Nortel is breaking apart.
The former crown jewel of Canada’s high-tech industry revealed today that it will sell off its CDMA and LTE wireless telecom infrastructure division to Nokia Siemens Networks (NSN) for $650 million. Nortel also revealed that it will sell of the rest of its assets. According to reports, the CDMA division generates $700 million in annual revenue, which means means that NSN will make back its money inside of a year. NSN has also established a low bar for the sale of all of Nortel’s other business units.
A sale of Nortel’s enterprise telephony and unified communications businesses is will probably follow soon. A couple months ago at VoiceCon Orlando, there was plenty of buzz circulating that Avaya and Siemens-Enterasys were both looking to acquire Nortel’s UC business. Neither of them, according to rumors, are interested in technology. Instead, they want the customer base.
A company that’s only looking for access to installed customers might not be willing to pay much for Nortel’s UC division. However, NSN’s $650 million deal with Nortel is so shockingly low that it has certainly driven down Nortel’s asking price for its UC business. The only question now is whether the price has been pushed low enough for Avaya or Siemens to pull the trigger. If that happens, Nortel customers will find themselves with two choices: They can accept whatever incentives the winning bidder offers Nortel customers to buy into their own products, or they can start looking elsewhere.
Since I wrote about Google Wave’s UC potential, I’ve been curious as to Cisco’s response. After all, as Frost & Sullivan analyst Vanessa Alvarez pointed out, Google and Cisco could be the best of frenemies.
After chatting with Cisco directly however, it looks like that friendship will have to wait at least a bit to blossom (they contacted me as a direct response to the article). Grace Kim, a senior manager of marketing for Cisco’s WebEx collaboration suite, told me first and foremost the announcement of Google Wave was a sign Cisco was leading the way.
“I think, number one, they’re validating the growth and potential of our SaaS-based applications,” she said. “We’ve been in this space and they’re coming aboard the web-based application model.”
Google’s “coming aboard” the SaaS model? Google IS the SaaS-based business model: Its strikes against Microsoft have come in search, sure, but it was only when the search giant unveiled Google Docs that it truly encroached on Redmond’s territory. Cisco acquired WebEx in 2007, while GMail was launched (in Beta, naturally!) in 2004, with more and more UC features added regularly since then, including chat, video, text … Is conferencing that far behind?
Grace said the WebEx team hadn’t been paying particularly close attention to the Wave news, however, beyond reading some of the news as it came up, and re-iterated that Cisco was committed to interoperability (without signaling Wave or any other product in particular) as a cornerstone to success.
“We’re always looking at all the vendors and where the market’s going and to interoperate with what our customers want,” she said. “We’ll continue to evaluate it as opportunities arrive.”
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Sipera Systems, a unified communications security specialist, says it has seen a rise in toll fraud among enterprsies and service providers that it uncovers during the security architecture reviews and product deployments it has done in recent months.
Sipera said these cases of toll fraud of cost organization losses ranging from a few thousand dollars to hundreds of thousands of dollars.
The company identified the three most common vulnerabilities that lead to VoIP toll fraud.
- Telecom Connectivity Vulnerabilities: Enterprises that use Session Border Controllers (SBC) to secure VoIP and unified communications traffic risk a breach caused by configuration errors, SBC vulnerabilities or functional limitations.
- Application-level vulnerabilities: Many communications systems are vulnerable to fraud because they have weak passwords and authentication systems.
- End-point vulnerabilites: Enterprises haven’t instituted much security on users’ devices, especially as unified communications applications are extended to mobile devices, which are much easier to lose than a laptop.
Social networking has come a long way from the days of Friendster and Ok! Cupid. I am no social networking expert — I barely use Twitter, I rarely check MySpace. But I have had the pleasure (and dismay) of watching Facebook grow from the very first days, when I joined as a college freshman, and I’ve learned a few things along the way.
In March of 2004, I was finishing up my freshman year at Boston University (yes, this will help you figure out how old — or not old — I am). Around this time, I began to hear buzz in my dorm about this new fun way to socialize, “The Facebook” (it went from thefacebook.com to facebook.com in 2005). At this time, if I recall correctly, Facebook was only available to Harvard, Yale, Stanford, Columbia, BU, NYU and BC. And it was a completely different monster back then. There was a field along the top of your profile so you knew when you joined, which is how I still remember that I joined on March 30, 2004.
Just got off the phone with Vanessa Alvarez, an analyst with Frost & Sullivan, who suggested that rather than Google Wave threatening Cisco WebEx and other collaboration vendors, this could be a perfect opportunity for unlikely partnerships.
“The Ciscos and Siemens and other UC vendors should be looking at this concept to see what they can do to [learn from] or even to interoperate with this platform,” she said. “There’s been talk about Cisco WebEx, and it’s really prime to interconnect with Google Wave.”
But wait, isn’t Google Wave infringing on Cisco and Siemens hard fought turf?
Alvarez said it can be a win-win, because Google’s had trouble penetrating the enterprise market while the UC traditional vendors have stumbled drumming up developer support.
“We’ve told the UC community to start nurturing their own developers, and Avaya has DevConnect, but Cisco has had trouble with that,” she said.
Whatever partnerships follow from the Wave announcement, Alvarez said she’s excited about its potential.
“It’s definitely ground breaking in the sense of what it does, it definitely revolutionizes the current state of the market today,” she said. “But it has a long way to go. It still is in a very infant state.”
There’s even Google Wave discussion on Cisco‘s own forums, where Dan Miller, founder and analyst with Opus Research, writes in a posting:
In the near term a feature called “playback” is destined to be the difference maker. It is a feature that enables Wave users to tap into conversations at any point in time – past or present. While it is tempting to think of such a conversation as a “thread” in a email trail or discussion group, tapping into (and reviewing the entries to) a Wave is tangibly different. Most dramatically, entries are displayed on the screens of all participants in real time (or close to it). So there are times when participants, literally, work on the same documents at the same time. To paraphrase Gene Kelly: “That’s Collaboration.”
Playback is also the doctor’s prescription for social media-driven attention deficit disorder. It is the mechanism that enables people to search and tap into an ongoing “thread”, review it from the beginning and work up to real time. But, as the infomercial goes “that’s not all”. Wave enables picture sharing and the addition of any media feed for that matter.
Read more at SearchUnifiedCommunications about Google Wave’s UC potential.
Reports out of Canada say that a team of former Nortel executives hope to raise money in order to buy the company out of bankruptcy and keep it more or less intact and under Canadian ownership. Former Nortel president Robert Ferchat, 74, leads a group that also includes former chief marketing officer Ian Craig and retired Nortel vice-president David Mann. It might be more accurate to call Ferchat the former president of Northern Telephone, since that was what Nortel was called back in 1991 when Ferchat last worked there.
Ferchat told the Ottawa Citizen that his group hopes to raise at least $1 billion US from investment banks in order to buy Nortel through the bankruptcy courts.
Meanwhile, Nortel’s current executives are still trying to sell off the company’s top business units. But Nortel CEO Mike Zafirovski’s efforts have been undermined because no one is willing to pay very much for them. For instance, Nortel sold its application delivery buisness to Radware in February for just pennies on the dollar. Nortel originally acquired that business when it bought Alteon for about $6 billion in 2000. Radware paid just $17.5 million to take the Alteon business off Nortel’s hands.
I’ve heard rumors that Avaya and especially Enterasys-Siemens are interested in buying Nortel’s enterprise communications business, but they are more interested in gaining access to Nortel’s customers than actually owning Nortel’s technology. How much are they willing to pay when they can simply try poaching nervous customers (and partners)?
For seven seasons, Jack Bauer has rid the world of hundreds of terrorists, multiple nuclear bombs, and biological threats on Fox’s hit show 24. He didn’t do it alone — he had a trusty team of support, including Chloe on tech support, and Tony and Bill on tactical support. However, there was another key element to Jack’s success — Cisco WebEx, Cisco TelePresence and Cisco Unified Communications, as well as other Cisco products. Cisco sponsored this season and the past few seasons, and you could even get glimpses of the technology as they played integral parts of the plot lines.
For example, when President Allison Taylor (yet another reason I love this show — seasons ago, they debuted David Palmer as the first black president, and now Allison Taylor as the first woman president, who far out-acts Geena Davis from Commander in Chief) signs an executive pardon for a seemingly trustworthy source, she uses Cisco WebEx to electronically transfer her signature. An impending attack was taking place in DC, and he was the only person near the missiles who could help them, but he had a small window of opportunity. Time was of the essence, and the electronic signature was the best way to save time. Thanks to the product placement from Cisco, and a ringing endorsement from the head FBI agent (“We’ve already…set it up via WebEx, it’ll be able to give us a secure digital signature,” Agent Moss says), she was able to get her signature on the pardon to the source immediately and allow for the mission to take place.
When the acting heads of the group responsible for the day’s terrorist attacks decide to “meet” and discuss the next course of action after their plans had been foiled, they use a fancy UC product to do so, which allowed for roundtable discussion with private messaging and a button that allowed them “raise their hands,” but it also allowed for their anonymity with voice disguisers and a blank avatar per user (A driving part of the plot was that the group responsible for the attacks was unaware of each others’ identities, knowing only that they had the same vested interest in attacking American targets.). The UC product also allowed for document transfer among the members of the call. While Cisco was heavily shown in other scenes, I could not find any trace of a Cisco trademark in this scene — perhaps they don’t want to be associated with terrorists.
Then, in the season finale, a three-screen Cisco TelePresence setup allowed the Attorney General to question the President’s daughter and acting chief-of-staff, Olivia Taylor, about her role in the death of Jonas Hodges, who was suspected of treason and killed while in FBI custody. TelePresence allowed the AG, along with two other Justice Department agents, to interview Olivia with each person on a separate screen, and a safe network to make sure no hackers would get any of Olivia’s testimony. With clear detail in each person’s face, it would be more difficult to lie about a question, as she had three people watching her body language. It also allowed the AG to upload phone records and documents to Olivia, who was stowed away at the White House after the day’s events (including a siege at the White House and a DC biological weapon bomb scare), so she could verify them remotely and securely during the call without leaving the White House or setting up a separate secure line. Of course, it was all for naught, as Olivia later crumbled and fessed up to hiring someone to kill Hodges.
You can see all of these clips and more from past seasons on the Cisco website. Who knows how Cisco TelePresence or Cisco WebEx will aid Jack Bauer during season eight of 24, as he takes on a whole new set of technologically savvy terrorists?
At Interop this morning, HP and Microsoft announced a $180 million expansion of their partnership to jointly develop services and products as well as sell and market those products.
“Together, we are offering the extensive breadth of capabilities of our respective technologies to deliver a truly unified communications and collaboration solution to help our customers improve business productivity,” stated Stephen Elop, president, Microsoft Business Division, Microsoft, in a release on the HP-Microsoft partnership. “This means one click to communicate, one click to conference, one click to collaborate.”
The announcement highlights steps towards closer integration of the two companies’ product lines, such Microsoft Unified Communications qualification for the HP dx9000 TouchSmart Business PC, select smartphones, and new IP deskphones. Possibly more exciting is the integration of HP Halo Telepresence Solutions with OCS, enabling any OCS-compatible PC to join in on a HP teleconference call.
More details on the partnership, from the official release, after the jump.
The executives of Nortel have been walkin’ the streets at night
Just trying to get this bankruptcy right.
It’s hard to see the future with Cisco and Avaya around
You know they don’t like being stuck in that crowd
Customers think this waiting is lame.
They just don’t have time for this game.
But Nortel needs another month or two
Just a little more tiiiiime. Yeah.
Indeed, Nortel is asking the courts – and its wary customers – for just a little more patience.
Last month at VoiceCon, dozens of Nortel customers gathered at a special session entitled “I’m a Nortel customers. What do I do now?” At the session, customers peppered Nortel Enterprise president Joel Hackney with pointed questions about the future of the company. Hackney was candid in many of his responses, but quite often he deferred his answers. He assured customers that in May customers would get more answers, for May was the month that Nortel would file its restructuring plans in Canadian and U.S. courts.
Now we learn that Nortel and its court-appointed bankruptcy monitor, Ernst & Young, are asking the courts for an extension to July 30. Nortel customers will just have to find a little more patience for the ailing vendor, or they may want to do what many Nortel customers did at VoiceCon this year: Get to know the other players on the market.