The sad life of an old Nortel phone system

They are brought into our office and thrown onto the floor like garbage. Our technicians certainly don’t have the time to sort through, label, and re-package the old Nortel phones, so, they pile them up, stuff all of them into big boxes, and bring them back to the office. Many times they leave the common equipment (phone system cabinet, and voice mail system) at the customer’s office for them to dispose. Unfortunately, the old Nortel Meridian phone isn’t given the respect it deserves.

What respect is it due ?

20 years of solid, hard work, thousands of hours of phone calls, a slightly cracked display, a reliable voice mail light that still works, and – it now finds itself stacked like garbage waiting to find a new home (don’t worry, we don’t throw them in the garbage). More on that in a moment.

But, I am having fun reminiscing in the mean time.

I started in the Telecom business in 1990. 19 years ago. Way before I got married, and way way before I had my first kid (Jordan, who is now 11, Jessica who is now 9). At the time the Norstar was THE phone system in the market. Nortel had the number one market share in the phone system business with their Meridian Norstar and Option 11 (and previously SL-1) phone system. They maintained that number ONE market position for many years.

And quite the fall from glory.

One of the folks in my office pointed out the irony of the picture. The old garbage Nortel phone is sitting in an Avaya box (take a close look at the picture) – looks like the Nortel phone has been taken over by the box.

And where do we send those old Nortel phones ?

Avaya gives us some amazing credits for the old Nortel hardware. We pack it up, call Fedex, and say good-bye to our old faithful friend who finds it’s way to an e-waste processing plant.

Written by: Jeff Wiener. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Identi.ca, or Friendfeed

Avaya to Buy Nortel’s Enterprise Business: A Sad Day for Canada

It looks like Nortel’s fate is quickly coming to an end. The speculated rumour which has been going around for weeks is now confirmed with Avaya’s $475-million bid for Nortel’s enterprise business.

The $475-million offer is for Nortel’s European, Middle East, and African enterprise units. Nortel has also reached a “stalking horse” agreement with Avaya for the North American, Latin American, and Asian enterprise business units. With Nortel’s CDMA business going to Nokia Siemens, it looks like the end is coming near for Nortel.

As a Canadian, I am trying to view these announcements favorably but having a hard time with it. Nortel has been in Canada for decades, and been a pioneer in the telecom market since inception (or close to it anyway).

Nortel is telecom, and Nortel is Canada’s R&D leader. With assets now going to Nokia Siemens and Avaya, this will clearly diminish Canada’s dominance in the telecom and R&D space. Yes, there are other companies, and many small entrepreneurial shops that will get spun from the very talented engineers, but this certainly marks the end of a very long Canadian history.

As an Avaya reseller, I believe this ultimately will help Digitcom’s business.

First, one of our major competitors (we did at one time sell Nortel equipment, and still have many Nortel customers) will be gone from the market. There has been, and will continue to be, a large base of Nortel business that will over the next many years get transitioned to alternate products.

The challenge for Avaya at this point is to ensure the bulk of the current Nortel business transitions to Avaya equipment. As much as Avaya has been active over the past six months, their competitors will continue to prey on Nortel’s base.

The big difference is that Avaya is no longer the one preying, they are the bait. And when you are #1 in the market (which Avaya will be), there will be a lots of folks breathing down their backs.

While Avaya has given no guidance about its plans for Nortel’s enterprise business, Avaya is unlikely to continue with two competing products lines. I expect they will ultimately transition competing lines such as the Norstar, BCM and the CS1000 products to Avaya equipment with some large trade-in discounts.

Other then the Norstar and old Option 11 hardware (which are/were workhorses), the BCM and to a lesser extent, the CS1000, have been plagued with issues for many years. I’m sure the technology itself is worth much, although the product and dealer base certainly are.

Although the deal isn’t done yet – (Matlin Patterson is putting together a competing bid for the entire Nortel business unit), this is a sad day for telecom and a sad day for Canada.

What do you think about the deal? Do Nortel’s asset sales hurt the Canadian high-tech market?

More: Nortel has billions of dollars of tax-losses and R&D credits that a Canadian company could take advantage of. Any takers?

Nortel’s Mess – Why would anybody want this ?

Quite the legacy Mike Zafirovski has left behind. Granted, he arrived into an already disheveled mostly broken Nortel, but, he took the job on with some major promises.

“I’ll fix it – trust me.” Three years and a Six Sigma later, he’s made a mess. He leaves with a crappy legacy and many many many millions of dollars in his pocket. People make mistakes. Zafirovski made many. His first mistake was getting on the sinking ship thinking he could save it. The reality is, he tried to fix the business, but the culture still prevailed.

Nortel was destined for failure before Mike Zafirovski stepped in – he was too love struck to see it.

It’s a culture of arrogance. The “we’re the best” culture of arrogance was so pervasive it actually continues even until today. The fact is – and I’m speaking from an enterprise perspective – Nortel’s products are poor. Granted, they did at one time build an amazing product. The Norstar and Option 11 were the best pieces of telecom equipment during their time. That changed, at least from my perspective, with their BCM, Succession, and Passport products.

I know many people will disagree with what I’m saying, but, most of those people have never seen the other side. For those who have, they’ll probably agree.

When Mike Zafirovski arrived, he believed the arrogance. I’m sure he didn’t arrive with the attitude – it probably took some time for him to start believing what he was told. The fact is just because Nortel made it doesn’t mean it worked well. In fact, it didn’t. BCM, Succession, Passport. Those are the products I’ve seen. They don’t work very well. Overpromise and under deliver.

I could go on and on about system trays, bad MSC cards, hardware and software issues, and a PATCH PATCH PATCH “there’s a patch for that” – patched attitude that prevails. Customers bought into the mess, and Nortel continued selling it.

The culture of arrogance was so pervasive that the people that worked there didn’t see it – at least not until they left. And then, and only then, did they see the other side. The WE ARE NORTEL and WE CAN”T DO WRONG because we’re Nortel attitude – that’s hard to fix.

Now, I’m trying to figure out why anybody would want to buy the enterprise business. What on earth do they think they’re going to get ? It will be MANY millions to buy. That’s a lot of money. How will somebody make that back?

Maybe somebody will buy Nortel and keep the products intact – and try and fix it. The BCM, Succession – it doesn’t need fixing, it needs gutting. The name “NORTEL” is damaged from the last six months of their public relations nightmare. But there are existing customers who would be looking for upgrades, software support, maintenance … maybe there’s some value in that.

Avaya has been rumored to be interested in purchasing Nortel’s enterprise business. What could they possibly see in it? It’s certainly not for the engineering – that they’ll gut. Rip and replace. While there are many issues Avaya would need to consider when looking at Nortel’s enterprise business, it should be noted that Avaya had
been doing well in the enterprise market, and been successful in convincing a growing number of Nortel customers to switch suppliers.

Is there enough maintenance and upgrade dollars available to make back heavy price tag ? Most good dealers have taken on a secondary, and now alternate primary product line. Does it mean that much to keep this out of Cisco’s hands? Can they make their money back? Are there that many customers left?

It’s possible, with the right attitude!

Discounts better then ever to upgrade your old Nortel system

There’s never been a better time to upgrade your old Nortel Norstar or Nortel BCM phone system to a new Avaya IP Office or Cisco UC500, or Cisco Unified Communication Manager Express system. Both manufacturers have promos extending until September which will provide for some significant credits toward trading in your old product.

Avaya’s promo – called “Beat Nortel” provides for a 35% discount on hardware if you are trading in an older Nortel Norstar, Nortel Option 11C or Nortel BCM phone system. This promo extends to the end of September 2009.

Cisco’s promo – called “TDM Escape” provides for a 30% discount on hardware if you are trading in an older Nortel Norstar, Option 11C, BCM, or Mitel phone system. This promo extends to September 2009.

These discounts started in January and Digitcom has sold more phone systems in the last 6 months then we have ever sold in our 19 year history. Customers are concerned about Nortel’s future, now more then ever, especially with Nortel’s latest divestiture announcements last Friday.

Give us a call – 416-783-7890

Jeff Wiener
(416) 783-7890
250 Rimrock Rd., Toronto, Canada
jw@digitcom.ca