Global telecommunications company Nortel believes the demand for multiple connections - anywhere, anytime and from any device - is exploding.
Nortel calls it Hyperconnectivity with cameras, MP3 players, security systems and appliances need to be connected and be inter-usable.
This demands a huge increase in bandwidth and complex applications sitting on the network, which is at the heart of Nortel's business. Nortel President and CEO Mike Zafirovsky is scheduled to visit India shortly, his first since taking over in November 2005. In an email interview with Leslie D'Monte, he explained his company's strategy for India and more. Excerpts:
Since you've taken charge, you have spent quite some time dealing with an accounting scandal and restructuring operations to reduce expenses. Observers say you have done a good job of it. What strategies helped you tide over these challenges?
Indeed we've achieved a lot over the 20 months or so that I have been here. My determination from the word go was to rebuild and restructure the organisation, to return it to being the great company it has been for over 100 years.
We began with the management team, and over the course of my first 90 days here executed a rapid change of many of the leadership roles, with a mixture of internal and external appointments of people who really shared in my belief that we could turn this great company around. And we were able to attract some of the best - leaders like our CTO John Roese from Broadcom, CMO Lauren Flaherty from IBM, Dennis Carey and Joel Hackney from GE who have systematically set about our business transformation initiatives, and CSO George Riedel. Combined with some of our established internal leaders we very quickly built a best-in-class management team.
We were then able to move swiftly into the execution of our business transformation. The pace of change has been rapid. Our operating rhythm keeps us focused on short-term milestones and our long term vision. And we set out a six point plan to succeed and are performing well against those metrics. And a new Nortel can and has emerged. A Nortel that is focused on the customer. A Nortel that grows and creates value as we help our customers seize the opportunities that exist in the market. A Nortel that is on its strongest footing in years, with a clear direction and a plan that is starting to work.
And our customers are responding. We are earning important wins, many that represent long-term partnerships between us and our customers. It is from this base that I see a bright future for the company.
How do you plan to take this success story forward?
A new era in telecommunication is unfolding- an inflection point is being reached. The demand for multiple connections, anywhere, anytime and from any device is exploding.
The term for this is Hyperconnectivity. It is a phenomenon being driven by the proliferation of handheld devices and the convergence of wired, wireless and IP. Cameras, MP3 Players, security systems, appliances and much more are all demanding to be connected, to be linked, and to be "interusable." That, of course, gives way to huge increases in bandwidth demand and the need for more complex applications sitting on the network. That's the very heart of our business: providing that broadband, that network capability. And we have taken steps over the past year to grow our capabilities.
Our strategic direction, across all of our lines of business, is focused on making it easy for our customers to capitalize on this inflection point. Easy. And Simple. Consistent with our Business Made Simple mantra. This change is not down the road. It's already started, and will be accelerating.
How important is India to Nortel's success story? Are you planning to increase your investments here, make any acquisitions or have any significant tie-ups?
India has been, is and will remain a fundamental piece in supporting Nortel's global business, as well as representing a very important domestic market for Nortel.
India represents a great outsourcing story and companies across the globe are benefiting from that. Nortel has had a long-standing relationship with Indian companies like Wipro, TCS, Sasken and Infosys for outsourced R&D.
Indeed, Nortel was a pioneer in the outsourcing model in India, beginning over 15 years ago.
We have also established a Nortel Technology Excellence Centre in Bangalore focusing on new product design, development and testing to deliver greater cost benefits to our global customers. The centre represents an integral part of our global R&D capabilities, focused on advanced routers, Ethernet switching, security and Voice over Internet Protocol technologies.
We are actively pursuing a great number of growth opportunities in India, as the country obviously has much potential. The SMB business in India is blossoming, as more and more small companies are using technology to help them compete on a national or international stage. Technologies like WiMAX have enormous potential to bring broadband wireless access - and the whole hyperconnected world - to previously underserved places. This is a very exciting time to be doing business in India.
How's your deal with Bharti shaping up? Any more such deals in the offing?
It's going very well. Bharti Airtel selected Nortel in early 2006 to host a full range of contact centre services including remote management through the Network Operations Center, support from Nortel's Global Technical Support Team, and voice analytics and speech recognition. As part of the agreement, Nortel has created a Network Management Center in Delhi and provides network design, integration, support and maintenance services for Bharti's contact centre architecture.
Nortel and Bharti Airtel have recently won the Best First Steps award for our managed services agreement in the 2007 Outsourcing Excellence Awards, considered by many as the Oscars of Outsourcing. The agreement, signed in March 2006, featured the creation of a 24x7 'virtual storefront' voice portal based on Nortel's Interactive Voice Response solution as the cornerstone of Bharti's contact centre operation.
We continue to look at new and innovative ways in which the two companies can work together to simplify Bharti's business and delight their customers.
Your company is betting strong on WiMAX and IPTV both globally and in India. How do you see it paying off?
WiMAX - and other 4G technologies - are fundamental to delivering the hyperconnected world I talked about earlier. Users demand mobile access to the services and solutions they consume, and WiMAX will be the first technology to deliver a true broadband experience wirelessly.
Nortel delivers an end-to-end WiMAX solution including devices, infrastructure, applications and services. Our solution delivers an order of magnitude improvement in performance which gives our customers the ability to connect multiple devices for every subscriber while simultaneously reducing their operational costs.
Customers around the world are trialing and deploying our systems as momentum gathers in this space.
In parallel, convergence of voice, video and data is adding an additional demand on operator resources. Nortel's IMS, VoIP and IPTV solutions allows service providers to improve their users' experience through personalized mobile and secure multimedia communications for simpler, less complex and richer connectivity across devices and access.
You have been nominated to the National Security Telecommunications Advisory Committee. What do you plan to do in this role? How does it change things for your company?
In its advisory role to the president, the NSTAC provides industry-based analysis and recommendations on a wide range of policy and technical issues related to telecommunications, information systems, information assurance, infrastructure protection, and other national security and emergency preparedness concerns.
As a presidential appointee to NSTAC, I will serve as a resource for the president and his national security team, and participate in discussions on a broad range of policy and technical issues related to telecommunications, critical infrastructure protection, homeland security, and other security concerns.
I am honored by the nomination, and look forward to serving on the committee.
Cisco has made major acquisitions, and so has Alcatel. What about Nortel? There were also reports that you were interested in buying out Avaya. You haven't made any significant deal in the past few years? Anything on the anvil? Isn't inorganic growth a part of your strategy?
Our strategy is absolutely to look at organic and inorganic growth in parallel, and to make our decisions based on the best strategic opportunities for our company. There has been a lot of consolidation in our industry in recent times, and I am sure there will be more.
We have made some acquisitions where we have need to strengthen a part of our portfolio. We acquired Tasman Networks in 2005, an established networking company that enhances our ability to deliver end-to-end converged enterprise networks. Nortel has also acquired PEC Solutions, Inc. a leading government IT services firm.
We have also entered into some very high profile partnerships and Joint Ventures. Our JV with LG Electronics in Korea - LG-Nortel - has produced a whole range of products and solutions across the broadband wireless, enterprise and consumer market spaces - as well as giving us a very significant presence in Korea, one of the most innovative markets anywhere in the world.
Our Innovative Communications Alliance with Microsoft, and our recently announced alliance with IBM, is helping to change the face of the enterprise communications arena, combining the industry leading desktop solution suppliers with the industry-leading voice expert to define the Unified Communications arena.
What does the Microsoft-Nortel relationship mean for enterprise users? How much of a difference has it made in terms of revenue?
No other Nortel competitor has as deep an alliance with Microsoft. Our leadership is illustrated in Gartner's Framework for unified communications where together Nortel and Microsoft address all the key unified communications deployment and development areas.
The Alliance delivers innovative solutions and services to accelerate the transformation of voice, video and data communications into a single Unified Communications platform that has low total cost of ownership, and delivers immediate business value.
The Alliance is one year old now and over 100 businesses have already embraced the benefits of the alliance and have purchased and are deploying more than 430,000 licenses for joint solutions.
What are you doing to improve your market share in the 'Unified Communications' space?
We'll be a leader in Unified Communications through the depth of expertise and the strategic alignment with key partners like Microsoft and IBM.
Nortel is delivering unified communications to customers that meet their needs, in their environment without the expense of total replacement of current systems and processes.