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Posted by Henry Dewing on June 12, 2009
I have just returned from the Annual International Nortel Networks Users Association (INNUA) Meeting in Pittsburgh, PA. At the event, I was again struck by the loyalty of the Nortel customer base. There were 1,500 some in attendance. I saw Nortel customers and partners who hailed from Boston to San Francisco and as far away as Denmark, India, and Brazil. Nortel had a group of nearly 250 partners from the Carribean and Latin America in town for training as well. Attendance was down considerably (nearly cut in half) compared to last year, but those who were in attendance were serious – considering their options and Nortel’s future. While Nortel compared their history to Pittsburgh’s – a gritty town with staying power that has reinvented itself for the new economy – customers really wanted to know about the future. Nortel preferred to focus on comparisons to the six time World Champion Pittsburgh Steelers – customers wanted to compare then to the Pittsburgh Penguins wondering whether they could pull off one more win to take the Cup.
Through the time I spent at the event Nortel executives hammered on their message of continuing transformation for the company. CEO Mike Zafirovski focused on the commitment his executive team was making to Nortel employees, customers, products and technologies. His ultimate aim was to find a way for all of them where they could prosper – while Enterprise General Manger Joel Hackney focused on the continuing success of Enterprise initiatives and future plans for new products and services. Customers and partners were buying the vision, and wanted to know how it would be implemented. Mike and Joel announced that they expect answers would begin to be delivered within about month, and quickly departed for an unscheduled trip –presumably to pursue negotiations related to answering that question.
At this point, I believe that Nortel is committed to putting their products and employees into the market as part of a larger organization, capable of generating the scale of operations to succeed in a consolidating global market. That means a business combination with another entity with complimentary capabilities – and Nortel is not in a position to buy. So the question is “Who might buy Nortel assets and business operations?” Likely not a single entity, as few organizations other than Alcatel-Lucent, or perhaps Huawei, have the breadth of voice and data communications businesses across Enterprise and Service Provider to provide a home for Nortel’s varied product lines. Siemens and Avaya are the options Nortel enterprise customers ask about most frequently. European and Latin America customers seem to like the Siemens option as it provides them the potential for smother interactions and greater attention. A couple customers were curious if an Avaya acquisition would enable them to streamline their heterogeneous infrastructures, but partners worried about what the combined Avaya-Nortel channel model would look like. Delivery of services related to Unified Communications in particular has become an uneasy market with channel partners worried about Nortel’s ability to deliver services without competing directly – and no one at the INNUA conference was confident that they could count on Avaya’s new focus on indirect sales and delivery for the longer term.
In short, Nortel’s customers demonstrated loyalty and commitment to Nortel – and Nortel returned the commitment at this user group meeting, but the details of how these intentions and commitments will be fulfilled are still in the wind.
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