A Look Back at the Good Times

By Mark Evans | Published: January 22, 2009

Remember when Nortel was rocking and rolling with sales surging and the stock climbing on a daily basis?

If case you forgot here’s a video from 1999 featuring an extremely bullish CEO John Roth. One of the highlights is Roth describing the $10-billion acquisition of Bay Networks as a “bargain”. As well, Roth talks about how Nortel needs become more of a data player and emulate rivals such as Cisco.


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  • felixmk

    You should have posted this after lunch, now my stomach is upset.

  • joremero

    as said before, instead of wasting cash in “bargains”, NT should have payed off debts and everything would be different

  • Cataractus

    It was a bargain only in comparison to John's other misfired deals, such as buying Clarify for $ 2.1 billion only to sell it for $200 million 18 months later in a desperate bid to raise cash. And let's not forget to mention his buying spree of absolute vaporware companies that never so much as churned out a dime of revenue.

  • netas

    this guy looks like a total rip off. look at his mimics and movements of his mouth and eyes. it tells everything.

  • felixmk

    I remember when they charged Dunn with criminal offences, Roth was quoted saying something like “I guess this clears me”. All Roth ever cared about was John Roth and money – he made out like a bandit and now lives like a hermit in his luxurious estate outside Toronto with his fancy cars.

  • exnt2

    he almost killed optical because he was a wireless guy. he was one of those sand bagging presidents.

  • Another_Nortel_Watcher

    The bubble was a crazy time. When Nortel stock was trading north of $800 (adjusted) and when he more than doubled annual revenues, Roth was a pretty popular guy. Roth and Chambers were high-stakes competitors in a league that made Microsoft look like a mid-size company. Both Nortel and Cisco made a *ton* of bad acquisitions, but in some sense it was the cost of staying in the game and being perceived as a leader in the big-spending customer base.

    The difference between Roth and Chambers was that Roth is an engineer and Chambers is a salesman. Roth's primary focus was the technology and Chambers was – and is – the numbers. Chambers knows where his numbers stand on a daily basis, whereas Roth's view of Nortel's true performance was probably 2-3 quarters behind actual performance. I think Roth made two fatal mistakes: 1) he picked a couple of wrong leaders (but he picked many of the right leaders too), and 2) he believed that winning the technology war would win the game and took his eye off of the market at the wrong minute. I think the reason Cisco survived and Nortel crumbled when the bubble burst is because Chambers had his finger on the pulse of the numbers and the customers while Roth had his finger on the pulse of the technology. If Roth had gutted and replaced Nortel's financial systems a few years earlier, many things might have played out differently.

    Returning to the present, in the context of Roth, Chambers, et al, – Mike Z is a bush-league joke. MZ has ALL the wrong leaders, he doesn't personally have a clue what bets to make, and as a result the company has been in accelerating decline ever since he took over. Mike Z has even managed to make Dr. Evil – Paul Stern – look good.

  • broadbandbill

    Netas,

    Good catch! Every time he tries to talk about the future with authority (fiber optics, internet, data traffic) his eyebrows lift up, which a dead sign of ‘I don’ have a clue’. Think about our expressions when we wander about anything. Shoulder and eyebrows go up…–bb

  • felixmk

    The wireless guys thought he was killing wireless in favor of optical. He used to come to wireless meetings and say “base stations are commodities” and “why would we finance a wireless deal when I can get better returns in optical”. Funny

  • felixmk

    Lets take a poll on the most ridiculous acquisition by John: Xyros, Bay, Shasta, Alteon, Cambrian, Clarify, Broadband Wireless, ..? I vote Xyros for its vapor and high price.

  • Another_Nortel_Watcher

    +1.

  • exnt2

    http://ca.youtube.com/watch?v=VZg7K6_Ss1E

    posted eons ago but picture the company and its business units in place of the mouse and its internal parts.

    This is the damage that Z and his cronies did to this company.

  • TongueInCheek

    I vote Clarify. Made no sense for an infrastructure company to acquire a CRM software company.

    At least with Bay, there are current products in the marketplace that have their heritage dating back to Bay.

  • exnt2

    http://ca.youtube.com/watch?v=q1T5EGGl8mo

    I believe this is the motherload of crap.

  • Troller

    I vote for whatever company that was that was peddling “micro-mirrors” for optical switching. Yeah, buddy. Was that Xyros?

  • http://nortelinsider.wordpress.com/ Desk Jockey

    Looking at the Nortel leadership of the past decade only reminds you of the Roman emperors during the crisis periods of the empire. Bumbling, delusional and above all, greedy.

    It was almost be funny if it weren't for the livelihoods of so many people that they've destroyed with their ineptitude and dare I say, criminal behavior.

  • less

    I can't help but think of Lee Harvey Oswald when I see Roth. They not only resemble each other physically, they share similar cat-ate-the-canary facial tics.

    Reporter: Were you in the building at the time?

    Lee Harvey Oswald: Naturally, if I work in that building, yes sir.

    Reporter: Did you shoot the president?

    Lee Harvey Oswald: No, they are taking me in because of the fact that I lived in the Soviet Union. I'm just a patsy!

    Lee Harvey Oswald: I positively know nothing about this situation here. I would like to have legal representation.

    Hugh Aynesworth: Four or five policemen and right in front of me, maybe 15 or 20 feet, they jumped on Oswald. He put up a big fight. All I heard him say is, “I protest this police brutality,” he said that twice.

    Lee Harvey Oswald: I positively know nothing about this situation here. I would like to have legal representation.

    Lee Harvey Oswald: Uh, I really don't know what this situation is about. Nobody has told me anything except that I am accused of ah … of murdering a policeman. I know nothing more than that and I do request uh someone to come forward to give me legal assistance.

    Reporter: How did you hurt your eye? Oswald, how did you hurt your eye?

    Lee Harvey Oswald: A policeman hit me.

    Lee Harvey Oswald: Ahhh!

  • TokyoBoyz

    The stupidist purchase was Bay Network all we managed to get out of it were the Ethernet switches. They were never able to deliver a router after the Bay BN. The Versalar 15K, I remember flying down to Boston and asking them about what performance metrics they were working towards and what the test plans they were going to execute. the answer was is that in the IP router world that wasn't the way it was done, Bell heads like me were idiots for asking such questions. They went to France Telecom and got their asses kicked by Juniper and cisco with BGP convergence times, they were like deer in the head lights. Man I knew they would happen because I have worked with all kinds of Telcos and they always test the shit out of any box. You need to have your act together before going to the lab. The 15K was canned because Billerica didn't the skill sets to fix the problems. To this day the shit shit heads in Boston still strive to not deliver. versalar 25K, MPE, etc.

    Just a bit of development on Passport would have made a better multiservice router than the bay BN ever was. Passport was the only router cisco was ever worried about because it had real routing and voice capability. The problem was that the PLMs were convinced that there was no market for multiprotocol routers and ISPs were a passing fad. There was no business case for Internet services.

    Nortel has never been able to follow up on a market we had an enormous x25 and FR installed base that we gave up to cisco for ISDN and ATM.

    Passport still brings in 250M a year, imagine if we had followed through and made it a real Router. You can do a lot of development for 9 Billion.

    Nortel will never be able to hit the inflection point because it takes management guts and skill to do that.

    My favorite why Nortel sucks story is when we were discussing VOIP with the CTO scum bags, they were adamant that it was impossible for IP to meet the qos requirements and I pointed out that I had a lot of customers doing voice voice orver frame relay and that are under lying infrastructure for FR was connectionless just like IP, blank stares….Group think is still big at Nortel. The answer to all your problems 40G. Sonet/SDH will live forever, Ethernet is apassing fad.

  • less

    I liked the Passports.

  • Many

    Don't forget Architel. I think to be fair you need categories of due diligence stupidity , most BS product, worst integration, most obnoxious corporate culture, buggiest product, bought for the most inflated stock price, largest number of people to jump ship immediately, , ……

  • less

    Theres 3 more Roth interviews available on youtube

  • less

    Theres 3 more Roth interviews available on youtube – and that Roth parody, of course.

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