Providing PBX, VOIP and Unified Communications solutions to businesses in California since 1979.
The Fall of Nortel - How It Affects Their Customers
April 23, 2009
As most of the world knows, Nortel filed by bankruptcy protection on January 13th. In the majority of corporate bankruptcies, the company files under chapter 11 which allows them to discharge most of their liabilities and emerge as an existing entity.
Nortel does not look to be going down this path but rather looks to be liquidating its assets, putting up different parts of the company for sale. They’ve already sold their layer 4-7 data business to Radware. Now up on the auction block is their Enterprise voice business consisting of the widely-deployed Norstar, BCM and Meridian One systems. It is understood that Avaya, Siemens, and Aspect are all interested in the business.
There is discussion that Nortel will emerge in some form or another, keeping a core technology such as metropolitan Ethernet. To this writer, it is just as likely that they disappear all together. And if they do emerge, they’ll be a small bit player, paling in comparison to their previous clout and position in the marketplace.
Regardless of what happens to the Enterprise business, in the short term the more things change the more they stay the same. Business goes on as usual from a day-to-day perspective. The sales and support group are still intact, and equipment and software readily available. Even after the sale it will be at least a couple of years before the dissolution of Nortel will substantially impact end user companies. The acquiring company will most likely provide transition paths to move off the Nortel systems to their platforms. In the cases where Nortel products are superior to their own, they’ll likely re-name them and continue to develop and market them.
Nortel was once a high and mighty flyer. They could do no wrong and were dominant in many of their product lines. However, a horribly overpriced acquisition of Bay Networks marked a turning point in the late 90’s. They couldn’t decide if they were a voice company or a data company. Whether they wanted to concentrate on what they did best or be all things to all people.
When the dotcom implosion occurred, Nortel never recovered. Executive management was shuffled, books were cooked and no meaningful corporate direction was pursued. As one ex-employee said about them, “Nortel – The NO in InNOvation. While their competitors trimmed unprofitable businesses and moved decisively into new technologies such as VOIP, Nortel lumbered along, a beast of a former time. Nobody ever said that capitalism is kind.
I’d like to know your opinion.
Randy Kremlacek
Randy is the President of Teledynamic Communications. The company specializes in premise-based and hosted SIP PBX’s, pbx monitoring and Unified Communications.
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