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Thursday, January 15, 2009

Nortel files for Bankruptcy

Nortel files for backruptcy yesterday. This was long over due. The way the company was struggling with serious lack of focus and trying to a little of everything and gained leadership and expertise in nothing did harm them in a big way. They were trying to the Jack of all trades. In the networking world it was a giant with a lot of products under its umbrella and frankly speaking it has a decent customer base. The important thing that indicated its decline was th alack of any type of growth in any segment or vertical whatsoever. They could not capitalize on their legacy customer base. Most of these customers who upgraded went Cisco route and then the ones that did not went Alcatel-Lucent, Juniper, Extreme, Foundry, etc.
Nortel was becoming a services company more than ever over the last five to seven years. They are trying to cling on to Microsoft (With a lot of their Unified Communication division being "ex-Norteliets", atleast on the operations, infrastructure and services side). They presented to the world that they could be a serious software only players in the telecomm (soft-telecomm) world.
Come on people, this is Nortel we are talking about. Everything needs to huge, monolithic and legacy oriented from them. Anybody who has worked close to them would know that.
They need a financial architect to come out of this pickle. The current guys are not going to cut it. This company will need to divest its business units intelligently as in this case the sum of parts is definitely greater than the whole.
Time will tell, but do mark my words. If I had the opportunity I could create several small but successful businesses out of Nortel, which would grow well on its own. They also need to lose these executive team and the mid-management (the barrage of VP's and SVPs) as they have not done much over the last five years or so.

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