Posted by: WPeterson
What would have been unthinkable only a few years ago was, when it came about yesterday, merely “not surprising.”
Nortel filed for bankruptcy protection.
The signs were everywhere, from its plummeting stock to its irate shareholders who hounded CTO John Roese from his first blog post until the day he resigned. But as Tom Nolle observed, the best indication might have been their steadfast strategy:
While the proximate cause was the deferral in spending by carriers worldwide, which Nortel’s reserves simply could not handle, the true cause was a persistent refusal to deal with market conditions as they were. Nortel stayed with its core competences despite the fact that those areas were becoming core irrelevancies.
There is a lesson here for every other player in the telecom space: If you cannot promote service features and monetization you must inevitably be a player in a commodity market. Nortel will likely try to sell off additional business elements, and may even refocus on the enterprise, but unless it can become more strategic, it is unlikely to regain stability, much less stature.
This morning, I got an e-mail from the International Nortel Networks Users Association (INNUA), explaining their loyalty and dedication to Nortel during this “transition.” I have to wonder if telecom customers will be so forgiving — particularly when it means gambling on the ability to properly service and equip their investments for years to come?
- Nortel comes crashing down: Analysis at sister blog The Network Hub
- Tom Nolle’s previous Nortel coverage on Uncommon Wisdom
- 40 Gigabit Ethernet market maturing fast, with prices set to fall: More positive Nortel news, just a month ago