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Nortel Chief Technology Officer John Roese recently talked to Gord Pitts of the Globe & Mail about his role as CTO and the transformation of Nortel’s R&D. You can see part of that interview in the below video.
The interview was also turned into a written Q&A, which you can see here. There is very little overlap between the video and the article, so both are worth your time.
This morning Nortel issued this press release announcing the acquisition of Pingtel. This acquisition strengthens Nortel’s efforts in providing an open-source unified communications solution.
Back in April, I blogged about Nortel’s new open-source UC solution for SMBs, the SCS 500. The SCS 500 is based on sipXecs (not Asterisk), which is a SIP-based open-source IP-PBX platform for VoIP. To-date, Nortel has contributed more than 300 new applications and features to sipXecs, helping transform its use into a full-featured unified communications platform capable of integrating VoIP, instant messaging, presence, on-demand audio/video conferencing, and unified messaging.
So how does Pingtel relate to all this?
Well it turns out that …
If you saw this morning’s news that Russian service provider Comstar was deploying a Nortel WiMAX solution in Moscow, you might have asked yourself “I thought Nortel got out of WiMAX.” And I wouldn’t blame you — shortly after we announced a strategic relationship with Alvarion that would allow Nortel to focus our R&D resources on the rapidly emerging LTE market, a few articles started appearing that boiled the news down to a snappy one-liner.
“Nortel ditches WiMAX” was a popular one, with various equally cringe-worthy examples being “Nortel dumps WiMAX” and “Nortel Flunks WiMAX.”
Of course, Nortel has not “ditched WiMAX” at all — we are working with Alvarion for WiMAX access solutions. Nortel is still dedicating resources …
I listened in on Nortel’s 2Q08 earnings call this morning, led by Nortel CEO Mike Zafirovski and CIO CFO Pavi Binning. You can access their presentations slides and hear a replay of the call here if you are interested.
Below are a few interesting points that I took from the call (not necessarily in order of the conversation on the call).
Revenue for the quarter was at $2.6 billion, up 2% year-over-year. For 1H08, Nortel’s revenue is now up 7% YoY.
Mike Z and Pavi Binning highlighted several times the continued progress with gross margins and operating margins. In the press release, Mike Z highlights: “We delivered gross margin of 43.1%, the seventh consecutive quarter of year-over-year improvement, and management operating margin of 4.3%, the eighth consecutive quarter of year-over-year improvement.”
The presentation highlighted gross margin improvements in Carrier Networks, Enterprise Solutions, and Global Services.
The presentation highlighted “significant improvements in G&A,” driven by cost reductions in IT and finance.
Mike Z said that in the second half of 2008, Nortel would be increasing and refocusing sales resources to focus on the growth segments of 40gig and unified communications
Mike Z said that: We have invested heavily in Enterprise and MEN, and we are starting to see the trajectory to growth in those areas.
A quick mention of an org change was mentioned, as Samih Elhage was announced as the new leader of the Carrier VoIP and Applications business.
Carrier Networks: quarterly revenue was down 2% YoY. CDMA revenue down 10%, with GSM/UMTS revenue up 11% YoY. The decrease in CDMA revenues, along with comments during the presentation of a slowdown in U.S. carrier spending were discussed during the call. One analyst asked about Nortel’s CDMA market share, to which Mike Z responded: “…certainly over the last couple of years we have gained [CDMA] market share and we don’t expect to lose that going forward.”
Enterprise Solutions: revenues were up 3% YoY. Gross margins increased while management operating margins decreased, reflecting increased marketing and R&D spending in the area. An analyst point out that the enterprise businesses still didn’t have a positive margin, and asked Mike Z how confident he was in this changing in 2H08. Mike Z commented that gross margin in the enterprise business had improved nicely in the quarter, and that Nortel expects enterprise to have a positive OM in the 2nd half.
Metro Ethernet: Revenues were up 4% YoY, with gross margins flat and management operating margin up. Several times during the presentation, Mike Z highlighted the growing momentum for Nortel’s 40gig solution. Nortel now has twenty 40gig wins, plus five tier one trials. Mike highlighted that at the last update (the analyst day event) that number was at 14 wins.
Global Services: Revenues were up 9%, with higher gross margins and management operating margins. A quick calculation shows that Global Services accounted for just over 20% of Nortel’s total revenues in 2Q08.
Breaking news this morning that Nortel will supply the network infrastructure for the 2012 Olympic and Paralympic Games in London.
The London Organising Committee of the Olympic Games and Paralympic Games Limited (LOCOG) today announced that Nortel is the Official Network Infrastructure Partner and the latest London 2012 Tier One sponsor.
What that means is that Nortel will be responsible for delivering the entire communications infrastructure for the 2012 Olympic Games — from the 10G metro network to the IP phones and everything in between.
Nortel will work closely with BT (who is also a tier one sponsor) in their capacity as the official communications services partner for the London 2012 Games. BT will manage the voice and data …
This Friday Nortel will announce earnings for the second quarter of 2008. The press release is expected to go out at 6:00am ET. At 8:30am ET, Nortel CEO Mike Zafirovski and CFO Pavi Binning will host a conference call to go over the results.
The easiest way to listen in is to go to the related Investor Relations page right before the start of the call and listen in through the live webcast.
It was just over a year ago that Mike Z appointed Steve Bandrowczak the CIO of Nortel. Since he took over, Steve has been a very visible and vocal spokesperson on Nortel’s direction — which is not how many people think of a “typical” CIO role. It turns out, though, that there’s a reason why Steve Bandrowczak is more externally visible than your average CIO.
When Nortel CTO John Roese speaks, people listen. Not only is he a brilliant guy, but he also holds the reigns to Nortel’s approximately $1.7 billion in annual R&D spend.
This Spring, Roese has already been busy talking up the accomplishments Nortel’s R&D organization has made, and where we are going.
Yesterday on his blog, Roese provided some additional color and detail on his R&D focus going forward. The post is centered on a recent Nortel Technical Conference — an internal Nortel R&D event last month in Orlando that brought together 300 of Nortel’s brightest R&D minds. But since the purpose of the conference is to focus Nortel’s R&D experts on what Nortel can deliver for our …
The Nortel Asia Summit came to a close yesterday. For our final bit of coverage on the event, Rick Seeto, Nortel’s VP of marketing in Asia, has provided us with some parting thoughts on the Summit — why we hosted it and how we think it turned out. Here is his guest post:
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Rick Seeto, VP of Marketing, Asia As we come to the close of our very first all Asia Analyst and Media Summit many of the team are looking forward to the weekend, and deservedly so.
Our engagement opportunity with our top analysts across Asia has been exceptional …
Nortel today announced that Jackson Wu and François Lançon were taking over as the leaders of the Greater China and Asia Pacific regions respectively. They fill the need created in April 2008 when Michael Pangia - formerly President of a combined Asia region - was appointed to North America as Senior Vice-President, Global Sales Operations and Strategy.
Aside from the new leaders, the obvious change here is the move from having a single APAC (Asia Pacific) leader to having two leaders — one for Greater China and one across the rest of the APAC region.
In the press release, Bill Nelson, Nortel’s Executive Vice-President of Global Sales, talks about how the changing APAC market was key in the move …
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