Facing a difficult market for networking and telecommunications equipment, Nortel Networks Corp. created a new Enterprise Networks division in October. The purpose: to spearhead Nortels rebound in selling equipment to large corporations, taking advantage of new technologies, such as VOIP.
Malcolm Collins, an 11-year Nortel veteran, was named president of Enterprise Networks at Nortel in December. Collins met with eWeek Editor in Chief Eric Lundquist and Executive Editor Stan Gibson in eWeeks editorial offices in Woburn, Mass., where he outlined Nortels strategy to recover the initiative in the enterprise.
What is the importance of the Enterprise Networks group at Nortel?
Were responsible for $2.5 billion on sales, and weve got 7,000 out of 37,000 Nortel employees. Its very important to Nortel.
Going back over the last 12 to 18 months, the biggest question of large enterprises and channel partners was the survivability of Nortel. We spent the best part of 12 months addressing that in the marketplace.
The fact that we set up this division in October and that its profitable shows were focused on enterprise again. In Nortel Enterprise Networks, voice and data came together.
How do you assess your competitors?
The one player we see every day in every market is Cisco [Systems Inc.]. But we also see Ericsson [AB] and Siemens [AG] in Europe. Were one of the few companies that compete in all those markets. One of the things were finding out in the marketplace is that customers want a choice.
But do they exercise choice?
No. I think thats my greatest challenge. Theyre being convinced that if you buy a LAN from somebody, you have to buy a router from the same company. If you buy a router from somebody, you have to buy voice over IP and security from the same company.
CIOs and [chief financial officers] should be demanding open standards and making sure theyre getting the best value for their corporations, and that hasnt been the case. People are locked in, and thats not a healthy situation to be in.
Nortel is made up of many companies that were once competitors of Cisco. They did not succeed, and so they merged. What is your strategy for beating Cisco?
There is no silver bullet. Its about doing a lot of things and a lot of things well. It kicks off with having great products, filling the gaps in our portfolio, and getting the performance and price points right.
In voice over IP, there was a perception that Nortel was late to the marketplace. But the reality was that we hit the right point in the market. We now probably have the most complete voice-over-IP portfolio in the marketplace.