John Roese’s Blog CTO, Nortel

Location: Beijing Airport, China

I am just getting ready to head to London from China, after spending a few days here attending the Nortel Global Supplier Forum. This is an annual event that brings together our strategic and emerging suppliers so they can hear first-hand about our vision and strategy, interact with one another and develop relationships and strategies. Considering the scale of Nortel’s supplier base and the billions of dollars we spend with this community, alignment around our strategy and understanding of our views of the market are critical. Overall, a great event and very positive response all around.

Just as interesting to me was my experience at Tsinghua University in Beijing, where I had the opportunity to give a speech to a large group of students. Tshingua is sometimes called the MIT of China and is one of the most prestigious universities in the country. It has some 30,000 undergraduate students and over 17,000 graduate students. Nortel has a long relationship with Tsinghua in various academic engagements, including funding scholarships, so I was glad to stop by and share my views on the industry and its inflections.

The interesting part was that in the dialog with the students and the media that attended, it is clear that the mega-trends of hyper-connectivity, communications-enabled applications and true broadband that I’ve been talking about are both understandable and resonant on a global scale. China is experiencing fantastic growth and build-out of communications systems but, at the same time, has a young and technologically aware population that is using cellular and Internet technology aggressively. They have very high expectations of connectivity and of the applications experience, so when we hypostatize that the future will be even more connected and more communications centric, this is intuitive to them.

One particularly interesting question from the group was “How will we overcome the fact that the industry tends to fight new technologies or convergence to protect the status quo and fragment technology threats?”

I thought this question was insightful in that it is true this industry has a history of resisting change, failing to adapt, and ultimately moving slowly in order to protect legacy positions and technology. It took a decade, for example, for the industry to agree that Ethernet was a “good thing” (remember Token ring, FDDI, ARCNET…) or that IP was the right Layer 3 protocol (remember OSI, IPX, DECnet, APPN…). This debate and behavior are simply realities of human nature and the industry.

So now, as we look to the future, a new set of changes is coming. To make hyper-connectivity real, we need lower cost, higher capacity, open broadband wireless in the form of the various 4G technologies. We also need to simplify the wireline transport (via carrier ethernet). And, we absolutely need to improve the application experience with unified communications and web services that communications-enable the total application ecosystem. These outcomes are inevitable but it will take leaders to make this evolution happen. I am pretty sure that the path to this future is clear, but I also realize that we need to gracefully, yet aggressively, move to that state.

In the dialog in China, I was also amazed by how much interest there is in WiMAX. If you are not familiar, China has developed its own 3G technology called TD-SCDMA, which competes with UMTS and other 3G technologies. As such, there is some concern about embracing WiMAX or other 4G technologies until TD-SCDMA has proven out. However, when we discuss WiMAX we see that while 3G is good for classic cellular networks, those networks are not designed to “mobilize the Internet” and, as such, adjacent technologies such as WiMAX (802.16e) provide a complementary network to expand the hyper-connected world by providing the rest of the devices with a network optimized for their use.

In the long term, we will converge to one or a few standards for 4G but, in the meantime, if we look at past technology evolutions, having a few complementary technologies that, in concert, expand the total addressable market is a perfectly fine interim step to that end state.

It is quite exciting that the same vision we’re talking about in North America and Europe is valid in China and the rest of the world. It appears that the trends we see are in fact becoming universal and, as such, are a good foundation to build a strategy on.