Is it VoIP? Is it IP-TV? Is it Wi-Max? Is it CDMA? Is it enterprise? Is Nortel still trying to be all things to all people?

I’m sure Nortel CEO Mike Zafirovski has a clear idea about how he wants to position the company within the telecom landscape but even after 18 months at the helm, Nortel still lacks identity. “We are Nortel, we’re good at xxxx!” I wonder if this is an issue for customers, particularly customers looking for to buy next-generation equipment such as Wi-Max or IP-TV? If anyone provide a definitive definition of the new Nortel, bring it on.

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  • an easy answer

    Nortel has been talking about this for months. You may wish to review the published materials from their Investor’s Conference.

    Nortel is about convergence across both Carrier and Enterprise. It enables your selected and personalized applications to be delivered to the device of your choice anywhere you are.

  • br

    You are asking a question that is not valid at this point of time due to restructuring within Nortel. Nortel is not yet fully dominant in specific sector, but Nortel is dominant in many sectors depending which global region and what type of business you are looking at.

    Like person mentioned above, and as reader of this blog, you might be able to notice that Nortel is positioning to become Unified communication company. It’s not anymore about how each individual company competes against each other, now it’s time to bring converegence of all sectors into one to improve small and large business for customer. It’s like taking your vehicle to mechanic that is able to fix most of cars, most of trucks, but not buses, ships, or motorcycles. That’s how I see Nortel.

  • oneof34kleft

    Who knows, I can speak for myself and a few other employees that we have no idea. We used to make products, develope software, invent new technologies.. Now we support products buildt by others, use bad software developed abroad, and when was that last patent granted to Nortel? Since mike z came onborad we in the trenches have never been granted a glimps at the vision of the future nortel. like cisco, like ibm, Nortel doesn’t have the mind set to be as good.
    On to the head count triming (layoffs). This would be great if middle management we the only ones cut. Nortel is Far too fat in the middle when some managers don’t even have employees to manage.

  • OBSERVER

    Trying to be everything to everyone will expensively become nothing to no one. They lead no where as they lose margins and marketshare everywhere.

    Everyone else merges to form a smaller market with greater competition, out look is dire, and this craze in the CEO’s turnaround story is just that yet again, another crazy story.

    So what do they have? Software for Lotus or Microsoft, how much does that make?

    CDMA accounts for 80 to 90 % of their gross profits and is their highest margin business, but margins are set to take a substantial hit by 2008

    Wireless accounts for over half their business and it too is tanking.

    They bought PEC to venture out into a different arena which was bought for $448M and maybe sold for $200M

    Tasman was overpaid

    They spent $20B in the bubble so they don’t have a great track record in acquisitions and lack resources to buy anything as others merge or acquire.

    BSNL was to get their foot in the door when they really shot themselves in the foot.

    There is no Putian or Huawei partnership, as they said, Neptune got scapped, and they sold UMTS like their manufacturing.

    What are they working on? IPTV? WiMAx? MSFT VoIP for MSFT’s server sales? None generate the cash they desperately need. Certainly not in the immediate or questionable future.

    Nortel is the only one without a consumer product.

    Getting into IPTV as Cisco buys Sci.Atlanta, we see how their WiMax aspirations are shunned by Sprint as others lead, MSFT billion dollar server sales are as entertaining as their proverbial cuts and asset sales, the future is looking so dim one needs infra-red glasses.

    So what does Nortel really do? Does anyone know? Do they with unreliable numbers to plan or assess what is doing what short of maintaining a high cost structure and management pay practices?

    What do they have as they drop business and trip over their feet to get into anything else?

    What do they have? Nothing. A huge unproductive R&D, declining core business, nightmare outlook, and plenty of big business might to salvage this once high tech giant from 3 times its size out of endless squeezes as they hype the future, cuts, with unreliable numbers wrestling finances with higher interest headed to zero in a hand basket with so much dispassionate commentary on their more true state of affairs as events traditionally unfold.

  • The psychiatrist

    give it a rest observer aka jamezzz aka proto

    you can change your id but your writing style tells it all

    next time don’t foolishly gamble all of your grandpa’s inhereted money on Nortel option!

  • lasbeckis

    It’s clear that Nortel is exiting those Business not needed by Microsoft before to be bought by the PC KING

  • Spotticus

    oneof34kleft, either you are not being honest about working at Nortel, or you just haven’t been paying attention about what’s going on. Honestly the executive has been communicating the direction that the company is moving in and the key innovation areas.

    The concept is that Networks are converging. The lines between what is enterprise and what is carrier is fading (How do I manage a dual mode UMTS/WiFI phone when I handoff between a carrier and enterprise network). How do you build applications that are network aware. How do you enable true mobile broadband. While Nortel can’t be good at everything, we are making focussed investments in key technologies that the converged world will need, and bring our considerable expertise and experience in each of these worlds to provide the services that carriers and enterprises are going to need.

    If you want to know areas where Nortel is world leading, look no further than MIMO and OFDM in the wireless space (The foundation of WiMax and likely LTE and UMB), ECO in the Optical space, Carrier grade ethernet switching.

    oneof34kleft, get in the game or move on.

  • AnotherOf34K

    Have a look at Nortel’s PBT product.

    Carrier-grade Ethernet that’s going to form most of one of the 3 layers of BT’s 21CN in place of Cisco’s MPLS which simply does not scale beyond a few nodes.

    The other big telcos are starting to follow BT’s lead so there’s a very nice amount of new kit to supply plus there’s loads of existing infrastructure to upgrade and retrofit. Should be fairly healthy for the bottom line…

  • OBSERVER

    What a wonderful contribution you always provide. If there was anything in the post you disagree with say so.

    Why are you such an unethical Nortel cheerleader stalking exponentially more civil, proven critics, and calling everyone jamez.

    Constant personal attacks with such an unethical low class / low IQ makes your Nortel’s multi-ID cheerleading this laughing stock’s the best basher all the way down over the last 3 years.

    You should be held libel for so much of your public commentary proving criminals are stupid. I hope some one tracks you down and exposes you in a court of law.

  • Leave a Reply

    Mark, let me ask you this. What would you say Alcatel-Lucent are good at? They have fingers in more pies than Nortel (UMTS, Wimax, Optical, MPLS routers, IP PBXs etc) yet they’re still successful.

    Does Nortel need to be “good” at something to become successful again?

  • http://nortel.wordpress.com/ Mark Evans

    Excellent point. It is interesting that Alcatel/Lucent is seen as being in better shape than Nortel. Of course, Alcatel has been making major strategic acquisitions in recent years, while Nortel has been grappling with accounting scandals and senior management changes.

  • Casual Observer

    I think you could effectively argue that Nortel has been a jack of many trades and master of none. This is clear from Mike Z’s latest interview in Ottowa about various groups in Nortel asking for funding despite having no credible business plan. Mike Z said “wrong answer” to these folks and said there would be no more skunkworks projects funded. The issue of Nortel’s core competence is one in transition but I would argue it is in helping customer’s understand their current and potential network problems from end to end in both the carrier and enteprise spaces in order to bring end users quality of experience. Nortel has narrowed their areas of focus under Mike Z with more concentrated R&D investment (WiMAX, IMS, IPTV) in a few key areas. This will go a long way towards defining what Nortel becomes in the future.

  • The psychiatrist

    Alcatel/Lucent are not really viewed as being in better shape than Nortel,one of the key telling numbers are its p/s price to sales ratio which is now only slightly higher than that of Nortel’s.

    This implies that the market does not view Alcatel as a growth story, at least not organically,this would support why they they have chosen to merge with Lucent who was also viewed as anything but a growth story.

    These two gear makers together will try to make it a growth story in 3G wireless or at least achieve better scale.

    I will put my money on Nortel at this point as they are now equipped with a leader who has since shown some focused direction and drive to be a major player in areas where the next wireless evolution will take them, as AlcaLucent sruggles to gain economic and culturalistic scale in an ever changing telecom landscape.

  • another casual observer

    As an ex-Nortel/BNR employee, who has some ongoing inside connections with both Nortel and Alcatel, I can tell you that Another0f34k is right on the money. Nortel (aka BNR) used to be a culture of excellence and market-driven innovation. Roth’s obsessive pursuit of acquisitions led to an environment of dissatisfaction within the BNR community and directly resulted in the exodus of the very visionaries and “movers and shakers” that drove the company forward. All that’s left in the Ottawa operation is a culture of mediocrity and incompetence, lack of meaningful leadership and whole swathe people just waiting to reach their magic retirement numbers. It would take a miracle to turn Nortel round and Mike Z. doesn’t have it.

  • another casual observer

    sorry, I meant “oneof34kleft”

  • Anonymous

    Nortel Inside.

    Wish that some of the half glass empty doodlers leave and go elsewhere. If you hate it here then get out or if you are competent under incomeptent managers, then get them out. Find ‘em a job at Cisco or ALU so they mess things up there.

  • Leave a Reply

    Good point anonymous….I don’t understand these disgruntled Nortel employees bleating about how bad their job and company is.

    If you don’t like it, leave it.

  • Pingback: John Roese’s Blog » Blog Archive » Why will Nortel win?

  • Nortel new grad

    I am young and probably naive. With that said, it is looks to me that Nortel will re-emerge in the next five years. We have expertise in the technologies we are focusing on which are the same technologies that will shape the future networks of the world, particularly in emerging markets below the equator. Partnerships are being made with name brand companies like Microsoft and IBM. Whether or not those partnerships will produce results on the bottom line remains to be seen, but I would imagine that the main goal behind dealing with those companies is to rebuild our image more than anything, a marketing ploy if you will. Like I said, I am a newb but my immediate management is quite intelligent and competent with priorities in the right places and if the rest of the majority of the rest of the corporation has similar leadership in place then Nortel will be back.

    Finally I would venture to say that Nortel has too much history and is too important in it’s homeland of Canada for the government there to allow it to just fade away. Much like GM or GE in the US, Nortel will not be allowed to fail.

    For the one poster on the various boards constantly running Nortel down, your agenda is so transparent it is pathetic. I am sorry you lost your nest egg when Nortel’s stock tanked but it’s time to let it go and move on. And you really ought to get some help for your drinking problem or whatever it is you are involved in because while you obviously attempt to put a lot of big words and perhaps some thought into your post

  • Nortel new grad

    posts, you just come off as a total bafoon and expose yourself quickly everytime. Your obsession with disparaging Nortel is really quite sad.

  • OneofFormer100K

    As a Nortel “Alumnae”, I watched the company carefully over the last five years especially since I have traded the stock to get back close to my pre-bust kitty. I believe management is headed in the right direction technically. Nortel has always had great technology though…we lacked the marketing mind-share though.

    It was always safe for the customer to buy Cisco. Cisco has never been carrier-grade and voice/video traffic that is more time-sensitive that is going to change. Nortel has always tried to push five 9 reliability in the network and this will be there calling card in the new ubiquitous internet.

    Nortel just needs to show some financial stability…which I believe is more perceived because Nortel is not going anywhere like someone previously stated. It will either be purchased by a Private Equity group or merge with a company like Motorola or even Microsoft (most hardware would be sold off and we would probably look at selling the software across several manufacturers like Mr.Softees current model).

  • many

    I have mostly made money shorting nortel :)

    I have to say to the new grad, good luck there fella. I hope nortels vision/strategy can filter down to the people charged with implementing it. I have my doubts though. Watch for signs of the management going their own way, and hidden headcount.

    I do not detect that there is any vision or direction in the middle upper management and that it is still a bunch of fiefdoms.

  • Spider

    Is network communications not specific enough? That entails a broad-base of hardware and software products, delivery systems, services and solutions, as the market dictates. I don’t think Nortel or any other company should waste its time painting itself into a niche product corner by narrowly branding itself, especially given the fluidity of the technology market and disruptive technologies that must be exploited quickly to gain market share when they appear. If you don’t have a footprint in that technology when it takes off, you will be left at the sidelines.

  • many

    Spider,

    You need to have deep pockets to play in all of the areas of networking. No one is suggesting that Nortel be a niche player, but they are a mile wide and an inch deep. Their enterprise business is getting squeezed by Cisco and Avaya on the to end and little players like Asterisk on the low end. They are hemorrhaging customers. The Microsoft partnership is not exclusive and likely won’t help anytime soon

    Core routers business is getting killed by Cisco, Juniper and Tellabs

    Core switching and optical; Fujitsu, Cisco, Tellabs, Ciena.

    Wireless…….. well, nuff said there.

    Nextgen Callserver and IMS seems to be a potential strength, but Session Border Controllers are nibbling at their IMS business too.

    I don’t think they can afford to play in all the different areas successfully, and have not for_a_long_time.

  • http://yahoo.com Bill Compton

    Hi Jim. Photos i received. Thanks

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