-
Website
http://www.allaboutnortel.com -
Original page
http://www.allaboutnortel.com/2008/03/24/umiastowski-encouraged-about-nortels-enterprise-prospects/ -
Subscribe
All Comments -
Community
-
-
Top Commenters
-
Popular Threads
http://www.unstrung.com/document.asp?doc_id=148242
I am still in shock!
Can anyone try to tell me how it could happen?
How was it possible that $1.3 bill deal was signed just for $0.5 bill?
Why I would see that_ 4 years ago _and Nortel would not?
I wrote a hundred or so posts calculating the deal and the loss in 2004-2005.
I’ve said it before that deal should be $1.3 bill to have any sense including only 30% profit.
Why the deal around $1.3 bill was signed at $500 mill?
Why?
$800 mill below market and with $500 mill loss!
Are those responsible for preparation_ calculation_ estimation of the deal_ business Plan still working for Nortel?
Will they do it again?
Are those questions important for NT investors?
Look
$1.3 bill vs $500 mill!
CSCO would require at least 60% margin or $1.6 bill!!
Other vendors still suffer the NT_BSNL deal in India!
—————
for new readers on that board
do you need links to see numbers which I presented above?
$1.3 bill contract signed for $0.5 bill ?
How Nortel could do that?
It’s not history! It’s part of Nortel’s future as Nortel will build the last 2.5 mill lines in 2008 with the tag $40 per line when ERIC gets $100/ line deals from the same BSNL!
March 12 2008
http://www.unstrung.com/document.asp?doc…
and 2004
http://www.nortel.com/corporate/news/new…
Can anyone try to tell me how it could happen?
What I am wrong about that?
Prove me wrong here on BSNL deal, all the Nortel’s employees posting here and all the ex-Nortel’s employees!
Mark poll showed you are 75% majority here!
http://www.allaboutnortel.com/?s=bsnl
From : http://www.unstrung.com/document.asp?doc_id=148242 - Nortel / MOT split deal
"Still short on network capacity following the messy demise of its 45.5 million line GSM tender, Indian state-run operator Bharat Sanchar Nigam Ltd. (BSNL) has placed follow-on orders with previous suppliers Nortel Networks Ltd. (NYSE/Toronto: NT - message board) and Motorola Inc. (NYSE: MOT - message board) for 5 million lines.
BSNL has ordered 8 billion Indian Rupees (US$197.67 million) worth of GSM equipment, divided equally between the two vendors, for the Southern region of India -- covering the Tamil Nadu, Andhra Pradesh, Karnataka, and Kerala circles. "
In English: 2.5mil lines for $98.835 million = 98835000/2500000=$39.534/line
From: http://www.lightreading.com/document.asp?doc_id... (ERIC deal)
The $1.3 billion deal is half the size of the $2.7 billion contract BSNL had been preparing to award the Swedish vendor in May when India's new IT and Communications minister, Andimuthu Raja, stepped in to question the cost of the expansion project. (See BSNL Expansion Delayed Yet Again and BSNL to Award $4.5B Mobile Contracts.)
<snip>
According to the Press Trust of India news agency, Ericsson will supply 13 million GSM lines, while Nokia Siemens Networks , which was to receive a smaller deal under the original 45.5 million line tender, will be given an order for more than 9 million GSM lines.
In English: 13mil lines for $1.3 billion = 98835000/2500000=$100/line
If this is true, this is really, really, really bad considering all the solutions do the same thing.
:(
I see you have just confirmed my numbers.
Let's ask the questions once again
Why NT will install 2.5 mill lines at $40/line when Erics gets $100 and NOK did not sign $170/line deal?
second question
How much NT will lose on the 2.5 mill lines?
I suspect that bsnl facked NT once again
I suspect that bsnl showed NT the carrot which is another 25 mill lines at $100/line available in next bidding.
I don't know why someone can be so stupid to wait for carrot and lose another $100 mill on that deal?
It's like a Poker game; bsnl is bluffing, idiots! /just my opinion/
In English: 13mil lines for $1.3 billion = 13000000000/13000000=$100/line
If anyone thinks that Microsoft will leverage sales for Nortel in large accounts, they are sadly mistaken. The Cisco sales machine has far better account control in large accounts than Microsoft. In many instances, large accounts simply look at Microsoft as selling 'paper products' (licenses) thru a reseller. Cisco is selling hardware and software and makes sure that all parties understand that salient fact. Microsoft never wants to get on the wrong side of Cisco in a major account selling scenario - especially since major accounts don't use NT on their core business servers. Microsoft will never challenge Cisco in any account that operates a large scale Cisco network. The reality is that Microsoft is discovering that it is tied to a dead man in a 3 legged race. In the latest Enterprise VoIp numbers, Cisco is now number one and Nortel has fallen to number three. Oops.
Above all, YOU CAN NOT HAVE OUTAGES!! If large enterprise customers deploy these unified converged solutions in the Financial or Hospital environments the ability to maintain a 5 9's reliability factor is crucial. It's unfortunate that Nortel has gotten accustom to deploying mediocre software, but that's understandable, as the majority of their software is written outside of the US. Nortel is no longer a quality company, they lack the resources and expertise to project manage and engineer an end to end reliable converged solution.
However, your point that Cisco isn't winning voice deals solely on the strength of their solution is a fair point. In my view, Cisco is gaining ground for several reasons: 1) Cisco is good at nurturing and leveraging their data strength - better than Nortel is at using their voice strength; 2) Cisco has a much stronger terminals program ($1B business) run by ex-NT people; 3) Cisco moved to aggressively add video to their offer; and 4) Nortel Enterprise voice BU is a deep silo and failed to maximize leverage of the breadth of Nortel's portfolio in Enterprise value propositions - Belleville has been far too resistant and slow to change.
I don't see anything in place that will turn this trend around.
You wrote:
"So what you're basically saying is that Cisco voice will be purchased in an increasing share of deals. I agree."
Translation:
When it comes to winning deals solely on the name recognition alone yes, If Cisco CCIE's can weasel their way to a position of power they will rape and pileage until the day the CEO comes down the hall asking why they would have blown the budget on technology for technology sake. Then those same CCIE's will move to the next victim, sad really. Sounds more like the predatory sub prime Mortgage lenders to me.
You wrote:
"1) Cisco is good at nurturing and leveraging their data strength - better than Nortel is at using their voice strength"
Translation:
Cisco will give away a portion of their HUGE Data margin to keep their Voice platform in play. How long will the greedy Cisco money machine use this ploy? Fact: Cisco maintains 73% of the revenue for Data Switch ports while only maintaining 37% of the actual Data Ports shipped. You can translate that, right?
You wrote:
"2) Cisco has a much stronger terminals program ($1B business) run by ex-NT people"
Translation:
First a question, are you saying that Cisco ships more phones than Nortel? When you ship more than the 50 million plus phones that Nortel has we can talk. Hybrid, DIGITAL and IP...wait Cisco can't do Digital...sorry
You wrote:
"3) Cisco moved to aggressively add video to their offer"
Translation:
Ok, good one you got me on that.
Cisco telepresence = expensive. Nortel telepresence = a great value.
You wrote:
"4) Nortel Enterprise voice BU is a deep silo and failed to maximize leverage of the breadth of Nortel's portfolio in Enterprise value propositions - Belleville has been far too resistant and slow to change."
translation:
Nortel Voice technology is light years ahead of the Cisco Call Mangler. Cisco can't technically match what Nortel can do in the Enterprise voice space, plain and simple. Some people would say the same thing about Cisco IOS.
I like a challenge, I like being the underdog, I like not being the 800 pound gorilla. It keeps me sharp and keeps me hungry. I am Nortel Man....
Cisco's IP phone business is much bigger than Nortel's. I don't care about TDM sets shipped because that business is terminally ill (ha ha...pun intended). Cisco ships a lot more IP phones because a lot of non-Cisco companies use Cisco IP phones with their solutions. I only know of one non-Nortel solution that uses Nortel IP phones. I forgot to mention in my last post that Nortel has a reputation for being the most difficult company on the planet to partner with.
I think you totally missed my point on the Nortel Enterprise BU being a silo and resistant to change. It had nothing to do with how strong Nortel's enterprise voice solution is, it had to do with the Enterprise BU's failure to leverage the rest of Nortel. Nortel's enterprise voice solutions should have been integrated with wireless technology at least 6-8 years ago. Instead, Nortel waits for others to lead the way and gets dragged kicking and screaming into new initiatives like FMC.
For years the Enterprise Voice business, Meridian-1 and CS 1000, has been run as a cash cow. They compete with Cisco and Avaya with both hands tied behind their backs financially.
I'd like to believe it, but my contacts in Nortel wireless often point to imaginary flat spots on their foreheads and say that "these are from the Enterprise door slamming when we go calling."
And given that the Enterprise BU - still to this day - has no wide area wireless component to their published core business strategy, I'd say the evidence in support of the silo culture I refer to speaks for itself. BTW, I refer to the Enterprise voice business run by the Belleville mafia, not the larger Enterprise business.
To make things simple....
They do not have the money to come up with a "wide area wireless component to their published core business strategy".
Enterprise Voice has a tiny R&D spend. Considerably less than Wireless. Wireless probably has more people working on LTE investigatiion and prototyping than Enterprise Voice R&D has in total (certainly in Belleville).
If the geniuses in Wirelsee think it is vital to have a story for how wide area wirelss works with Enterprise Voice then they should give up some of their R&D funding and head count.
This comment illustrates *perfectly* the problem with nortel and it siloed management. In the real world, the enterprise and wireless buisnesses are *not* independant from each other. Why is the integration and synergy a question of headcount and budget? One reason: empire.
If you do not have resources allocated to solve a problem then it will remain unsolved.
Blaming the people in Belleville for the way that Nortel organizes its business is absurd.
I am not, and never have been, a manager.
I am not blaming Belleville. I think the blame lies with Nortel HQ in Toronto.
There are many ways to solve the resource problem creatively. I do not know the specifics, but it seems to me that a certain amount of wireless resources should be at least partially accountable to enterprise requirements. This amount should reflect not what the revenue ratios are not but where nortel projects (and wants) them to be. Cross pollination of the managers (an enterprise manager in wireless and a wireless manager in enterprise) would be another logical step.
IMO keeping the two entities separate and warring over headcount is a symptom of the problems nortel has.