Nortel Changes Line-up – Again

Does merging carrier and enterprise businesses make sense? Following on from business line restructurings in 2002 and 2005, Nortel Networks Corp. has merged its carrier data and enterprise data units to form a new division, titled Converged Data Networks, which will serve both sides of the networking divide. The move is necessary in a world where the barriers between traditional carrier and corporate products and services are rapidly breaking down, say officials at the Toronto company. According to Peter Cellarius, business leader of wireless, security and applications in Nortel’s enterprise wing, corporate networks are starting to grow in scope and sophistication, and are looking more and more like their carrier counterparts. " some enterprises, the IT department really evolving to basically serve a whole host of different constituents, and offering each of those constituencies their own ability to manage their services, network, traffic, and perhaps even implement different services from another division inside the same company," he says. "Those are what you would call traditional carrier requirements – it’s also sometimes called multi-domain management or virtualization." Carrier-grade equipment has long been thought of as more mission-critical than enterprise hardware: after all, a company’s network going down can be inconvenient, but losing 911 service can be tragic. But Cellarius says corporations are increasingly demanding the kind of reliability standards built into carrier equipment, such as five-nines uptime, formal quality of service (QoS) practices, and Six Sigma design. "Those are all initiatives that in the last while we’ve heard more enterprise customers asking for," he says. "Conversely, enterprise values – which I would characterize as reusability, speed to market, best-of-breed partnering, solutions tailored more specifically to an application – those are classic enterprise values that we hope to bring to the carrier side of the business." However, the concept is not totally new to Nortel. "It was actually one of the things that was spearheaded by Frank Plastina to try to leverage the know-how they had on the carrier side on the enterprise side," says Ronald Gruia, senior strategic analyst at Frost & Sullivan, pointing to the CSE 1000/2000-series of enterprise IP telephony servers and the MCS 5100/5200 multimedia communication servers as two business product lines that benefited from tighter integration with carrier technology. But while carrier advances might scale down well enough to work for larger and mid-sized corporations, they might prove too cumbersome and complex for smaller businesses. "You may still need to have a different class of products there," Gruia notes. Cellarius says Nortel equipment has a track record of being able to handle multimedia IP traffic, regardless of the type of network, and that competency gives the firm an advantage over competitors that might seek to unite their own enterprise and carrier data offerings. "If there’s one…touch point for us in carrier as well as enterprise it is converged communications," he says. "And we see that applying not just to voice, but to any latency-, jitter-sensitive traffic like multimedia as well." With more firms aiming to lower costs and improve reusability of resources through such initiatives as service-oriented architectures and loose-coupled services, the ability to handle multimedia or converged voice-data traffic will be of increasing importance, he adds. For his part, Gruia says business users will likely see more consistency and a common look and feel among Nortel’s products as a result of the reorganization. "Not that there was too much discrepancy before," he adds, "but in the office of the future, I don’t think you’ll be picking any one solution. I think you’re going to have a blend, you’re going to have maybe some CPE stuff, maybe some hosted IP telephony or IP-Centrex….I think this will enable Nortel…to create a more seamless look and feel for their whole product line." Business customers should also know that this latest reorganization has been planned. "I would certainly say that the moves that Nortel is making are deliberate moves, and thought-out moves," Gruia says. "They’re not tinkering or knee-jerk moves." He also admits that those looking in at Nortel from the outside may not immediately see the sense of purpose behind the tighter integration of the enterprise and carrier data divisions, and might view the reorganization with some skepticism. "Change is easy, improvement is hard, seeing the amount of effort underway right now, I can certainly tell you there is a deep digging to make sure this strategy is very robust," he says.

Nortel Changes Line-up – Again

News | 05/01/2006 4:00 am EDT

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