posted by: Mark Cortner
The high wire balancing act required by Nortel following its bankruptcy filing will crucial to the viability of its enterprise voice business. In a post earlier this month, I predicted that Nortel would not shed these assets while in bankruptcy and would retain these assets unless business conditions significantly deteriorate.
The next several months will be critical as Nortel reaches out to its customer base and attempts to reassure nervous customers of the company’s ability and intention to continue its investments in the enterprise telephony offerings; that channel partners will continue to support customers and maintain expertise in Nortel products; and that its partnership with Microsoft (the Innovative Communications Alliance or ICA) remains fully intact and healthy.
The message that Nortel shares with its customers surrounding the bankruptcy will be the first step to reestablishing credibility. I don’t believe many businesses will accept that the bankruptcy does not affect Nortel’s ability to execute and that why many may want to believe that past product commitments will continue to be met. The pragmatic view may be that even with the best intentions, Nortel may be forced to extend delivery dates and shrink legacy product lifecycle timelines.
In addition to its own product commitments, Nortel must protect its channel partner relationships as the channel partners themselves frequently represent the customer’s indirect relationship with Nortel. The channel partners are undoubtedly also nervous about Nortel’s future, as many may rely disproportionally on product/service revenues dependent upon Nortel products and may therefore be at a business risk as well. I noticed this week that one of Nortel’s largest non-carrier and highest certified channel partners, Shared Technologies, signed on to Avaya’s business partner program.
The establishment of a unique relationship between Nortel and Microsoft, within the ICA, was positioned as an important strategic milestone for both companies as well as for the UC market. The reality is that, over the past several years, I suspect neither party has experienced the windfall of joint business opportunities related to UC that they may have anticipated when the ICA was formed in 2006. I expect the ICA to quietly dissolve in the next year and that while Nortel will continue to “partner” with Microsoft; it will work even closer with IBM and its less predatory platform, Lotus Sametime.
The approach that Nortel takes to each of these key areas of concern over the next few months will be pivotal to the future of their enterprise voice business as they navigate the bankruptcy process. I anticipate Nortel’s execution will determine the direction and pace at which the dominos fall …
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